Specialty/Non apparel
Creating the special tie that binds

IRWD2010 Conference

Internet Retailer Best of the Web 2006

Backcountry.com
BassProShops.com
Biblio.com
eToys.com
LillianVernon.com
MEC.ca
Musicnotes.com
Powells.com

A key requirement for any online retailer is to understand customers’ needs and wants. But successful specialty retailers take that concept one step forward—they create a bond with their customers.

To achieve that bond, some specialty retailers drill their sites down to extremely narrow niches. Backcountry.com, the outdoor gear specialist, sets up mini sites that appeal to what John Bresee, president, calls “very passionate verticals.” It has separate sites for snowboarders, hard-core skiers, bargain-seekers, and middle market, price-sensitive outdoor athletes.

To keep those passionate shoppers coming back, Backcountry.com hires people who are deeply involved in such sports to select products, work in customer service and write content for the site. “These sites allow them to be very, very targeted,” says Patti Freeman Evans, retail analyst at Jupiter Research.

Other specialty retailers also load their sites with content designed to encourage return visits. Online bookseller Powells.com features author interviews, daily book reviews, original essays and 12-minute podcasts with news from the book world, short readings and musical performances. The goal is to make shoppers feel they are visiting a neighborhood bookstore staffed by people who share their passion for reading, says Michael Powell, president.

And BassProShops.com has information on everything from the basics of fly fishing, camping and hunting to what type of footwear is appropriate for each activity. “There are not a lot of retailers who demonstrate this kind of authority on the products they are selling,” says Jim Okamura, senior partner with J.C. Williams Group. “Bass Pro Shops has category expertise that is effectively delivered online—and that is a tough task to accomplish.”

Successful specialty retailers also are continually looking for ways to make it easier for customers to find just the right product for a child. With eToys.com’s gift finder, for example, shoppers begin by stating the child’s age and sex. Shoppers are then asked about the desired price range and the type of toys the child likes to play with, which further narrows down the search. “EToys has a great gift finder that really lets the customer drill down to the right item,” says Lauren Freedman, president of Chicago-based The E-tailing Group Inc.

Thriving online niche retailers also create a peerless shopping experience. That’s the case with Musicnotes.com, a sheet music retailer, which developed proprietary digital technology that lets visitors sample music and see the actual notes being played. It also lets shoppers take an interactive guitar lesson in which fingering is displayed on a virtual fret board.

“The digital technology does more than just let customers sample the merchandise,” says Shari Altman, president of direct marketing consultant firm Altman Dedicated Direct. “The download samples and interactive lessons create a very unique shopping experience.”

If you need proof that online retailers can find success with niche strategies, look no further than Backcountry.com. Since the outdoor gear specialist began setting up niche sites in July 2004, sales have soared. It posted annual sales of $27.5 million in 2004 and is on track to hit $50 million this year. “The open question through much of this year was will this multiple-catalog strategy work,” says John Bresee, president and cofounder. “At the end of October, when we had our biggest month ever, we just looked up and said, ‘boy, this is working.’”

Backcountry.com launched in 1997 with the mission of bringing high-end outdoor gear to the hard-core recreational athlete, Bresee says. But the site gradually drifted into other areas. “I was looking on the site one day and there was a bubble-gum pink daypack,” he says. “That was not hard core or high end.”

To get back to its roots, Backcountry set up sites that would appeal to narrower market segments that Bresee terms “very passionate verticals.” That led to sites for snowboarders (DogFunk.com) hard-core skiers (Tramdock.com), bargain-seekers (Backcountryoutlet.com and SteepandCheap.com) and middle-market, price-sensitive outdoor athletes (Explore64.com).

To make sure the sites carry products that appeal to the athletes in each segment, Backcountry hires employees deeply involved in the sports. For example, DogFunk.com is run by a competitive skateboarder who also coaches the local snowboarding team.

Customer service agents and the content writers for the sites also are hired for their expertise. “There are a lot of sites that sell snowboards but they also do skateboarding or surfing,” Bresee says. “A guy who’s a snowboarder isn’t necessarily a surfer or a skateboarder. We want to talk to the snowboarder.”

