Books/CDs/DVDs

Internet Retailer Best of the Web 2007

Abebooks.com
iTunes.com
Netflix.com
SimplyAudioBooks.com

Back in the day, books and CDs were the products that pioneered e-retailing. Because retailers of these products generally have been selling for longer periods than many other merchants, they have always had a leg-up when it comes to innovating web site design and functionality. Today they continue to march forward, but some of these e-retailers are marching at a faster pace—and as such easily staying ahead of the pack.

Abebooks.com marched way ahead of the pack this year by investing in a social networking site that today links social networkers at LibraryThing.com with the products and content on Abebooks.com. Social networking is a wholly unproven marketing tactic for e-commerce—and basically any industry. But Abebooks.com executives believe this kind of use of a social network will pay off.

Ahead of the game as always, Apple’s iTunes this year leapt into downloadable movies, a product for which demand in the United States is at best difficult to measure. As part of the launch of iTunes 7, the newly redesigned version of the iTunes online store, the company now offers movies.

And on the subject of film, movie master Netflix also is way out in front in the Books/CDs/DVDs category, making great strides with the technique of personalization. Netflix is one of the true innovators when it comes to merchandising and selling in a way that is unique to each customer. And this year it decided to innovate the art of personalization even more. Surprising many industry observers, Netflix decided that to make its personalization tactics even better it would turn to its customers for help. In an open competition it calls Netflix Prize, Netflix will award $1 million to the first person or team that can develop a new personalization engine that will improve the accuracy of its movie recommendations by at least 10%.

After achieving 247.5% sales growth in 2005, SimplyAudiobooks.com this year pushed hard to increase the efficacy of its marketing and conversion efforts by 50% in order to continue its considerable growth. The company now is using landing pages more effectively, says Sanjay Singhal, vice president of marketing, bringing pay-per-click bid management in-house and creating multiple domains that specialize in each of its product lines.

A bibliophile hears about a book on Zen Buddhism and meditation that intrigues him but doesn’t know the title or any other specific information, except that the author might be Korean. Hearing of his plight, some might say, “Good luck.” But not Abe.

The content-rich and uncluttered Abebooks.com provides the tools and the people to help anyone try to find a book—whether the searcher knows a lot or little about it. The e-retailer’s powerful site search and drill-down technologies and techniques help shoppers dig their way through the merchant’s pile of 100 million books. And if a shopper simply has too little to go on, he can get a little help from some friends in trying to find the needle in the haystack.

Earlier this year Abebooks.com made a significant investment in LibraryThing.com, a social networking site for book lovers. Since then the e-retailer has been creating links between the two sites to bring more bibliophiles together and get more of them to search for and purchase used and rare tomes. So if the shopper looking for the Buddhism book gets profoundly stuck because of his lack of information, he can send out an all-points bulletin to LibraryThing social networkers, many of whom may be able to help in the hunt.

“We’re really in the search business; we’re about finding a unique book,” says Boris Wertz, COO at Abebooks Inc. “And making it easier to find books on our site beyond using the search tool is a major goal of ours.”

LibraryThing is a fantastic tool for avid book readers and collectors and may be even more sophisticated than the community features of “the Big Kahuna” of online bookselling, Amazon.com, says Sucharita Mulpuru, senior retail analyst at Forrester Research Inc. “The tags seem more relevant,” she adds, “and the lists seem more germane to book lovers than the random lists that often show up on other user-generated content sites.”

Keeping pace with the rapid evolution of iPod technology is no easy task for even the most devoted iPod user, but iTunes.com makes it look like child’s play. The iPod has essentially become a hardware platform for iTunes, which in turn makes the digital entertainment retailer a content engine for iPod users. Podcasts, television shows, music, games, audiobooks, and movies can all be downloaded from the iTunes store to an iPod.

“From a merchandising perspective, iTunes evolves with the expanding capabilities of the iPod,” says Patti Freeman Evans, senior analyst, retail industry for JupiterResearch. “iTunes is the store where iPod users go to get content.”

Increasingly much of that content is becoming more targeted to specific consumer segments to coincide with the multitude of iPods and their varying capabilities. In September, the National Football League announced it had reached a deal to download highlights from individual regular games. Shoppers can purchase a single game for $1.99 or buy a season pass for $24.99, which entitles them to have game clips from their favorite teams automatically downloaded to their iPods.

