Newegg’s recipe for success: Know your customer
Although Newegg Inc. spent less than 1% of its budget on marketing, it grew sales from zero to $1 billion in four years by giving visitors to its site “as close to the in-store retail experience as possible,” says Howard Tong, vice president.
“It’s really just getting back to basics,” Tong told attendees Monday at the Internet Retailer 2006 Conference and Exhibition in Chicago. “We wanted to develop strategies to provide the best online shopping experience for our customer base.”
Newegg.com, launched in January 2001, is a pure-play retailer of computers and consumer electronics. It is the ninth largest online retailer in the U.S.
One pillar of Newegg’s strategy is to know the customer, Tong says. “Our core audience was the gamer,” he says. “We need to know what gamers love. What makes them excited? What would make them loyal? What would make them feel like we were their home away from home?”
Newegg accomplished that goal by listening to customers and learning, Tong says. “We were able to determine the feel the web site should have,” he says. “How do our customers like to shop? How do they navigate? How to they search?”
Newegg also used customers’ input to determine the depth and breadth of products to stock. The retailer also posted reviews, testimonials, in-depth technical descriptions, and multiple photos of products, including accessories, software, DVDs and instruction manuals. Newegg is No. 10 in the Internet Retailer Top 500 Guide to Retail Web Sites.
“For our tech audience, they want gigahertz, they want nanoseconds, milliseconds, all sorts of geeky terms,” he says. “We tried to create an experience that was second to none, that really catered to them.”
Tong also credits Newegg’s success to its customer-service philosophy—make the customer happy no matter what, even if it entails replacing a hard drive ruined by the customer’s misuse. “It’s not items we’re selling, but the experience we’re trying to provide to our customers,” he says.
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