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IRCE 2007: Report from the Conference
JUNE 5, 2007
Day 1 Keynote Address:
The Web: Powering the Reinvention of Retailing
Jim McCann, chairman and CEO, 1-800-Flowers.com Inc.
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1-800-Flowers, which started selling online through CompuServe in 1992 and became the first online merchant on AOL two years later, does about 80% of its business online, the rest through telephone sales and a few stores. Over the years, the retailer has absorbed additional product lines to go beyond flowers and its brands now include The Popcorn Factory, baked goods retailer Cheryl and Co., household goods merchant Plow & Hearth, Fannie May candies and the Winetasting Network. A new brand in the works is 1-800-Baskets.com to cover the gift baskets market separately.
As the company continues to grow, McCann said, it will continue to brainstorm how to take advantage of new technology to build stronger online relationships with customers. "We`re trying to embrace technology to create the same kind of relationships we had with the 25 customers who came into our flower shop in our first year in Manhattan," he told an audience of about 3,000. "Today we have the challenge to be more personal with 25 million people on the web."
The future web
How eBay Will Continue Re-Shaping
the E-Retailing Industry
Gary Briggs, chief marketing officer, eBay Inc.
Warning that annual growth in retail e-commerce sales could slow over the next several years, Gary Briggs, chief marketing officer at eBay Inc., told attendees at IRCE 2007 that online retailers need to take advantage of high-speed bandwidth to provide innovative shopping experiences. "We underestimate the impact that bandwidth has on the way customers shop," Briggs said. "I don`t think we`re innovating enough."
Briggs said too many online retailers try to copy one another`s best and most popular features such as free shipping. "But sameness doesn`t generate consumer demand," he said. "We`re at risk of letting sameness make our industry mature more quickly." EBay is trying to reverse this trend by engaging customers to get their direct input on how they like to shop, Briggs said. Under one program, 500 eBay employees regularly receive e-mail messages from customers about what they think is working or not working on eBay.com.
To cater to a growing interest in mobile commerce, eBay customers can use mobile devices to visit a wireless-capable shopping site, select a product, then pay with a PayPal account. PayPal is an online payment services unit of eBay.
Innovation is the best way to keep growth strong in retail e-commerce, Briggs said. "We can change the growth rates in this industry, and see the industry grow faster than we`re estimating it to grow today."
What E-Retailers Must Know
About How Shoppers Use Their Sites
Ken Burke, founder, MarketLive Inc.
Venky Shankar, professor of marketing, Texas A&M; University
Visitor-to-sales conversion rates, though a common measurement of web site performance, overlook more useful data that can show e-retailers how to increase sales, according to a report based on a new e-retailer performance index from MarketLive Inc. released at IRCE 2007. The index is based on the web site activity of MarketLive`s customer base of nearly 200 client retailers, whose annual revenue ranges from $2 million to $200 million.
"Conversion rates are too ambiguous," Ken Burke, founder of MarketLive, said during his presentation. Rather than just looking at conversion rates, he added, retailers should look more closely at the clickstream data and web pages that lead to conversions and page abandonment.
Burke noted how some retailers have addressed such issues. Footwear brand Keds, for example, figured out that many customers like to shop by size. A new "shop by size" feature on Keds.com is the most-clicked feature on product pages, Burke said.
"The key is getting the consumer to trust the web site," said Venky Shankar, professor of marketing, Texas A&M; University, who preceded Burke.
Shankar advised retailers to look at their customers` shopping behavior outside of the retailers` own shopping environment--such as through surveys or consumer panels--to get a comprehensive look at customer interests." If you don`t do that, you may never learn what your customers are thinking," he said. "Look for metrics that capture a 360-degree view of your customers."
Tackling channel conflict
Consumer Goods Manufacturers:
How the Web Is Changing their Business Model
David Schofman, CEO, Callaway Golf Interactive
Manufacturers want a direct relationship with the buyers of their brand--but that customer relationship has been closely guarded by retailers. David Schofman shared Callaway`s approach to strengthening the direct ties between Callaway and its customers in a way that also benefits retailers.
Consumers who want to buy online at Shop.CallawayGolf.com, the flagship store for its core brand, buy on the site, but the order is actually fulfilled by the authorized retailer with the desired product in stock closest to the customer`s location, he said. Dealers log onto the system to see what`s been ordered, registering any matches they have in stock. The system then assigns the order to the nearest matching retailer for fulfillment.
Schofman said the model addresses channel conflict issues by awarding all orders that come in to the site to retailers. A second program to sell new clubs, called Trade In, Trade Up, allows consumers to purchase new Callaway clubs at Shop.CallawayGolf.com, send in clubs they already own for trade, and receive a credit for the old clubs against the price of the new clubs they have just purchased. The traded-in clubs also can be credited against the purchase of certified pre-owned clubs at CallawayGolfpreowned.com.