In its second-largest acquisition, Amazon buys the company for $970 million.
(Page 3 of 4)
When Lillian Vernon came out with a new set of products early this year, it used the opportunity to launch a redesigned web site. Like many retailers who redo their sites, Lillian Vernon emphasized ease of use in its new offering. But it also pushed customization and testing.
“For example, we have a big banner ad promoting our e-mail program on the top of our home page. But we can tell by a shopper’s cookies if they are already on our e-mail list and we don’t want to waste space promoting that program to customers already on the list. Now when those customers come to our site, we pop up a different promotion in its place,” says Peter Shapiro, senior vice president of e-commerce for Direct Holding Worldwide, which owns Lillian Vernon.
The online and catalog gift company is also a big user of testing. “We have a very sophisticated testing engine that allows us to test different pages against each other and find out quickly which are working and which are not,” Shapiro says. “In October, for example, we tried out two pages for the same promotion. We found out within 18 hours that one was generating 15% more revenue than the other, so we switched out so everyone saw the more successful page.”
The testing and redesign seem to be working. “They’ve done a good job in streamlining their pages so they’re not overwhelming their customers. And testing is a smart move that many leading retailers are finding really increases their conversion rates,” says Patti Freeman Evans, JupiterResearch analyst.
Lillian Vernon’s numbers back that up. Three months after the redesign, LillianVernon.com experienced a substantial increase in conversion rates, Shapiro reports.
In addition, the company has been increasing its efforts in paid search. As part of its commitment to testing, Lillian Vernon tries out various language combinations on its landing pages to see which ones get picked up more by search engines. That effort has succeeded on two fronts: “Several months after the redesign debut, we saw a 40% increase in traffic to our landing pages,” Shapiro says. “Sales conversions on search traffic have also increased 40% since we got smarter about the language we use.”
Mountain Equipment Cooperative’s e-commerce site proves retailers don’t have to scale impossible heights to use the web as an effective multi-channel tool. To compete against bigger retailers, Mountain Equipment, a small Canadian multi-channel retailer of outdoor apparel and gear, has put together an effective e-commerce site with multiple tools that drive multi-channel sales.
When Mountain Equipment built its e-commerce site in 2001, the co-op did so with the goal of letting its more than 2 million members make a purchase, check the availability of merchandise and order a catalog, says chief information officer Georgette Parsons. Over time, the retailer has added enhancements to encourage multi-channel sales.
For instance, Mountain Equipment offers an interactive wish list and gift certificates that can be used in various combinations. The wish list enables customers to create a list and it is tied to the inventory system so customers can check the availability of stock online and in stores. Co-op members can also purchase gift certificates online and redeem them in any of Mountain Equipment’s 10 stores or at MEC.ca. Customers can also use the web to track their remaining gift card balance.
Mountain Equipment rounds out its multi-channel program with other Internet-based elements such as buy-online, pick-up-in-store and web-enabled kiosks. But what makes the co-op’s integrated strategy work is the extent to which Mountain Equipment goes to learn what drives shopping behavior and how customers can be motivated to increase their spending across multiple channels. “We know who our members and customers are and give them ways to shop how they want and when,” Parsons says. “We also know members who shop across multiple channels are likely to spend twice as much as a member who shops one channel.”
Other retailers are doing an effective job with the web to achieve multi-channel integration, but what makes Mountain Equipment unique is its small size and ability to embrace e-commerce changes quickly, says Manivone Phommahaxay, consultant, user experience, Molecular Inc. “MEC.ca has a community-like feel that gives it credibility,” she says. “This trait increases a visitor’s trust and sense of belonging.”
Aproprietary technology that lets site visitors sample music and see the actual notes being played and take an interactive guitar lesson is helping Musicnotes.com gain market share in the fragmented sheet music business.
But it’s not the available inventory that’s helping Musicnotes, a web retailer with annual sales of about $4 million and more than 200,000 sheets of music and other merchandise in its online library, make a bigger name for itself in sheet music. Instead the company is using an innovative mix of digital technology and merchandising to stand out in the crowded online music space. Since introducing an internally developed digital music service about five years ago, Musicnotes has sold more than 1 million sheet music downloads.
Sheet music sales are up because Musicnotes is building and enhancing interactive applications that enable site visitors to download music samples and see how the notes are played as they hear the music. Another interactive application, Guitar Guru, lets visitors play a snippet of music, see how the notes are played on a guitar and then purchase the full song along with an extended lesson. “Compared to a conventional lesson which goes for $20 or $25, we are offering interactive lessons and a download for $5 to $10,” says chairman and chief financial officer Tim Reiland. “By enhancing the shopping trip with a unique digital experience, we can sell a customer a sheet music print out, a download and a music lesson all in one simple purchase.”