July 27, 2006, 12:00 AM

Internet Retailer 2006: Report from the conference

(Page 6 of 9)

The Many Ways the Internet Can Drive Brand Preference and Loyalty
Michael Tam, senior vice president, head of e-commerce, Borders Group Inc.
Kevin Ertell, director of interactive marketing, loyalty and CRM, Borders Group Inc.

To acquire repeat customers in a crowded market, a retailer should figure out how to earn their loyalty through valuable shopping experiences rather than by just buying their loyalty with discounts, Borders Group executives said at IR2006.

"Our mission is to be the preferred place forknowledge and entertainment," senior vice president, chiefmarketing officer and head of e-commerce Michael Tam said.

Early this year, Borders launched a rich media-enhanced online loyalty program that attracted 6 million members in its first two months. Borders attributes the quick growth in membership partly to its integration with an online gift finder that lets shoppers click through a playful tool that asks questions about the gift recipient`s interests beforerecommending several CDs and DVDs. "That really got our customers excited," Tam said.

In addition, Borders designed its e-mail marketing campaigns as tools that customers can use to explore the world of books and digital media. "We want our e-mails to be eagerly anticipated as a customer service," Kevin Ertell, director of interactive marketing, said.

Borders sends out a weekly e-mail that highlights its shortlist of recommended books and videos, with links to special features intended to engage customers in multiple ways. Customers are able to select e-mailcorrespondence segmented by 31 subject categories, includinghistory, business and food, presenting them with billions ofpossible e-mail messages when those categories are mixed with a customer`s specific interests, Tam said.

Brand revival

Designing for Sales: The Complete Re-Make of a Web Site
Tony Chivari, senior vice president, marketing, Spiegel Bands Inc.

There`s nothing like the web for getting a fresh start, and that`s exactly what the 140-year-old Spiegel brand has done over the last two years with a complete redesign of Spiegel.com. The new site has boosted average order values by 13% while decreasing home page departures by 19%, Tony Chivari, senior vice president ofmarketing, said at IR2006.

Spiegel`s previous web site design had made it difficult for shoppers to find products and resulted in low conversion rates and high abandonment rates, Chivari said. "We sell outfits, but each item under the old design was purchased separately; there was no cross-selling."

By comparison, the new site offers one-click selection of complete outfits. When a shopper adds an outfit to a shopping cart, she stays on the same product page with alternate views and sizing charts.

Among other improvements, Spiegel removed clutter from its home page, deleted redundant links and re-organized categories to let shoppers navigate further into separate product groups. It also set more product images against a white background to better highlight them, and it redesigned its "Idea Resource" shopping guide with moreuseful links to product pages.

Additions to shopping carts from product pages increased by 45%, even as the number of on-site search sessions decreased by 15%, Chivari said.

An overall goal, he added, was to make shopping easy. "We follow the KISS rule," Chivari said. "Keep it simple, stupid."

A Whirlpool shopping spree

The Web`s Key Role in Positioning a Manufacturer`s Brand
William Kurtz, national manager of business development, Whirlpool Corp.

Like a detective tailing his prey, employees at Whirlpool Corp. followed consumers as they shopped for appliances. The pursuers, though, were spotted because the shoppers were members of focus groups Whirlpool chose for a field trip experiment in brand positioning.

To uncover the rationale and intangible factors of how shoppers decide what to buy, the company decided to go to stores to deduce why consumers purchase certain products. The result helped Whirlpool in its effort to better position its brand across multiple saleschannels, said William Kurtz, national manager of businessdevelopment. He spoke June 7 in an address titled "The Web`s Key Role in Positioning a Manufacturer`s Brand" at the Internet Retailer 2006 Conference & Exhibition.

"Based on our findings we created seven shopperpersonas that helped us redesign our web site, an informational and marketing tool," Kurtz explains. "The redesign focused on the goals of these types of consumers and the tasks they perform to achieve them."

The personas include shoppers who already own an appliance from any company but want to learn more about appliances; are building a new home or want to upgrade an existing product; are distressed because they must immediately replace an old appliance; or are predisposed to buying Whirlpool but require more information.

"User-based site design and content can easilytranslate into loyalty," Kurtz says, "and that helps best position a brand."

Lessons from a pink daypack

Micro-Segmentation: The Internet Goes where Stores and Catalogs Can`t Go
Brett E. Lauter, director of emerging brands, Home Depot Direct
John Bresee, president, Backcountry.com

HomeDepot is just now beginning to experiment with microsegmentation with its recently-acquired Paces Trading Co. brand, but Brett Lauter, director of emerging brands at Home Depot Direct, has seen enough mistakes in the name of microsegmentation at companies with which he was associated previously to share with attendees at the session key insights on pitfalls to avoid.

Anyone pursuing a microsegmentation approach must focus on the basics first, he said. "Front end technology is just one piece," he added. Furthermore, more segmentation is not necessarily better. Use the 80/20 rule, he advised attendees: segment out the highest-value or most important customers.

For Backountry.com, microsegmentation started to crystallize around a pink daypack. Initially focused on hard-core outdoor gear fanatics, Backcountrygradually expanded its lines to grow revenues, until the pink daypack--which was "selling like crazy," president John Bresee told attendees--made Backcountry realize the broad focus could discourage its original core audience.

Instead, Backcountry decided to pursue growth with niched sites. That`s brought success and challenges, especially in operations and development. As in Backcountry`s case, execution is helped by a robust infrastructure that supports all niche sites in one database. "We can target smaller markets with relatively little pain," he said.

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