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The Sharper Image Corp. is expecting a big jump in its e-commerce revenues this year. In 1998, Internet sales accounted for about 4% to 5% of Sharper Image's total revenues of $243.1 million.
But Web sales could account for up to 15% of total revenues in 1999, says Sharper Image Chief Executive Officer Richard Thalheimer. That's because the retailer is making a big push to convert more of its paper cataloging customers to the Internet. "The Internet can reach millions of people at a fraction of the cost," Thalheimer says. "We want to shift customers away from shopping on paper and onto the Web."
To attract new Web shoppers, Sharper Image is planning a major online and offline advertising campaign, although specific details of the plan still aren't public. Sharper Image is also adding new technical features to its Web store such as an online auction and a program that enables shoppers to look at merchandise in three-dimensional images. "The Internet is going to buy cataloguers new cost efficiencies they don't have now," Thalheimer says. "To my thinking, if you are in the catalog business, you simply have to be selling on the Internet."
To pay for its e-commerce expansion, Sharper Image is among the first wave of direct marketers to reduce the size of its paper catalog. In March 1998, for instance, Sharper Image mailed out an 84-page catalog to its customers, the majority of which (55%) are male, average age 55, with annual incomes approaching $100,000. But today, with the exception of its June and December catalogs, the Sharper Image is about 52 pages. Sharper Image is expanding its e-commerce program because the Web store is attracting new and diverse customers. "Of the people who shopped our Web site over the holiday season, 70% were new customers to the Sharper Image," Thalheimer says. San Francisco-based Sharper Image sells gift and entertainment products through stores, catalogs and the Internet.