August 11, 2010, 3:07 PM

Tighter spam controls hurt sales at eCost.com

Sales for eCost.com declined in Q2 because of blocked e-mails.

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Sales at online retailer eCost.com Inc. slipped in the second quarter and parent company PFSweb Inc. says spam filters and blocked e-mails are to blame.

For the quarter ended June 30, eCost.com, No. 158 in the Internet Retailer Top 500 Guide, reported:

  • A decrease in web sales of 20.2% to $16.2 million from $20.3 million in the second quarter of 2009.
  • Total number of customers increased 9.2% to 2.14 million from 1.96 million.
  • The number of active customers decreased year over year 35.9% to 142,387 from 222,095.
  • The number of new customers decreased 38.6% to 30,192 from 49,192 in the second quarter of 2009.
  • The number of orders decreased year over year 30.6% to 66,778 from 96,186.
  • Average order was $216, compared with $203 in the prior year.

PFSweb, which also operates an e-commerce services business, says sales for eCost.com declined in large part because of blocked e-mails from various Internet service providers tightening their e-mail filtering algorithms.

“This action has resulted in limiting our ability to effectively advertise to a portion of our customers over the past quarter,” says PFSweb CEO Mark Layton. “Because we have relied primarily on e-mail marketing, and the resulting viral impact of our e-mails, to generate visitor traffic, the lack of its effectiveness resulted in a decline in revenue this quarter. We are working to adjust our marketing strategy to overcome this new challenge in the most efficient and cost-effective manner possible.”

For the first six months of the year, eCost.com recorded:

  • Sales decreased 11.9% to $36.3 million from $41.2 million in the period of January through July in 2009.
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