The niche sites allow Backcountry to get customers who might not have gone to the main site, says Patti Freeman Evans, retail analyst at Jupiter Research. “Somebody who is looking for downhill skis may not go to Backcountry.com,” she says. “These sites allow them to be very, very targeted.”

Backcountry will continue to spin off new sites, Bresee says. “Our mission is to be the best outdoor gear supplier on the web, and that’s not about being the biggest,” he says. “We want to be first place in the categories that we address.”

When it comes to selling the outdoor lifestyle, BassProShops.com is among the leaders. “Retailers selling outdoor products are selling a vision to the customer as much as they are products needed to be outdoors,” says Kent Allen, president of consultants The Research Trust.

Where BassProShops.com excels is in establishing itself as an authority on the outdoor lifestyle. Customers visiting the site can learn everything from the basics of fly fishing, camping and hunting, to what footwear is appropriate for each adventure. The detail in these tutorials makes it extremely easy for customers to choose the right equipment. “There are not a lot of retailers who demonstrate this kind of authority on the products they are selling,” says Jim Okamura, senior partner with J.C. Williams Group. “Bass Pro Shops has category expertise that is effectively delivered online—and that is a tough task to accomplish.”

The level of content provided not only makes it easier for online shoppers to reach purchasing decisions, but it also makes it easier for non-outdoorsmen to select gifts and it brings online shoppers to stores and vice versa. “They have created a strong multi-channel shopping experience,” adds Okamura.

To boost overall sales and recover lost sales opportunities, BassProShops.com recently launched a follow-up e-mail campaign aimed at those who abandon shopping carts and those who browsed but did not buy. Customers visiting the site who don’t purchase receive an e-mail three days later with pitches for items previously considered, as well as like products at the same price point. The idea is to create a customer service-oriented approach that wins business.

To prevent customers who have opted in to BassProShops.com’s mailing list from being overwhelmed with e-mail marketing, those contacted as part of the program are removed from the regular e-mail list the week they become part of the follow-up campaign. Even if a prospect does not buy online, there is a high probability he will visit a store to make the purchase.

“Bass Pro Shops understands how to cater to both the online shopper and the in-store shopper and get each to use the other channel,” says Okamura. “It’s why they are leaders in multi-channel shopping.”

Biblio.com may not have the name recognition of Amazon.com, but the online retailer of rare, used and out-of-print books has made its mark as an online marketplace for 3,500 independent booksellers worldwide.

But Biblio.com is more than a network of booksellers. It also is a treasure trove of information on more than 25 million titles, giving details on pricing, publishing dates, binding, condition and other information to help consumers in making purchases. “The majority of the data you see on a book title is provided by the bookseller,” says Kevin Donaldson, director of sales and marketing. “We want consumers to know what they’re getting.”

Biblio.com also provides general information, such as plot synopsis, author biographies, book reviews and book cover images, through third-party content provider Muze Inc.

Biblio.com recently added a feature that allows students to search for textbooks using ISBNs (International Standard Book Number), a unique identifier.

Biblio.com will only list items from professional booksellers with inventories of 200 or more titles, Donaldson says. The exceptions are rare book sellers, who may have smaller inventories.

But visitors to the site can do more than just buy books. Biblio.com hosts an online community forum on book collecting and buying where visitors can seek advice or post comments. Discussion topics include how to collect and identify first editions and signed books and how to repair and care for old books. It also is a forum for sellers to discuss trade topics and issues, get tips for selling books on Biblio.com and find information on software.

Biblio.com has focused on enriching the content of the site, leaving inventory and fulfillment in the hands of independent booksellers, Donaldson says. The company serves as the initial contact for customer service inquiries, forwarding them to the booksellers. However, he adds: “We deal immediately and directly ourselves with problems with the bookseller not fulfilling orders appropriately or fraud issues or any problems like that.”

Biblio.com also will provide payment processing to booksellers who don’t want to set up merchant accounts.

Top 500 Guide

If you’re selling toys online, one of the most critical tasks is to help shoppers find the perfect gift for a youngster. And while eToys has always excelled at this task through its “Find A Gift” feature, its ability to guide shoppers to just the right toy has been enhanced even more.

After months of focus group input, eToys made modifications to its navigation system in October and expanded its product categories. The result was a 20% increase in its conversion rate, according to Michael J. Wagner, eToys CEO.

