Groupon says its focus is on the bottom line, rather than top-line growth.
(Page 3 of 5)
Meeting the needs of Middle America
When you’re selling about $500 million worth of merchandise annually via the Internet and trying to appeal to a broad segment of Middle America, you face a tough challenge. But JCPenney.com has been able to post sales gains of 25% this year while offering tens of thousands of items. The key: knowing the customer. “This retailer attracts less well-to-do and technology savvy customers than you’ll see shopping at Amazon.com or the other bellwethers,” says Geoff Wissman, vice president at Retail Forward Inc. “JCPenney doesn’t offer a lot of bells and whistles, but it does offer a highly functional site.”
Indeed, JCPenney does know its customer-modest income, predominantly female and, possibly most important, operating on a dial-up Internet modem-and designs its web site accordingly. “We don’t go for sexy features because we want to make sure we can offer fast downloads on dial-ups,” says Bernie Feiwus, senior vice president. “A lot of the features out there today are great if you’re operating on broadband, but most of our customers aren’t.”
Another way that JCPenney serves customers is to rely on years of experience in the catalog business to help with customer service and fulfillment. To that end, JCPenney works to integrate the various sales channels. Customers can have orders delivered for pick up at a local store and they can return merchandise there. The catalog refers customers to the web site for more extensive selections.
“Junior apparel and maternity clothes are not big sellers in our catalog and we can’t justify spending a lot of square inches on that merchandise,” Feiwus says. “Our Internet costs are lower and that allows us to offer a full line of these products. We have references in the catalogs telling customers to check out these products online.”
Similarly, the chain’s point-of-sale terminals are equipped so that if a store customer wants an item in a different size or color from what is in stock, the clerk can scan the tag and check the web site. If the item is available, the clerk can help the customer order it right there. The web site also sells a lot of items not available in the store, such as electronics, toys, small appliances and exercise equipment.
Although its attention is on selling goods, JCPenney supplements its retail offerings with related editorial content. On the window furnishings page, for example, the site has tips for how to measure windows before ordering and what type of window treatments look good on various window shapes. Likewise, the luggage page explains which bags fit in the overhead compartments of various airplane models.
Unique Visitors (monthly)
Search Engine Management
Content Delivery Network
High class and high tech
When you have the reputation for quality and service that Neiman Marcus has, your web site can’t do just an adequate job. Online customers have to feel they’ve walked into the store. With personal e-mail and chat services, high-quality graphics and superior search capabilities, NeimanMarcus.com replicates the parent company’s shopping experience online.
“This web site really knows its customer,” says Lauren Freedman, president of consultants The E-Tailing Group Inc. “It has excellent visuals and provides a great showcase for top-brand boutiques. It does whatever it takes to satisfy the customer.”
Indeed, high-end names are what NeimanMarcus.com is all about. Its customers are more likely to search by brand name than product category. “We’re very focused on designer names,” says Michael Crotty, vice president of marketing for NM Direct. “While our customers can type in sweaters, they’re more likely to want to see what we have in Burberry or Prada.”
These designer names are critical when Neiman Marcus works with outside search engines as well. “We won’t pay to have our name pop up if someone just types in ‘shoes’, but we want to be sure we’re at the top of the list if they type in ‘Gucci shoes,’” Crotty says.
Online advice is critical as Neiman Marcus offers both editorial content informing customers what handbags and shoes are stylish this season as well as a personal e-mail and direct-chat service with recommendations from fashion experts.
Neiman Marcus also has integrated the web site with its stores and catalog. It allows customers to return web merchandise to stores and uses the various channels to cross-sell items. “We send out 90 catalogs a year, but each has a focus,” Crotty says. “That focus may be on jewelry, formalwear or handbags. But if a customer needs shoes and the catalog is focused on handbags, the catalog will refer them to the online site where there will be a more extensive shoe offering.”
Indeed, Crotty says the online offering is broader than either catalog or store selection. “We sell a lot of health and beauty items online, but have a limited selection in our catalogs,” he says. “We also sell home accessories, entertainment centers and fine linens online that we don’t have the floor space to sell in stores.”
Still, a lot of the attention is on apparel, which has been a hard sell for online retailers. Neiman Marcus’s job is a little easier because it is selling familiar brands and designer products. It also features a virtual model. “It gives customers good representations of what the items really look like,” says Heather Brilliant, stock analyst with Morningstar Inc.