August 30, 2007, 12:00 AM

Shoebuy.com thinks inside the box to keep growing online

To cast a wider net across the web, e-retailers are looking more to traditional offline ad venues to pull in broader audiences. Shoebuy.com is running a multi-million-dollar TV ad campaign, the first national TV splash by the unit of IAC/InterActiveCorp. IAC sister unit HSN.com, meanwhile, is has relaunched its site with a new emphasis on HSN’s TV programming content.

Online advertising reaches only so many consumers-to cast the net wider, even web-only retailers are looking to traditional offline ad venues for the sake of the audiences they can pull in. That’s the kind of thinking that underlies Shoebuy.com’s decision to launch a multi-million-dollar TV ad campaign this summer, the first venture into national TV for the online shoe retailer, a unit of IAC/Interactive Corp. Featuring a parade of people stepping in a conga dance line through an office complex, the commercial pointed out that Shoebuy.com offers more than 500,000 products from 400 footwear brands and also provides free shipping and free returns.

The company doesn’t publish sales or conversion rates but the TV campaign, which ran in July, coincided with a continued high conversion rate along with a surge in traffic, says CEO Scott Savitz. The commercial started airing on national television Monday, July 23, and traffic to Shoebuy.com in the week that followed was up 80% over last year at that time, says Savitz.

Growing the infant Internet

With the Internet, in his opinion, still in its infancy as a consumer market, Savitz adds that Shoebuy.com is satisfied with the response it’s gotten by stepping onto national TV. “The response exceeded our expectations,” he says. “We are seeing healthy increases in traffic from our existing customer population and new customers.”

The campaign was created by Boston-based ad agency MMB with Mullen, another Boston firm, handing the media buy. Though the July commercial referred only to shoe products, Shoebuy.com also sells active wear and handbags, which are available on another site it operates, BagsBuy.com. Based on the response to its initial TV ad for shoes, Savitz isn’t ruling out future commercials for the extended product line, he says.

The success of Shoebuy’s foray into TV comes at an opportune time for IAC, which reported second-quarter operating income for its retail segment that dropped 37% to $38.4 million from $60.5 million a year ago. Overall, revenue for IAC, whose properties also include operations such as Ticketmaster, Lending Tree and search engine Ask.com in addition to a dozen retail brands, rose 5.6% to $1.43 billion for the year-ago quarter. Total operating income at $135.6 million was down 17.9% from $165.1 million a year earlier.

That slump made gains at Shoebuy.com and double-digit growth in sales across its e-commerce properties a bright spot for IAC, which attributed an otherwise less than stellar Q2 performance to lower overall gross margins and increased operating expenses, among other reasons.

“We are not satisfied with these results-whether driven by market conditions or our own hand-and are taking every appropriate action to have the back half of the year reflect a demarcation point to a 2008 more reflective of our ambition,” IAC chairman and CEO Barry Diller said in discussing second quarter results.

Chefs on HSN.com

On the retail side, one of the first initiatives in that direction is the recently unveiled redesign of HSN.com, the web site that supports IAC’s HSN television shopping network. IAC is hoping to boost results from the TV shopping network, which reported revenue growth of just 1% year over year, though that was 3% when results of the now-shuttered America’s Store unit were excluded. The relaunched e-commerce site leverages the popularity of the TV network’s on-air hosts by placing video front and center.

Debuting in August, the new site presents original video content as well as original and re-purposed TV programming. Each storefront on HSN.com is hosted by experts who guide site visitors to new products, features and tips. In the cooking area, for example, chefs Wolfgang Puck, Emeril Lagasse and Todd English appear on videos site visitors can choose to launch.

“This site leverages HSN’s wealth of video content and television production knowledge to create a more interactive, accessible and exciting shopping experience for current and future customers,” says William Lynch, executive vice president and general manager of HSN.com.

mary@verticalwebmedia.com

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