Using the gift finder, shoppers begin by stating the child’s age and sex. That typically still gives them thousands of toy choices. By answering questions about the desired price range and the type of toys the child likes to play with, shoppers can narrow the selection down to a size they’re comfortable with.

“EToys has a great gift finder that really lets the customer drill down to the right item,” says Lauren Freedman, president of Chicago-based E-Tailing Group Inc. “Even the clearance item section is easy to navigate through.”

But it’s more than just advanced search and navigation features that help shoppers find the right gift. eToys also mails out 3.5 million catalogs so kids can mark what they like. Then the parents can go online later and buy. It also has begun gathering birthdates of all children for whom toys are being purchased. Then, three weeks before the birthday, eToys e-mails parents a reminder to come to its site. It also lets the parents know that it sells birthday party supplies.

To make sure its gifts fit what customers want, eToys tests products for age compatibility rather than just go by what is on the box. “The box might say 3 and up. But what a 3-year-old wants to play with is different from what a 6-year-old would want,” Wagner says. Additionally, eToys pays a lot of attention to the customers’ product ratings and has dropped more than a dozen toys because customers gave them poor ratings, Wagner says. To increase its battery of reviews, eToys sends e-mails to all customers a couple weeks after delivery asking for the buyer’s input into a toy review.

When Lillian Vernon came out with a new set of products early this year, it used the opportunity to launch a redesigned web site. Like many retailers who redo their sites, Lillian Vernon emphasized ease of use in its new offering. But it also pushed customization and testing.

“For example, we have a big banner ad promoting our e-mail program on the top of our home page. But we can tell by a shopper’s cookies if they are already on our e-mail list and we don’t want to waste space promoting that program to customers already on the list. Now when those customers come to our site, we pop up a different promotion in its place,” says Peter Shapiro, senior vice president of e-commerce for Direct Holding Worldwide, which owns Lillian Vernon.

The online and catalog gift company is also a big user of testing. “We have a very sophisticated testing engine that allows us to test different pages against each other and find out quickly which are working and which are not,” Shapiro says. “In October, for example, we tried out two pages for the same promotion. We found out within 18 hours that one was generating 15% more revenue than the other, so we switched out so everyone saw the more successful page.”

The testing and redesign seem to be working. “They’ve done a good job in streamlining their pages so they’re not overwhelming their customers. And testing is a smart move that many leading retailers are finding really increases their conversion rates,” says Patti Freeman Evans, JupiterResearch analyst.

Lillian Vernon’s numbers back that up. Three months after the redesign, LillianVernon.com experienced a substantial increase in conversion rates, Shapiro reports.

In addition, the company has been increasing its efforts in paid search. As part of its commitment to testing, Lillian Vernon tries out various language combinations on its landing pages to see which ones get picked up more by search engines. That effort has succeeded on two fronts: “Several months after the redesign debut, we saw a 40% increase in traffic to our landing pages,” Shapiro says. “Sales conversions on search traffic have also increased 40% since we got smarter about the language we use.”

Mountain Equipment Cooperative’s e-commerce site proves retailers don’t have to scale impossible heights to use the web as an effective multi-channel tool. To compete against bigger retailers, Mountain Equipment, a small Canadian multi-channel retailer of outdoor apparel and gear, has put together an effective e-commerce site with multiple tools that drive multi-channel sales.

When Mountain Equipment built its e-commerce site in 2001, the co-op did so with the goal of letting its more than 2 million members make a purchase, check the availability of merchandise and order a catalog, says chief information officer Georgette Parsons. Over time, the retailer has added enhancements to encourage multi-channel sales.

For instance, Mountain Equipment offers an interactive wish list and gift certificates that can be used in various combinations. The wish list enables customers to create a list and it is tied to the inventory system so customers can check the availability of stock online and in stores. Co-op members can also purchase gift certificates online and redeem them in any of Mountain Equipment’s 10 stores or at MEC.ca. Customers can also use the web to track their remaining gift card balance.

