The Series B round for Witherspoon’s Draper James brand was led by San Francisco-based Forerunner Ventures.
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With new and different users coming online, retailers are changing the way shoppers are required to interact with their sites to make purchases, analysts say. Features such as site design are becoming more important to the extent they make it make it easier for shoppers to navigate the site and buy. That’s why-unlike in the early days-shoppers can now store their information on sites like Jcrew.com, and why online merchants like Lands’ End have added live customer service.
Some multi-channel retailers are going even farther to make new users comfortable online. In April, Minneapolis-based Target started putting its familiar deal-touting Sunday newspaper circular-which ranks second only to the comics as the most-read item in the paper, according to Neilsen ratings-online at Target.com. Target says its primary in-store customer-female, 42 years old, with a household income of $49,000 and children at home-is the same as its online shopper. But that’s just the point. While not new to Target stores, she’s just the sort of customer who’s apt to be relatively new to online shopping.
The approach, says Rubin, is an example of how smart retailers are using the web in new and different ways in response to the changing market. “Putting a circular on the web may not seem like rocket science, but those consumers at Target are accustomed to getting that circular every Sunday in the paper,” she says. The circular goes on the web on Sunday to correspond with when the newspaper version hits the homes. Interestingly, Targets’ web activity gets a big bump on Sunday and on into Monday, as the circular reaches shoppers through both channels.
The more the web can tap into established consumer behavior, the more successful it will be in marketing to those consumers, industry watchers agree. That’s true at the higher end of the scale, too. While Middle America may never be bread-and-butter business at high-end web stores, “It’s unwise for anyone to ignore a demographic shift,” says Jim Williamson, IDC senior research analyst. “Just because it’s not 80% of your business, it doesn’t mean you can’t try to capture the other 20%. Having a product line that allows people to start shopping with you is a good idea.”
It’s the same strategy that works in offline retailing. “You need to make sure people have an entry point to your business,” he says. “If you go into Tiffany’s you can buy the key chain-almost everything else is out of the budget for the average person. Feature some of those things on the site, make sure people have that entry point and when they want to make a special purchase on which they’re going to spend more than usual, you’re there for them.”
But lower-income shoppers aren’t regulars at higher-priced stores, online or offline. And it’s getting those repeat customers to return and buy-whatever the e-retailer’s targeted market-that’s key to profitability.
Where better to look for prospective online regulars than an existing in-store or catalog base? Unlike earlier times in which channel champions saw web, store and catalog operations as competition even when under a common corporate banner, retailers are no longer worried that migrating store customers to the web will dilute in-store sales. In fact, research suggests the opposite. A recent Jupiter study found that multi-channel marketers can expect per-customer spending to be about 30% higher among customers who shop across the merchant’s various channels than can retailers who operate in a single channel.
That’s why Seattle-based Nordstrom.com recently put its entire catalog online. Nordstrom.com shoppers can answer the quizzes and engage the zoom and rotational close-ups and other features of the highly interactive web site-or they can simply click on the catalog icon, which pops up page by page, a digital clone of the familiar paper catalog delivered to their mailboxes.
“It’s important to have that offering of merchandise accessible through the web for customers who may be more familiar with shopping in the catalogs, or in the store,” says a Nordstrom.com spokeswoman. And partly in a bow to new shoppers less familiar with the site or with Nordstrom’s brands, Nordstrom.com has made a powerful site-wide search prominent in an upper corner on each web page. “We’ve found that even for customers new to Nordstorm’s, the search feature is probably one of the most important ones. Some people aren’t as familiar with our brands or how we merchandise them in our stores,” she says. Nordstrom.com also had new web shoppers in mind with a site enhancement it’s working on now: a more prominent placement for the live help button.
Bigger than ever
Department stores, catalogers and big box stores have been online long enough to see web shopping evolve and to adjust their approaches accordingly. But what about the true pioneers of e-retailing? They, too, are marketing to a broader base of shoppers than in the early days. Amazon started life as book retailer, but now it’s followed the market and expanded into a virtual online department store. “I guarantee you that the early customers of Amazon were quite different from their later customers, who are more likely to be women, parents, or family people responsible for buying holiday gifts for others” says Rubin.
If last year was the year of broad-spectrum advertising and this one the year of more targeted one-on-one marketing, what’s the theme of the future? Integration-even if it means going outside the company’s own channels, and in fact, beyond its own borders-is one way for e-retailers to ensure that they have a presence wherever the customers are, whether young, old, web newcomers or veteran users.
Outpost.com, which started life as Cyberian Outpost, has taken a diversified, Amazon-like approach by adding onsite retail partners from related but non-competing lines. It’s leveraged its infrastructure to drive sales without expanding its owned inventory. The recent deal between Amazon and ToysRUs is one more example of retailers capitalizing on their position to drive business to other businesses in return for a share of sales. “We’ll see further integration between multiple channels-and they don’t even have to be wholly owned channels,” says Rubin.