A new niche nets Compact Appliance more than $1 million in new web sales
An investment in a new niche e-commerce site is generating more than $1 million in new web sales for Richlund Ventures Inc., which also owns and operates CompactAppliance.com.
CompactApplicance.com, No. 281 in the Internet Retailer Top 400 Guide to Retail Web Sites, was founded as a niche retailing alternative to the e-commerce sites operated by larger chain retailers. The site, which generated total sales of about $11 million in 2004, only carries about 700 SKUs such as appliances that fit smaller spaces.
But in the summer of 2004 Richlund decided to explore new niche retailing alternatives and launched PortableAirShop.com, a seasonal e-commerce site that carries about 20 models of portable air conditioners. “It’s our first micro site and it’s doing very well,” says Jason Roussos, senior vice president of strategic development for Richlund.
In 2004, Richlund launched the site without much fanfare as a way to test the market for niche appliance sites, Roussos says. In just over a year of its start, PortableAirShop.com is generating more than $1 million in annual web sales and received between 40,000 and 50,000 site visitors per day at the height of the summer cooling season, Roussos says.
Richlund looks to differentiate its new web site with deeper content such as product reviews, articles on selecting the right type of portable air conditioner and calculator tools that help online shoppers determine how big a unit they need for their living space.
“We offer good content and we stick to our niche,” Roussos says. In the summer of 2005, Richlund expanded its keyword search program to drive more traffic to PortableAirShop.com. The result of a good search engine marketing campaign with deeper content generated sales conversion rates that ranged from about 2% to 2.5%.
While the new micro site may have diverted some traffic from CompactAppliance.com and generates only seasonal versus year-round sales, the experiment is paying dividends. In 2005, the company expects to grow its total web sales base by about 50%, Roussos says.
“We pick and choose our niches very carefully,” Roussos says. “This new site is teaching us how to look for additional sales in the web space we occupy.”
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