When the U.S. Congress recently was in a frenzy trying to pass the $700 billion bailout bill, a group of CEOs who founded successful Internet businesses, including many Internet retailer leaders, were meeting to discuss online business issues and trends. Talk naturally turned to the economy. And the mood was not cheery.
“We agreed that the worst is yet to come, and that 2009 is probably not going to be pleasant for business and as a result retailers need to prepare, especially for the next couple of months,” says Ryan DeLuca, founder and CEO of Bodybuilding.com LLC. DeLuca was among the attendees at the NetLeaders Forum, held Oct. 2 in Denver and hosted by Liberty Media Corp., a communications conglomerate that operates and has investments in many e-commerce companies.
Executives at the forum concluded that retailers and other companies may find it hard to get credit and financing in the days ahead; consequently, retailers should be very careful when it comes to cash flow.
“If you have huge capital expenditures coming up, you may not want to do as many, or do a smaller amount. If you run out of cash right now, you may not be getting more anytime soon from banks or venture capitalists,” DeLuca says. “The best thing to do is to keep focused on the customer—focus on adding features to the site, not business expansion with a ton of capital.”
There has never been a more urgent time to focus sharply on the consumer, adds Michael Zeisser, senior vice president at Liberty Media.
“Retailers should be making an extra effort to give a shopper better information to help her make sure an item really meets or doesn’t meet her specific needs,” Zeisser says. “Maybe in shoes it’s pictures of celebrities that wear the shoes. Maybe in winter gear it’s product recommendations. This is all part of the job and art of management.”
Bodybuilding.com, for example, includes a massive library of content on fitness and health, as well as online forums and a social network. The idea is to become a destination for shoppers, not just a place to pick up some supplements, DeLuca says.
“Someone is thinking in the back of their mind, ‘I want to get rid of these love handles,’ then they do a Google search on ‘abs,’” he says. “We have all this content on abs, and it comes up in natural search. These people are not yet ready to buy, but we’re giving them something, and we then already have them as a visitor who becomes familiar with our brand and thankful for what we provide.”
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