A Forrester report points out challenges faced by some business-to-business firms working online.
Better data management helped FootSmart.com boost shopping engine sales by 80%.
A triple whammy of a sour economy, rising print costs and escalating postal rates thwarted e-commerce development for many Top 500 catalogers last year. As a group, the Top 500 catalogers saw their combined web sales drop 3.1% to $18.32 billion in 2009 from $18.91 billion in 2008.
But in a shaky economic environment, cataloger Benchmark Brands Inc., No. 183 in the Internet Retailer Top 500 Guide used more effective comparison shopping engine management to grow web sales by 11% to $66.8 million in 2009 from $60.2 million in 2008. “Like many other merchants, we cut costs and hunkered down in the fourth quarter of 2008 and the first quarter of 2009 to see what was going to happen with the economy,” says Alan Beychok, CEO of Benchmark, which owns and operates FootSmart.com. “We then figured out what we could do better to keep moving forward.”
Comparison shopping engines have unique data elements and specifications that require merchants to supply coded streams of information such as per-unit pricing, available number of SKUs, specific product styles and colors, and shipping and handling information. Because each shopping engine or marketplace has its own coding requirements for data feeds, maintaining multiple feeds can be labor-intensive and time-consuming.
But by working with two companies that specialize in managing feeds to comparison shopping sites, Channel Intelligence Inc. and Mercent Corp., Benchmark was able to provide more accurate information on inventory availability, and update data feeds more effectively to BizRate.com, Shopzilla.com and other shopping engines. By looking at conversion rates on a per-SKU basis, Benchmark also was able to update its data feeds faster with more popular and hot-selling products.
By doing a better job of supplying shopping sites with faster and more comprehensive data, the revenue from comparison engines improved by 80% in 2009, says Beychok. “Everything we did with better segmented marketing or improving the quality of our data feeds last year was focused on customer acquisition,” he says. “We were very granular at looking at what we could do to increase web sales and we weren’t afraid to get our hands dirty.”
Benchmark has its roots in cataloging, but the company is focused squarely today on online retailing. “These days we are an Internet retailing company with a catalog operation,” says Beychok. “The shift away from the other shopping channels to the Internet is permanent and accelerating and we are building up Benchmark to capitalize on that opportunity.”
In 2010, Benchmark is already seeing a return to more robust growth. Though Benchmark doesn’t break out quarterly revenue, e-commerce sales were up year over year in the first quarter by 30%, says Beychok. He also expects online sales for 2010 to increase 24% to around $82.0 million.
To reach more new and repeat shoppers in 2010, Benchmark recently added new site search technology from Endeca Technologies Inc. The new site search engine gives shoppers faster ways to shop for shoes and related merchandise by new arrival, brand, condition, best sellers, top-rated and smart buys. Benchmark in the second quarter also expected to roll out personalization technology from Certona Corp. that generates product recommendations based on a shopper’s past purchase history and behavioral patterns.
More personalization will be a big part of Benchmark’s approach to e-commerce going forward, says Beychok. The online shoppers that frequent FootSmart.com are older and more affluent. Just over one-half of all its shoppers—51%—are 45 and older, including 28% over 55, according to e-commerce demographics firm Compete Inc. About 58% have annual household income of more than $60,000 and 25% are over $100,000, says Compete.
With older and wealthier consumers as its core web shoppers, the new technology will help FootSmart.com deliver a more personalized and unique shopping experience, say Beychok. “We position ourselves as the online authority for foot health,” says Beychok. “Customers expect plenty of authoritative content and personalization tools when they visit FootSmart.com, and that’s what we’re working on to give them even more.”