August 1, 2005, 12:00 AM

Internet Retailer 2005: Report from the Conference

(Page 2 of 10)

Flax, he said, has been working with design firm Groove Eleven to develop a rich media feature that will let children and their parents use a computer mouse to manipulate images of colored paper, scissors and other materials to create a virtual paper crown. Once they complete the crown, they`ll be able to order the materials online to replicate the project in real life--an activity not available in a catalog.

The Echo boom
The Long-Term Market: The Impact of the Echo Generation
Doug Akin, managing director, Mr. Youth Inc.
David Liu, CEO, The Knot Inc.

Online retailers will need new marketing strategies to appeal to Echo Boomers, the Baby Boomers` 60 million offspring born between 1982 and 2002, two youth marketers say.

Echo Boomers are "an extremely powerful" force, representing 35% of the U.S. population and $180 billion in annual spending, said Doug Akin, managing partner of Mr. Youth, a marketing company that specializes in youth marketing.

The typical Echo Boomer is 18 years old and spends 14.8 hours per week on the web, doing everything from downloading music to chatting with friends to looking for deals, he said. "Online is where this consumer grew up," Akin said. "While many of you may have grown up riding bikes in the suburbs, these consumers are surfing the web. They`re growing up quicker, they`re much more marketing savvy."

The Echo Boomers` exposure to various media has grown exponentially, said David Liu, CEO of The Knot. "This provides an information base that has never been seen before," he says. "They have access to research, to get data points on just about anything almost instantaneously."

That means that as Echo Boomers age, get married and have children, they will face the same tasks and purchase needs as older generations, but will approach them from a different perspective. "We all need to adjust our thinking in terms of how we market and what we do with our brands to remain relevant," Liu said.

Echo Boomers are important because they are "really the precursors of what the mass audience will be doing soon," Liu adds. "They`re being raised in an environment with expectations that are really unfamiliar, uncharted territories for all of us."

Merchandise and communicate
Web Site Designs that Sell
Ken Burke, president, MarketLive Inc.
David Fry, president, Fry Inc.

Paired together for the first time, web design experts Ken Burke, president of MarketLive, and David Fry, president of Fry, told attendees at the Internet Retailer Conference that e-merchants looking to spark sales need to fashion web sites that emphasize their brands in appealing displays and provide helpful information to make shopping easier.

"E-commerce is in a rut," Burke said, warning that many retail sites are too similar in appearance and function. "Merchants need to find ways to differentiate themselves."

Burke led off the dual-presenter session with a high-energy presentation that prompted Fry when he took the stage to comment, "I feel like Steven Wright following Robin Williams."

Burke noted that some retailers are overly relying on frequent e-mail to attract customers with irrelevant messages. Some are also pushing cross-selling displays without providing enough information to help customers decide what to buy, he and Fry added. "Conversion rates and average order values are going down with cross- selling," Burke said.

Fry added that retailers should provide product-comparison data and make it easy to find supplementary information like care and maintenance requirements. "More information builds confidence and helps complete the sale," he said.

Fry also warned that retailers miss critical techniques like emphasizing their brands, providing relevant site search results and offering store locators. "The store locator is the most likely feature that customers will use, but a lot of retailers overlook it," he said.

Burke added that many e-retailers also overlook the opportunity to sell merchandise through spreads, such as collections of home furnishings displayed in room settings and apparel displayed in complete outfits with alternate pieces.

Retailers should spend more time on A/B testing of merchandise displays to determine what`s most effective at building customer loyalty. "It`s all about relevance to shoppers," Burke said.

Auctions: All grown up
What Retailers Need to Know About Selling on eBay
Scot Wingo, president & CEO, Channel Advisor Corp.
David Southworth, direct marketing manager, hardlines, Sears Holding Corp.

Online auctions, which once focused on cost recovery for end-of-life products, still excel at that task. But they can do more, according to Scot Wingo and David Southworth, who spoke on how retailers are using eBay.

Wingo, CEO of Channel Advisor, noted, "Online auctions have grown up." Forrester Research estimates that online auctions will represent 26% of online sales by 2007, and eBay, with $40 billion in annual sales, is the largest player, he said. Sales are growing on eBay in part because retailers are using the channel in new ways.

While the bargain-hunting focus of the typical eBay shopper makes the venue well-suited to liquidation sales, marketers also are finding it a fit for activities such as introducing products, Wingo added, citing a recent charity auction on eBay in which the marketer of a cell phone used bidder response to gauge reaction to different product colors.

"Retailers have been adept at selling in-season merchandise," added Southworth, direct marketing manager for hardlines at Sears. "We see a huge opportunity to innovate on the back end, with products that are less appealing." Sears now has three stores on eBay, all accessible through an auction tab on Sears.com, representing three concepts, Southworth said. Sears Auctions features new overstock or in-box returned merchandise, Sears Wheels offers fixed-price deals on overstocked tires, and the Sears Liquidation Center has auctions on open-box, returned goods. The liquidation center runs 300 to 1,000 auctions a day.

Southworth said auctions are an effective alternative to liquidating merchandise by selling it to a salvager. "There`s a huge market for the value-oriented customers," he said. "Sears` multi-channel strategy and brand power bring credibility to the channel."

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