Why some retailers like wish lists, which aren’t just for gift-giving any more

Online shoppers are increasingly using wish lists as reminders of what they were interested in but didn’t want to—or couldn’t—buy at the time. “People have limited money they want to spend at one time on books. Having a wish list gives them a way to store the titles they want,” says Kevin Coon, webmaster for Newport Beach, Calif.-based Booksontape.com, which installed a wish list on its web site in April 2000 with vendor WishList.com Inc. Those 10 orders represent nearly 3% of Booksontape.com’s daily sales. “It’s important to us because we want people to remember and we don’t want to lose any potential sales,” Coon says.

Retailers are finding that wish lists accomplish a lot of marketing tasks: acquiring customers, driving repeat business, generating higher sales, creating an incentive for more visits, reducing abandoned shopping carts and even collecting marketing information.

Wish lists reduce the number of abandoned shopping carts by giving shoppers a place to store items they may want to purchase later. Meanwhile, they establish a mainline between the customer and the retailer by enabling retailers to personalize marketing deals based on wish list items. Wish lists also can provide merchants with critical demographic information that can be used for future target marketing. Wish lists are the best way to get a sale from a customer who is not going to purchase something right away: “You don’t lose on that sale if it’s in the wish list,” says Greg Pulsifer, MuseumShop.com’s business development manager. “And you can still maintain customer information and use that to market to those people in the future.”

With all these factors combined, the bottom line with wish lists is really the top line: they can help sell more goods. Just like impulse items help raise sales at the checkout counter, remembering to pick up items in a wish list can boost the average ticket. Sangster cites an apparel retailer whose transaction values go 300% higher when customers use the wish list. And Goldberg says customers’ wish lists can increase sales by 5% throughout the year and 10% to 15% during the holiday shopping season because creators of the wish list direct gift buyers to the list.

But more importantly, not only do wish lists drive to the site shoppers who want to buy a gift for the creator of the list, they also keep the products in the minds of the lists’ owners, making it more likely that they will buy the products at some point, Goldberg says. “As an example, you see a camcorder that you would love to have but you can’t spend the money on it now,” he says. “Odds are you may never go back to that web site to buy it later. There are too many options like physical stores and other online stores. So, with a wish list, there is more stickiness. The customer is more likely to let others know about the wish list and someone else will buy the product for him or her. Or the customer will return to the wish list six months later and say ‘I just got my bonus, now I’ll buy it.’ If they did not have the wish list, they would more than likely buy it somewhere else at that point.”

Another benefit of wish lists is that consumers use them to store items they want instead of creating then abandoning shopping carts. MuseumShop.com’s rate of abandoned shopping carts has dropped from 98% to 95% since the site implemented CloudPop’s wish list software in December, says Pulsifer. MuseumShop.com installed the system specifically to give shoppers a place to store goods they weren’t ready to buy.

But as valuable as saving and increasing sales are, wish lists also provide rich data that merchants can use for future target marketing, Goldberg says. “We can provide retailers a data feed that tells them what items are on consumers’ wish lists. The data feed can plug into a retailer’s marketing tools and retailers can send customers targeted e-mails about what’s on their lists,” he explains. Retailers agree that if they can find out what consumers like they can use that information to sell more to them. Clearly, no other feature is as useful in determining what consumers want than a wish list.

Before MuseumShop.com started target marketing to its wish list customers, the retailer was excited to get the industry average click-through rate of about 5%. “By basing marketing on the wish list information, we’re continually over that average. We’ve had e-mail campaigns with an average of 12% to 15% click-through rates,” Pulsifer says. “Now we get depressed if we get the industry average. We’ve been spoiled.”

Booksontape.com, which launched as WishList’s first client in April 2000, says it’s planning e-mail marketing and is determining how to do that and offer discounts it can afford. “We know we have a lot more money on the wish lists than people have made purchases for,” Coon says. “We’re figuring out how we can sell more and move more products in the wish lists.”

CDNow, one of the most experienced retailers using wish lists, says wish lists can help a retailer develop a relationship with the consumer, increase sales and give customers a reason to shop at a site. CDNow plans to adopt more advanced customer management techniques, such as creating more personalized discounts on wish list items, beginning in the third quarter.

Dana Lasher, vice president of sales and retail marketing at CDNow, which developed its own wish list technology in 1998, says convenience is a customer benefit. But she stresses that wish lists also generate revenue because CDnow runs sales on wish list items. Wish list-based promotions create a 20% to 25% lift in incremental sales. CDNow has different promotions for different types of music which are developed to build traffic, get rid of inventory or improve transaction size with a “buy more save more” theme.

CDNow believes following a wish list strategy is important for survival, especially in this economic climate where consumer sales are sluggish. “The wish list is the most valuable feature because it points toward revenue,” Lasher says. A wish list could be the hook that keeps customers coming to one web site over another. “Wish lists are a valuable asset and we’ll continue to put investment around that,” Lasher says. “Anyone who manages revenue cannot abandon that strategy.”

MuseumShop.com pays its vendor CloudPop 4% of the sale when a customer buys items stored on a wish list and 12% when shoppers click through from a hyperlink on the CloudPop web site. MuseumShop has a staff of only 20 so outsourcing the service was worthwhile so its staff could focus more on internal programming, rather than building a proprietary wish list function for the site, says Pulsifer. “The cost is extremely reasonable because these are sales we never would have had before. Consumers would have just abandoned their carts,” he says.

Even though retailers say consumers are increasingly using wish lists, consumer research studies are not yet showing their popularity. A recent PricewaterhouseCoopers Connected Consumers study says consumers turn to search engines and product information tools more often than to wish lists. However, 19% of consumers said they had ever used a wish list; 5% use them regularly. Among online shoppers who have used wish lists, 39% said they would eventually purchase a product on a wish list from that site. Only 8%, however, said that they buy more from sites where they have wish lists, although vendors disagree. Benjamin Shakin, president of WishList.com, has seen a different pattern with Wish List retail customers. He says that 40% of shoppers who return to the merchant to buy something from a wish list also buy other products.

andrea@verticalwebmedia.com