While the social network’s ad revenue grew 63% year over year in the second quarter, it only added 8 million new users. Interim CEO ...
(Page 2 of 2)
Using affiliate partnerships and aggressive marketing and paying for leads have allowed the firm to grow its online sales by an average of 20% annually over the past several years. And while that number may slow a little as the sites mature, Friedman says he expects nearly comparable growth in the next few years as the company debuts new features on its advanced platform.
In addition, consultant Freedman notes that Redcats is positioned to benefit from being in high-growth markets. She sees particular potential in those sites that specialize in plus-size apparel, such as Lane Bryant, Jessica London and Roaman’s for women and KingSize for men. “Plus-size is a $24 billion business and one that a lot of retailers have overlooked,” she says. “Several of the Redcats brands are heavily focused on that market.”
A step ahead
Indeed, Lane Bryant in particular is a name most frequently associated with plus-sized clothing. The Lane Bryant site knows how to capitalize on that market as it has an online affinity relationship with Figure magazine where it can offer fashion and beauty tips on its web site that are directed toward plus-size customers.
And Freedman notes that plus-size customers are often frequent online shopping customers because they appreciate the anonymity it provides.
While Freedman has been critical of the lack of creativity in many of Redcats USA’s online offerings, she says the Lane Bryant site is more innovative than the others. “Lane Bryant is a step ahead of the other web sites in that its internal search is better,” she says. “It allows customers to shop for a particular outfit easier and its product pages are more interesting.” In addition, customers can find out-of-season merchandise that can be purchased online year-round, and maternity clothes at the Lane Bryant web site that are not available through the catalog.
The Brylane Home site also fares better than some of the apparel sites in terms of its offerings, according to Freedman. Still, Freedman notes that while online sales of home items are growing rapidly, Brylane faces a lot of competition in that market from such established e-commerce players as Linens & Things, Hanover Direct and Bed, Bath and Beyond. That’s where greater creativity afforded by the new platform may play a bigger role.
Overall, Redcats USA benefits from having a parent company that operates 53 e-commerce sites worldwide and sells in 18 countries, including large operations in France, United Kingdom and Scandinavia. The company has overall sales of $4 billion and publishes 30 catalog titles worldwide. While the American operations do not sell outside of the U.S. and none of the foreign sites sell into the U.S., Friedman says there is opportunity to learn from each other. “We share best-practice ideas and we attempt to leverage our multi-national partnerships whenever possible,” he says.
For example, LaRedoute in France will launch its next-generation platform just head of Redcats USA, so the U.S. operations will be able to watch and learn from the debut.
As the second-largest sales generator, the U.S. operations may be able to learn from the French operation. In total, U.S. sales account for 24% of the corporate revenue compared to 47.6% for the French operations.
But in the end, the real challenge for the U.S. operations now is to get its new platform up and running and then find ways to utilize the greater power. Then, Redcats will see if the additional functionality and greater segmentation and marketing capabilities will indeed take Redcats to the next level of e-commerce. l
Lauri Giesen is a Libertyville, Ill.-based freelance business writer.