In its second-largest acquisition, Amazon buys the company for $970 million.
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Customers may browse the images of the SKU selection kept on the site, but if they don’t see what they want, they can e-mail Bellacor for help and a product specialist will respond within 24 hours. After determining the customer’s needs, the product specialist will comb though the other products to which Bellacor has access, digitalize the product images and push them through to the customer with a detailed description. All of the manufacturers Bellacor deals with have supplied graphics of their product lines. In some cases, Bellacor pulls the images from CD-ROMs the manufacturer has provided; in other cases Bellacor scans images from manufacturers’ catalogs. “Content is expensive-once you choose to merchandise content on your home page, you’re committed to keeping it fresh,” Andersen says. “You’re anticipating what someone might want to buy, and you’ve created significant overhead structure that’s highly inefficient.” Other than for the ready-to-browse items, Bellacor doesn’t create digital images or content or send pricing information until a customer tells a product specialist what he or she is looking for.
The same product specialist stays with the customer throughout the search and shop process. The specialists’ knowledge is a critical link between the enormous selection of goods available in the highly fragmented home furnishings industry and the shopper’s need to connect with another person throughout the buying process. The home accent shopper, Andersen says, is an “overwhelmingly female demographic. The customer for these kinds of products very much prefers to have someone help her with the buying decision. The successful traditional bricks-and-mortar furniture stores do an extremely good job of this. We recognized that, and we wanted to carry it over into a more efficient environment.” Bellacor’s experience proves that there’s value to replicating the real world on the web: the average order doubles when shoppers work with a product specialist rather than make their selection unassisted.
Bellacor.com doesn’t sell bulky pieces such as sofas and dining room sets, instead sticking with items such as lamps, mirrors and smaller accent furniture. In addition to being costly to ship, bigger furniture doesn’t fit the business model because it’s expensive, infrequently purchased, and typically requires family buy-in at purchase time. Lamps, mirrors, and less costly accent pieces are usually individually selected impulse purchases which occur more frequently (read: repeat customers). In fact, 20% of Bellacor’s customers buy from the site again within 90 days.
Back to the ‘50s
The site offers three services. The price quote service, a side-by-side price comparison, permits a customer with specific product information to see a direct price comparison and possible alternative prices. The personal shopper feature enables shoppers to search with the product specialists. Project portfolio, the newest service, launched in March, lets customers doing projects, such as buying or remodeling a home, manage lighting and fixture buying with Bellacor. “They need the same products, but they need a lot of them and they have to arrive at a specified time because the builder has to install them,” say Andersen.
Bellacor’s largest sale so far is a $9,000 crystal chandelier. The average ticket is about $400. The conversion rate is about 4% - pretty good, by industry standards. But conversion rates aren’t so much the issue at Bellarcor as are traffic rates, say analysts familiar with the company. The site is getting about 20,000 to 40,000 visitors per month, and the company spends little to nothing on online or offline advertising. It’s exploring additional partnerships such as the one it has with Improvenet.com, but to date has depended largely on a revenue share affiliate program through Commission Junction’s network to build momentum.
To date, 1,100 of Commission Junction’s affiliates have applied to post Bellacor’s banner on their sites. Plain old word of mouth and very selective magazine advertising help spread the word too. But will it be enough? “The challenge Bellacor faces is scaling up its operations to the point where it’ll increase its number of customers without decreasing the level of customer service it’s been able to provide thus far,” says Paul Ritter, managing director, Strategic Research Advisors, Ashland, Mass. “They’ve been spending very small amounts of money so far on increasing visitor traffic and they’re doing a good job of converting-the tricky part in the future will be increasing traffic without overspending on customer acquisition.”
Andersen knows that, but for now, he’s focused firmly on profitability before growth. And if growth is slower as a result, that’s fine with him. He might even argue that it would give the retail home furnishings industry time to catch up with the new opportunities presented by the Internet. “We still deal with a number of manufacturers that are set up so that to place an order, we have to type it up, put it into a fax, and send it to a local rep, who has to stamp it, then put it on his fax machine to send to the vendor,” he says. “This is why the opportunity in this sector is so exciting-it still has a lot of business practices that haven’t changed since the 1950s.”
2000: President and CEO, Bellacor.com
1996: SVP Sales and Marketing, NetRadio.com
1992: Founder, International Resource Group Inc.
1989: VP Sales and Marketing, Numerex Corp.
1986: International Marketing Manager, The Toro Co.
1983: International Marketing Manager, FPI, division of Beatrice Corp.
1979: Regional manager, Plumrose Corp.
1987: MBA, University of Saint Thomas, St.Paul, Minn.
1976: Business degree from Niels Brocks College, Copenhagen, Denmark