September 28, 2006, 12:00 AM

Big Deal

(Page 2 of 3)

In one case, Blinds.com shared data with suppliers that showed a 20% spike in sales when displays of its own Blinds.com brand custom-made, two-inch faux wood blinds clearly listed that it would take 5 days to produce instead of 7. “We showed them the conversion rates measured by the number of purchases divided by the number of product views for that particular item,” Cotlar says. In turn, suppliers modified their production time to the shorter period and realized stronger sales as a result.

In other cases, Blinds.com has used analytics data to show the impact of best practices deployed by its suppliers. When manufacturer Bali introduced images that displayed its blinds in furnished room settings, Blinds.com’s analytics showed a noticeable increase in sales of Bali products, Cotlar says. “That gave us the ability to go to other manufacturers and convince them of the impact of displaying room scenes,” he says. And the data helped Blinds.com convince Bali to increase its number of room scene displays, he adds.

The retailer also used analytics data to win over Levolor, a major supplier of window treatments. “In the past, Levolor had been reluctant to do promotions online, but when they saw our analytics that showed what could be done, they came to us with more innovative promotions,” Cotlar says.

Levolor agreed to begin testing new promotions by offering a free upgrade to its Lightmaster wood blinds, which are designed to more effectively block light and increase privacy. “They found out through our analytics that the offer made a big difference in making them stand out among the 19 other wood blinds products,” Cotlar says.

The experience led Levolor to come back with more innovative promotions. For example, Levolor decided to offer $20 cash back on each set of blinds, causing its sales volume to more than triple during the promotion. “And then there was the halo effect,” Cotlar says, noting that orders continued to increase after the promotion. “If we hadn’t had the analytics, we would never have had that offer on our site.”

A major advantage of using analytics data to show suppliers the impact of effective promotions and merchandising displays, Cotlar adds, is that suppliers become more amenable to initiating deals. “The biggest difference that has stemmed from using analytics is that it has made our suppliers proactive and more innovative with marketing and merchandising,” he says. “We’re a lean staff and we can’t be hunting down suppliers all the time to get them to push promotions. Now we have a 6- to 12-month promotional calendar and know in advance what promotions are running. Before sharing analytics data with suppliers, we had a ‘What will we do next?’ calendar.”

What to do next? Sharing analytics data with suppliers goes beyond just getting more innovative promotions and merchandising, Cotlar says. For example, a supplier slowing down production can result in shipping delays. Blinds.com can present the supplier with analytics data that demonstrates how shipping delays can lead directly to abandoned shopping carts. “We show them they can make more money by providing us with their products more quickly,” Cotlar says.

The e-retailer also can show its suppliers data on which types of products get the most click activity during particular seasons, encouraging suppliers to run timely promotions for those products. And since Blinds.com emphasizes its shoppers’ ability to customize all products by size, color and material, it works with suppliers to run promotions on customization that help differentiate Blinds.com from its retail chain competitors. “They show how what Blinds.com offers is different from what shoppers can buy in Home Depot,” he says.

In the end, spending time with web analytics data is more productive than working with financial records like income statements and balance sheets, Steinfeld says. “While income statements tell us what we did financially, web analytics shows us how we can be more aggressive with supplier promotions. So now we spend more time on web analytics.”

And Blinds.com’s parent, Global Custom Commerce, is preparing to spend even more time on analytics. It is planning to expand into additional niche markets and expects to use the same analytics-sharing strategy in its new ventures. With ongoing and proactive cooperation from suppliers, the company expects to continue growing without overspending on products and promotions. “And we’re not growing at the expense of profit margins,” Steinfeld says.

paul@verticalwebmedia.com

 

How does Santa know how much to pack?

Funky and classic, European and domestic, Oliebollen LLC is an e-retailer of children’s apparel, toys and accessories-and, naturally, a merchant with its eye on the holiday shopping season. The pure-play, however, does not have Santa’s omniscience when it comes to knowing the precise number of toys it will need come the holidays. How many French-made Petit Bateau footie pajamas and hooded shirts? How many German-made Haba building blocks? How many U.S.-made Shylling toy tea sets? How many lumps of coal?!

Knowing ahead of time products that likely will be big sellers can mean significant differences in cost, selection and delivery time. A standard toy industry practice is for suppliers to grant better terms, including pricing and product mix, when a retailer commits several months ahead of time to a large amount of inventory, sometimes within a specific group of toys, says Oliebollen founder and president Margaret Schankler. “But how can you predict Christmas sales six months ahead?” she asks.

The trick is to figure out how to sell enough products early in the slow, pre-holiday season to meet suppliers’ goals and win discounts and favorable payment terms, she says. Working with web site designer Enlighten and web analytics vendor WebTrends, Oliebollen gets an early look at pre-purchase shopping behavior, including browsing, cart-adds and wish-list activity. “This gives us much better ability to predict trends and understand the customer mindset instead of just purchasing behavior, what we used to rely on,” she says.

Schankler has learned, for example, that shoppers show more interest in European brands than domestic ones earlier in the season, apparently because they believe the former will be more difficult to re-stock while the domestic products will be more available. So she has bumped up promotions of European brands, confident she can move her targeted amount of inventory and hence win better pricing terms from suppliers.

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