Meanwhile, PayPal acquires mobile payments firm Paydient.
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Retail consultant Lauren Freedman of The e-Tailing Group says Crutchfield succeeds in differentiating itself on the basis of its knowledge of the category. “Whether it’s the Crutchfield Advisor, their knowledgeable experts on live chat, even ‘Why shop Crutchfield’ on the home page-it all goes to that positioning,” she says. “They go the extra mile and try to do everything they possibly can to help the customer-they do what the mass merchants say they are going to do.”
When you sell in a niche market, the key to success is usually to define the targeted customer and market your product where they are. But it’s not that easy for Headsets.com.
Rather than marketing to a clearly defined niche as many other online retailers have-i.e. teens, plus-sized men or women, or seniors-Headsets.com’s niche market is users of office headsets. And it’s not always an easy category to define or to figure out where customers are.
“Our growth comes from new users of office headsets,” says Mike Faith, CEO and president. And that growth comes at a time when the company’s largest potential customer base-domestic call centers-is drying up. “Most of that business is moving offshore,” Faith says.
That’s left Headsets.com pursing small to mid-sized offices where the retailer has to rely on catalogs and direct-mail pieces to stimulate interest and drive sales to the firm’s web site and call center.
Complicating the job for Headsets.com is that headsets are a commodity product. “Our product is a fairly simple piece of business desktop electronics. Yet our customers tell us over and over that there is real confusion when it comes to buying a headset for the first time. Most people don’t even know what questions to ask,” Faith says.
Rather than sell on price, Headsets.com has found success in its approach to customer service and customer education, leveraging the power of the web to provide information more quickly and efficiently and at lower cost than through call centers or printed material.
“When most visitors come to Headsets.com, they haven’t decided on a product,” Faith says. Selling then becomes a matter of explaining to the customer how each product works and discussing with them which headset works best for their application. Headsets.com’s free trials, fast shipping and easy return policies are all centered on customer comfort.
And while it might seem difficult to discuss various headset products in an online world, Headsets.com solves that problem through online chat developed by LivePerson. “We initially gave a very small amount of real estate on our site to the chat function, but the feedback we got was that our customers loved it. Now it forms a large part of the site,” Faith says.
In April, parent Hewlett-Packard Co. acquired online photo service Snapfish with the intent of creating unique digital photography offerings. Snapfish, which has 14 million registered users, offers free online storage and sharing of digital photos, as well printing of digital images and film processing, for a fee.
HPshopping.com plans to closely integrate Snapfish’s services into its digital photography offerings. Already, customers of both units have been e-mailed discount coupons for HP cameras and printers and free shipping of photos printed by Snapfish. Ultimately, the integration of Snapfish is viewed as a way for both units to bolster their customer acquisition efforts.
“Our partnership with Snapfish is a way to move their customers into home printing and our customers to Snapfish,” says Peter Moreo, director of sales and merchandising for HPshopping.com. “Digital imagery is a priority for us.”
So too is improving search engine marketing to ensure that consumers coming into the site through a search engine land on the correct page. HPshopping.com has begun adjusting its analytics on keywords based on the sales associated with those words. The company’s research into the concept has helped it identify the sophistication of customers using specific search engines and the types of products users of a specific search engine purchase.
“Every customer has a different search path, so it is important to understand which keywords generate sales,” explains Catherine Paschkewitz, director of consumer marketing for HPshopping.com.
Efforts to bolster sales are also being extended to allow less technically inclined customers to select a pre-built system from a menu of the most popular configurations. The service is expected to play well with gift givers.
“HPshopping.com is really beginning to understand that the future of consumer electronics is merging with home entertainment to create a technological lifestyle,” says Kent Allen, president of The Research Trust.
When consumers think of purchasing digital music, many think of iTunes.com, the online retail store that supports Apple Computer’s iconic iPod. In the past year, however, iTunes has transformed itself from a destination site for iPod users into the premier retailer of digital entertainment.
What sets iTunes apart from the competition is that it is part of an end-to-end user experience Apple has created for digital entertainment. The store features more than 2 million songs, as well as music videos, 15,000 podcasts, 10,000 audio books, and select hit television shows from Disney and ABC, such as “Desperate Housewives.”
“ITunes is ahead of the curve on most of the items it carries,” says Ted Schadler, vice president and principal analyst with Forrester Research. “They have a good merchandising strategy aimed at the mass market, the site is well organized, and their search applications work well.”
In short, iTunes has created a huge opportunity for Apple to dominate the digital entertainment business, even though iPod users have no alternatives for downloading content. “They may have a captive audience, but they are no slouches as retailers,” adds Schadler.