August 1, 2005, 12:00 AM

Internet Retailer 2005: Report from the Conference

(Page 5 of 10)

Now what?
How to Build an e-Mail List--and What to Do With It
Heather Blank, director, e-commerce marketing and business development, Petco Animal Supplies Inc.

What works for training dogs also works for building and using a customer e-mail list, said Heather Blank, director, e-commerce marketing and business development, Petco. "Reward them with treats and they`re yours forever," Blank told the conference. In other words, provide online shoppers with incentives to opt into e-mail marketing lists.

An effective program, however, doesn`t simply dangle goodies, Blank said; marketers need to explain the value and benefits of signing up for e-mail at registration. At Petco, they include receiving pet care tips by e-mail, advance looks at new merchandise, and advance notification of sales. Added incentives such as a discount off the first order after opting in sweeten the deal.

Another rule of building and using an e-mail list that parallels dog training is the need to keep dogs--and customers--interested so they don`t stray. What holds different types of customers varies by audience. Blank said online visitors who don`t already shop Petco stores, for example, require different incentives to sign up for e-mail than those already familiar with Petco.

Treat a dog right and he stays loyal; and it`s the same with customers, Blank added. "That means building trust. Link to your privacy policy, and don`t ever sell your e-mail lists to anyone," she said. The right combination of offers and communication leads to what Blank terms "the seducible moment." "At Petco that`s the emotional bond between you and your pet," she said. That`s why customers receive e-mail reminders of the pet`s upcoming birthday or adoption date, along with an offer.

Be seen
Media Advertising: Making the Big Splash
Stormy Simon, chief of staff, Overstock.com

They said it couldn`t be done: a national television ad campaign, with impact, for under $10 million. How Overstock.com accomplished that in a program that boosted its unaided name recognition to 47% from 12%, and at less cost, can be a lesson to other online marketers: Overstock wrote and produced the ads internally.

Stormy Simon, Overstock chief of staff, who created and cast Overstock`s TV ads, said the first hurdle was in understanding the value TV could potentially deliver. "We had convinced ourselves that the people who like to shop online already were online," she said. After deciding to proceed, Overstock ended up rejecting the efforts of three ad agencies as too slapstick, too full of what Simon termed "jiggle," and not sufficiently appealing to Overstock`s 67%-female audience.

Simon`s team then took on the task, but later nixed their own first efforts. Deciding to go in a different direction, Simon eventually came up with a campaign that wrung extra mileage out of what Overstock spent on air time with the consumer buzz that surrounded the ads.

Each online marketer must judge which media and which approach best support its own ad efforts, Simon concluded, but she offered tips on evaluating the television opportunity. "The power of TV advertising can only take you so far. If you don`t have a business that is desired by the public, it won`t work," she said.

Simon added that in developing a TV campaign, marketers should "find what catches consumers` attention and highlight what makes you different." And finally, she advised online marketers that since the TV medium is so expensive, "It should be a way to augment your advertising, not the main thrust."

What`s new
Way New Marketing: Harnessing Blogs and Social Networking
Dana VanDen Heuvel, president, BlogSavant

Originally and still primarily personal online diaries, blogs are attracting attention as a marketing tool, and Dana VanDen Heuvel, president of web log consultants BlogSavant, expects that trend to grow. "In the future, blogs will be a tool to be implemented like e-mail or any other tactic," he said, and they`ll employ similar success metrics.

One indicator of increasing interest in blogs is the rapid growth of the blog universe. VanDen Heuvel said the "blogosphere" is doubling every five months, and that 10 million Americans have blogs. An estimated 92% of blogs are created by individuals under 30, but they aren`t the only voice represented--Pew Internet Research estimates that corporate blogs now number 5,000.

Organizations use blogs for thought leadership, crisis management, establishing community around a brand and internal community relations.

Some online retailers have been using blogs to boost sales. Gourmet gift site GourmetStation.com had two goals in creating a blog: as another way to communicate with its narrow target audience and to add content to boost its search engine rankings. Since launching the food-focused blog, which is written by a fictitious character--a fact GourmetStation states upfront--GourmetStation has seen an uptick in sales, with about 10% of sales now coming off the blog, VanDen Heuvel said.

In blogs` short history of commercial application, best practices have already emerged. Among them, said VanDen Heuvel, are an authentic voice for the blog and full disclosure about the purpose of the blog. "Content is king and creative writing is key," he added.

Comparing comparison sites
Shopping Comparison Sites: What Every Retailer Needs to Know
Chuck Davis, CEO, Shopzilla
Iggy Fanlo, pres., worldwide field operations, Shopping.com

The day before Internet Retailer 2005 started, Shopzilla announced it had been acquired by media conglomerate The E.W. Scripps Co. for $525 million. The big announcement didn`t keep Shopzilla CEO Chuck Davis from attending the conference, where he was scheduled to speak on comparison-shopping sites with Iggy Fanlo, president, worldwide field operations for competitor Shopping.com, which had itself been acquired only a week earlier by eBay Inc. for $620 million.

While neither Davis nor Fanlo could discuss details of the acquisitions, they were quite willing to discuss the market and why there`s so much interest in comparison-shopping sites. Davis noted that the majority of consumers are online and have bought something, yet only 25% have ever used a comparison site. With new muscle behind such sites and the prospect of a higher profile, comparison-shopping sites promise to become major online destinations. "We are entering the vortex of growth," Davis said.

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