Mountain Equipment rounds out its multi-channel program with other Internet-based elements such as buy-online, pick-up-in-store and web-enabled kiosks. But what makes the co-op’s integrated strategy work is the extent to which Mountain Equipment goes to learn what drives shopping behavior and how customers can be motivated to increase their spending across multiple channels. “We know who our members and customers are and give them ways to shop how they want and when,” Parsons says. “We also know members who shop across multiple channels are likely to spend twice as much as a member who shops one channel.”

Other retailers are doing an effective job with the web to achieve multi-channel integration, but what makes Mountain Equipment unique is its small size and ability to embrace e-commerce changes quickly, says Manivone Phommahaxay, consultant, user experience, Molecular Inc. “MEC.ca has a community-like feel that gives it credibility,” she says. “This trait increases a visitor’s trust and sense of belonging.”

Aproprietary technology that lets site visitors sample music and see the actual notes being played and take an interactive guitar lesson is helping Musicnotes.com gain market share in the fragmented sheet music business.

But it’s not the available inventory that’s helping Musicnotes, a web retailer with annual sales of about $4 million and more than 200,000 sheets of music and other merchandise in its online library, make a bigger name for itself in sheet music. Instead the company is using an innovative mix of digital technology and merchandising to stand out in the crowded online music space. Since introducing an internally developed digital music service about five years ago, Musicnotes has sold more than 1 million sheet music downloads.

Sheet music sales are up because Musicnotes is building and enhancing interactive applications that enable site visitors to download music samples and see how the notes are played as they hear the music. Another interactive application, Guitar Guru, lets visitors play a snippet of music, see how the notes are played on a guitar and then purchase the full song along with an extended lesson. “Compared to a conventional lesson which goes for $20 or $25, we are offering interactive lessons and a download for $5 to $10,” says chairman and chief financial officer Tim Reiland. “By enhancing the shopping trip with a unique digital experience, we can sell a customer a sheet music print out, a download and a music lesson all in one simple purchase.”

Musicnotes has enhanced Guitar Guru with a virtual fret board that displays the proper fingerings in real-time. An adjustable playback and tempo feature also enables students to take the lesson at their own pace. Musicnotes began implementing digital technology originally to drive the sale of hard copy sheet music. But downloads now represent between 70% and 80% of sales, a fact that impresses direct marketing analysts. “The site appeals to a more serious buyer who wants to get right to the artist of interest and avoid the promotional fluff,” says Shari Altman, president of direct marketing consulting firm Altman Dedicated Direct. “The digital technology does more than just let customers sample the merchandise. The download samples and interactive lessons create a very unique shopping experience.”

No one will ever confuse Powells.com with Amazon.com or other sites that peddle books alongside clothing, electronics, toys, and other merchandise. From the personal recommendations of staff members to the ongoing tales of Fub the store cat, Powells.com has the feel of a neighborhood bookstore staffed by avid readers.

“We want to capture the sense that we are passionate about what we do,” says Michael Powell, president. “We want people to sense they are in a real bookstore buying books from real people.” Powell also operates six stores and five warehouses in the Portland, Ore., region.

Powell’s Books, an independent bookseller since 1971, went online in 1994. The web site now accounts for about a third of the retailer’s sales, Powell says. Its inventory includes more than 4 million used, new, rare and out-of-print books and 40,000 DVDs.

In addition to book listings, Powells.com presents a wealth of material designed to bring customers back to the site. Among features are interviews with authors, daily book reviews, and original essays. In October, Powell’s introduced 12-minute podcasts featuring interviews with leading authors, breaking news from the book world, short readings, and music performances. The interviews are recorded onsite at Powells’ Portland store.

The podcasts are one more way for Powell’s to reach beyond its core base to people who want “something lighter, faster, and more conducive to a busy lifestyle,” says David Weich, director of marketing and development. During each episode, listeners have a chance to call in and win a $1,000 shopping spree at Powell’s.

The site also offers educational content. In one section, for example, Powell’s posts photos to illustrate terms used to describe features of rare books. It also explains the terms used to describe the condition of rare books.

Powell’s relaunched the site in July, upgrading search technology, putting more focus on recommended reading, and adding a best seller list that updates hourly. It also repackaged content about authors into one section called “From the Authors.”

“Every page is different,” Weich says, adding that site was due for a redesign. “It had grown up as web sites tend to do. You leave them for two or three years and end up with these appendages that don’t quite fit.”