Groupon says its focus is on the bottom line, rather than top-line growth.
A key requirement for any online retailer is to understand customers’ needs and wants. But successful specialty retailers take that concept one step forward—they create a bond with their customers.
Internet Retailer Best of the Web 2006
A key requirement for any online retailer is to understand customers’ needs and wants. But successful specialty retailers take that concept one step forward-they create a bond with their customers.
To achieve that bond, some specialty retailers drill their sites down to extremely narrow niches. Backcountry.com, the outdoor gear specialist, sets up mini sites that appeal to what John Bresee, president, calls “very passionate verticals.” It has separate sites for snowboarders, hard-core skiers, bargain-seekers, and middle market, price-sensitive outdoor athletes.
To keep those passionate shoppers coming back, Backcountry.com hires people who are deeply involved in such sports to select products, work in customer service and write content for the site. “These sites allow them to be very, very targeted,” says Patti Freeman Evans, retail analyst at Jupiter Research.
Other specialty retailers also load their sites with content designed to encourage return visits. Online bookseller Powells.com features author interviews, daily book reviews, original essays and 12-minute podcasts with news from the book world, short readings and musical performances. The goal is to make shoppers feel they are visiting a neighborhood bookstore staffed by people who share their passion for reading, says Michael Powell, president.
And BassProShops.com has information on everything from the basics of fly fishing, camping and hunting to what type of footwear is appropriate for each activity. “There are not a lot of retailers who demonstrate this kind of authority on the products they are selling,” says Jim Okamura, senior partner with J.C. Williams Group. “Bass Pro Shops has category expertise that is effectively delivered online-and that is a tough task to accomplish.”
Successful specialty retailers also are continually looking for ways to make it easier for customers to find just the right product for a child. With eToys.com’s gift finder, for example, shoppers begin by stating the child’s age and sex. Shoppers are then asked about the desired price range and the type of toys the child likes to play with, which further narrows down the search. “EToys has a great gift finder that really lets the customer drill down to the right item,” says Lauren Freedman, president of Chicago-based The E-tailing Group Inc.
Thriving online niche retailers also create a peerless shopping experience. That’s the case with Musicnotes.com, a sheet music retailer, which developed proprietary digital technology that lets visitors sample music and see the actual notes being played. It also lets shoppers take an interactive guitar lesson in which fingering is displayed on a virtual fret board.
“The digital technology does more than just let customers sample the merchandise,” says Shari Altman, president of direct marketing consultant firm Altman Dedicated Direct. “The download samples and interactive lessons create a very unique shopping experience.”
If you need proof that online retailers can find success with niche strategies, look no further than Backcountry.com. Since the outdoor gear specialist began setting up niche sites in July 2004, sales have soared. It posted annual sales of $27.5 million in 2004 and is on track to hit $50 million this year. “The open question through much of this year was will this multiple-catalog strategy work,” says John Bresee, president and cofounder. “At the end of October, when we had our biggest month ever, we just looked up and said, ‘boy, this is working.’”
Backcountry.com launched in 1997 with the mission of bringing high-end outdoor gear to the hard-core recreational athlete, Bresee says. But the site gradually drifted into other areas. “I was looking on the site one day and there was a bubble-gum pink daypack,” he says. “That was not hard core or high end.”
To get back to its roots, Backcountry set up sites that would appeal to narrower market segments that Bresee terms “very passionate verticals.” That led to sites for snowboarders (DogFunk.com) hard-core skiers (Tramdock.com), bargain-seekers (Backcountryoutlet.com and SteepandCheap.com) and middle-market, price-sensitive outdoor athletes (Explore64.com).
To make sure the sites carry products that appeal to the athletes in each segment, Backcountry hires employees deeply involved in the sports. For example, DogFunk.com is run by a competitive skateboarder who also coaches the local snowboarding team.
Customer service agents and the content writers for the sites also are hired for their expertise. “There are a lot of sites that sell snowboards but they also do skateboarding or surfing,” Bresee says. “A guy who’s a snowboarder isn’t necessarily a surfer or a skateboarder. We want to talk to the snowboarder.”
The niche sites allow Backcountry to get customers who might not have gone to the main site, says Patti Freeman Evans, retail analyst at Jupiter Research. “Somebody who is looking for downhill skis may not go to Backcountry.com,” she says. “These sites allow them to be very, very targeted.”
Backcountry will continue to spin off new sites, Bresee says. “Our mission is to be the best outdoor gear supplier on the web, and that’s not about being the biggest,” he says. “We want to be first place in the categories that we address.”
When it comes to selling the outdoor lifestyle, BassProShops.com is among the leaders. “Retailers selling outdoor products are selling a vision to the customer as much as they are products needed to be outdoors,” says Kent Allen, president of consultants The Research Trust.
Where BassProShops.com excels is in establishing itself as an authority on the outdoor lifestyle. Customers visiting the site can learn everything from the basics of fly fishing, camping and hunting, to what footwear is appropriate for each adventure. The detail in these tutorials makes it extremely easy for customers to choose the right equipment. “There are not a lot of retailers who demonstrate this kind of authority on the products they are selling,” says Jim Okamura, senior partner with J.C. Williams Group. “Bass Pro Shops has category expertise that is effectively delivered online-and that is a tough task to accomplish.”