June 27, 2014, 2:57 PM

Niche military retailer uses verification to grow online sales

An online marketplace for active and retired military as well as law enforcement and government employees uses its own verification technology to offer discounts to its customers.

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GovX.com, an online marketplace, says it is growing rapidly by catering exclusively to active and retired members of the U.S. military, government agencies, law enforcement and emergency rescue personnel. The retailer, which has been selling online for three years would not disclose sales, but says it has booked 300%-500% growth in online sales each year. Unlike online marketplaces like those operated by Amazon.com Inc. and eBay Inc., which anyone can shop, GovX.com requires that a consumer verify her military, government agency or emergency rescue status via an online verification system in order to make a purchase. The verification system, called GovX Verify, verifies a customer’s status one of three ways, says executive chairman and co-founder, Tony Farwell. The simplest way is to sign up for an account on the marketplace using a .gov or .mil email address, which most active military and government employees would have. A consumer also can verify her status by phone or by uploading documents that proof her. GovX requires some sort of documentation that proves employment by a government or emergency responder agency, such as union credentials for government and law enforcement employees and military documents or service records for retired military personnel and dependents.

“This is a targeted and verified constituency that we reach and create a very privileged community,” Farwell says. Once accepted as members, consumers gain access to products on GovX.com, which are discounted 20%-70% off of regular retail prices, Farwell says.

GovX.com advertises on social networks and via TV and radio ads. But Farwell says the most effective promotion is by sponsoring articles on related web sites like Military.com and MilitaryTimes.com. He says such military-focused media sites are the biggest driver of traffic, which is approaching 15 million total visits from 11 million visitors. “We try to be less of an advertiser and focus more on content for media partners like Military.com and MilitaryTimes.com,” Farwell says. GovX.com sponsors content on those media sites in what is sometimes referred to as “advertorial” content.

This type of marketing has enabled the e-retailer to attract over 800,000 members in three years. But there is plenty of room for growth, Farwell says. More than 50 million adults, or 28% of the U.S. population, are eligible to gain membership to GovX.com due to their employment or dependent status.

The retailer, which sells everything from surfboards to jewelry, also partners with such retailers as ProFlowers.com, such services as Match.com and offers discounts on tickets to concerts via Ticketmaster and professional sporting events. GovX members can shop these retailers and services directly from the GovX.com site or through a dedicated GovX.com portal on the e-commerce site of an affiliated online retailer or service provider.

“Right now we have a widget that our partners can embed on their web site that allows them access to our technology,” Farwell says. “You can go to our shopping cart or you can shop through our partners, as long as you have the GovX credential.”

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