Groupon says its focus is on the bottom line, rather than top-line growth.
A diversified marketing plan helped Delightful Deliveries boost web sales by 76% in 2005, but the company is also seeing less of a return on paid search, says CEO Eric Lituchy.
Delightful Deliveries Inc. received a gift to start off the new year: another big boost in annual sales. The Internet gift retailer saw 2005 sales rise 76% over 2004; 2004 sales increased 48% over 2003. Sales in 2005 hit $6.4 million, up from $3.7 million in 2004. In 2003, sales topped $2.5 million.
The 8-year-old company, No. 394 in the Internet Retailer Top 400 Guide to Retail Web Sites, attributes the 2005 sales leap to broadened marketing efforts, increased product offerings and greater consumer confidence in Internet shopping.
The numbers of online shoppers and broadband users have increased; plus, consumers are increasingly comfortable online, they know it works, says Eric Lituchy, president and CEO of Delightful Deliveries. “Our continued growth also is due to expanded marketing efforts. We’re very pleased,” he says. “We continue to test new advertising venues. We’ve had good results with targeted advertising such as newspaper, magazine and cable TV.”
One marketing tool proving to be less than delightful for the company, however, is paid search. “ROI for paid search has diminished over time. While such advertising still is important, we no longer are dependent on it,” Lituchy says. “With more companies in paid search comes increased competition. And that’s what hurts that effort. Plus, it’s a fairly open exchange of information. Everyone knows the keywords each other is bidding on, and it becomes less and less effective. It’s almost too measurable.”
In the year ahead, Delightful Deliveries plans to improve its site’s search functionality. “Our current search is basic and doesn’t allow consumers to drill down beyond keywords and price,” Lituchy explains. “We’re considering Endeca, Mercado and WebSideStory to help us enhance our search capabilities. Among other things, we want to implement search by occasion, popularity and new products. We’re looking for a solution that will help guide customers to the perfect gift.”