In its second-largest acquisition, Amazon buys the company for $970 million.
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To sign up merchants, Flooz employs a direct sales team of five. Waxman works on merchant strategy, making sure the merchant mix is in line with consumer demand and that merchants complement each other, rather than compete. Levitan says there are two goals in being strict about which brands Flooz associates with: one is that Flooz wants to work only with online merchants who provide a quality shopping experience; the other is that Flooz is scaling its merchant network as it scales its account base so it can make an impact for the retail partners it has now by not spreading the ranks too thin.
Flooz is geared toward online consumers too busy for gift shopping, typically 25- to 54-year-old professionals with high incomes. Levitan reports that, similar to his experience at iVillage, women are the best online customers. But they’re not the only ones. While Flooz is meant to meet the needs of time-strapped gift givers (as Levitan describes himself), it also has gained quite a following among corporate clients. Levitan says more than 50% of Flooz’s business comes from corporations who use Flooz to reward employees.
“We’re not really selling Flooz to the companies, we’re selling access to merchant partners and bringing the merchants into the corporate space,” Levitan says. Flooz has a direct sales team of 10 who sign up corporate clients. “Some companies buy $1 million in Flooz. And the beauty of that is that it not only provides a less expensive solution for businesses because there are no administration fees, the retailers really love the corporate clients for the sales and amount of customers,” he says.
The golden touch
While getting popular merchants on board is an important step to attracting consumers to a gift-giving service, getting the word out about the brand to consumers is just as crucial. In that regard, securing Whoopi Goldberg was a coup for the company. “We teach Whoopi about the Internet and she teaches us about how to build a brand,” Levitan says.
Goldberg’s efforts-as well Flooz’s other marketing activities such as dressing actors in superhero tights and capes and having them pass out Flooz on the streets of major cities-are working. More than 50% of Internet users are aware of Flooz, said a quarterly survey in July by research company Greenfield Online, while Media Metrix has ranked Flooz the number one gift site.
“Robert has a great sense of branding and marketing and that helped us get the word out very quickly,” Waxman says. He created goals and priorities, the first of which was to perfect the customer experience, Waxman says. “He has really been able to get that commitment to customers into every nook and cranny of the company. Listening to what the customers say and learning from them was very important in order to take this product a long way.”
She works hard for her Flooz
Even with such good luck and good numbers thus far, Flooz has more work to do to make its web site a place where consumers, corporations and merchants will go for online gift giving.
“We want to continue to improve on what we’re doing, which is making shopping with Flooz a great experience and solving people’s gift-giving problems,” Levitan says. Adds Waxman: “That means getting more merchants, more consumers and more corporations using Flooz. We’ll continue to enhance the product in different ways that make our relationship with our partners deeper.”
Jupiter’s Leathern says the challenge for Flooz is to continue to sell its product into companies as well as to take advantage of the viral nature of the Internet. “They should look for ways they can use existing customers as their sales force to spread the word,” he says.
He also says the web site’s features go beyond other online gift certificate options. The site features an occasion-reminder service and a Flooz address book that keeps track of all potential Flooz recipients so users can send Flooz without having to look up individual addresses.
“Flooz seems to have a better chance of staying with consumer appeal by integrating web content, providing additional services and by featuring premier merchants,” Leathern says.
Levitan also thinks Flooz has staying power. “In a network society where people are doing transactions online there’s a role for Flooz in making those transactions happen and providing value to online retailers by bringing them customers,” Levitan says. “We think our stored-value technology is relevant and that we can build a business that makes a difference by being profitable.”