IRCE 2008 Conference Multi-Media CD-ROM

“When there are iPods that can help runners track their pace and mileage, the merchandising around this platform has to be pretty sophisticated,” says Freeman Evans.

As iconic as the iPod has become, iTunes is more than a one-trick pony as a retailer. One area where iTunes has excelled is cross-channel marketing. The October announcement that Starbucks’ Hear Music catalog is available at the iTunes store is a perfect example of iTunes’ cross-channel marketing prowess. The deal is expected to drive significant traffic from Starbucks customers who hear a song from the Hear Music catalog and want to download it. Starbucks typically displays the CD playing in its outlets as a way to promote in-store CD sales.

“Not everyone wants to buy a CD to get a single song if they can get what they want on iTunes,” adds Freeman Evans. “Starbucks has shown it can move a lot of CDs through its stores, so there is no reason that can’t happen through iTunes.”

For iTunes, the hits just keep on coming.

Movie buffs in general like to discuss. Or, some might say, argue. What’s the best film of all time? What was Brando’s greatest role? You actually enjoyed “Police Academy 4: Citizens on Patrol”?!

Netflix.com enables subscribers to argue all they like through its well-organized and unusually insightful social network. Just how insightful? Once two subscribers link as friends they can peek into each other’s rental queues to see what the other is renting and has rented. Linked members also can exchange all the messages they like and recommend movies and TV shows on DVD that can be instantly added to a member’s rental queue without leaving the web page they’re on. This bypassing of the need to move to a new page or reload the same page is accomplished through Netflix’s pioneering use of AJAX techniques, which makes it much easier for a customer to take action—an action they might not otherwise take.

Social networking and effective use of new technologies are only two factors that make Netflix.com stand out in the crowd. Its five-star rating system is a product review-like function that not only shows linked subscribers exactly what their friends thought of a film but works behind the scenes to generate web pages that contain films and TV shows the rating technology believes a subscriber will enjoy. The more movies a subscriber rates (films do not have to be rented in order to be rated), the more precise automated suggestions will become.

“Netflix is an innovative retail site that has beautifully harnessed the online consumer’s love of convenience and ease,” says Maris Daugherty, senior consultant at J.C. Williams Group Ltd. “Having seen e-retailers like BagBorroworSteal.com in other categories adopt the Netflix business model, I’m waiting to see how Netflix may perhaps expand its merchandise mix beyond movies.”

Retailer marketers that stand still quickly get lapped by the competition. That’s a lesson SimplyAudioBooks has kept in mind as it overhauls its marketing strategy to continue fueling its rapid growth. Gone from its marketing strategy despite growing sales 247.5% in 2005 are such standard techniques as banner ads. In their place have come such innovative concepts as free video clips of author interviews, a blog for customer testimonials, news and free offers sent to MP3 players and free downloads of select books.

“They are creating a more personalized marketing environment,” says Chad Doiron, a senior strategist for Kurt Salmon Associates. “That is what online shoppers want, especially consumers in their teens and twenties that can immediately sniff out whether a marketing strategy is not personalized at a glance. This segment looks first at how genuine the strategy really is.”

A central figure in SimplyAudioBooks’ marketing strategy is the MP3 player or iPod, which has become a hardware platform for entertainment retailers to leverage in new ways. “The iPod expands the audience for the audio book, because books can be downloaded onto the device, along with other marketing messages,” adds Doiron.

The inclusion of video author interviews is an example of how SimplyAudioBooks is using MP3 players to create a deeper connection between the shopper and the book by using visuals to provide an engaging dimension that neither print nor audio book reviews can match. The reviews are hosted by James Michael Tyler, who played Gunther on the sitcom “Friends,” and produced by Expanded Books. In the reviews, Tyler and others encourage authors to talk candidly about what inspired the book and its main message.

“It’s a great way to help readers determine their reading pleasures,” says Maris Daugherty, senior consultant for J.C. Williams Group. “SimplyAudioBooks is delivering a solution for technology-savvy customers that are asking for more options in consumption and procurement of their media needs.”

As a bonus, SimplyAudioBooks offers a loyalty program shoppers can use to earn points and apply to future purchases. With new marketing, SimplyAudioBooks is writing a new chapter.