JD.com and Alibaba create indexes to identify Chinese shoppers’ spending trends, which help retailers gain insight.
Some web-only retailers are turning to mass media ad campaigns to raise their online profiles.
Sometimes search engine marketing, e-mail campaigns and affiliate networks just aren’t enough to drive online sales for pure-play e-retailers. That was the case at Bluefly.com in 2005. The retailer spent years building a reputation for selling in-season, trendy designer clothing at relatively low prices. But while market research showed Bluefly customers were getting the merchandising message, only 14% of the consumers likely to become Bluefly.com customers were even aware of the site.
“That gave us a challenge,” says Bradford Matson, chief marketing officer. “How do we go out and create awareness, what do we do? And the question then is can you create that kind of awareness online only or do you need to use some general advertising techniques?”
For Bluefly.com mass media advertising proved to be the answer. After launching national ad campaigns on TV and in print in September 2005, the e-retailer watched as site visits and sales steadily climbed. In the first six weeks of its most recent campaign-fall 2006-traffic to the web site increased 60% over the previous six weeks, CEO Melissa Payner reported during Bluefly.com’s third-quarter earnings call. The number of new buyers increased by 25% and sales from existing customers grew about 35%. Bluefly.com daily sales on Dec. 11 hit the million dollar mark for the first time.
Bluefly also was able to gauge the effectiveness of the TV commercials almost instantly, Matson says. “What we found out was that people were watching television with their laptops open,” he says. “After an advertisement ran, traffic to the site would go up immediately. We could gauge not only which programs worked but what days worked and what time of day worked.”
Bluefly.com is not the only e-retailer to use offline advertising. Faced with growing competition online from multi-channel retailers, web-only merchants increasingly are turning to mass media used by offline retailers-TV, radio and print-to raise their profiles and attract shoppers.
Like Bluefly.com, Overstock.com was looking to create brand awareness when it launched a national ad campaign in October 2003. Overstock sells brand name products at clearance prices.
“We looked at the Internet and knew that the bricks-and-mortar merchants of the world-the Wal-Marts, the Targets-had the opportunity to be online merchants,” says Stormy Simon, senior vice president of branding and customer care. “We thought it was important to start branding before some of the other bricks-and-mortar brands made their presence online well-known.”
After a four-week test of a radio ad campaign showed promising results, Overstock.com put together a national TV ad campaign featuring model Sabine Ehrenfield touting a wide variety of products and urging consumers to “make the ‘O’ part of your life.” In the commercials Ehrenfield always is dressed in white against a white background, giving them a distinctive look.
Within three years of the campaign launch, awareness of the Overstock.com brand increased to 65% from 12%, Simon says. But it’s harder to quantify the impact of the campaign on sales, she adds. “Someone sees a commercial today and has a birthday in three weeks. Does that commercial prompt them to visit Overstock to buy that birthday present?”
For Netflix.com, the online DVD rental service, mass-media advertising seemed to be the best approach to marketing a product to a mass audience, a spokesman says. “We’re a fast-growing consumer brand, becoming more and more ubiquitous in the consumer mindset,” he says. “When you get to be that type of a company, you go to all the marketing channels you can.” The Netflix spokesman won’t discuss the results of the ad campaigns but will say the company will be shipping its one billionth DVD this year.
For a mass media campaign to succeed for a web-only retailer it must focus on driving traffic to the web site, says Peter Kim, senior analyst at Forrester Research Inc. “Making sure you start with that interactive, digital, focused approach, knowing that it’s all going to come back online, that’s the key when you’re starting to look at offline ads,” Kim says.
At Bluefly, executives thought that goal could best be accomplished by selecting an agency, McCaffery Gottlieb Lane LLC, with no strong ties to the online business or the fashion retail world but solid experience with distinct businesses. “We wanted someone who would really understand we had a unique kind of business and were really consumer product-oriented, and who would really work with us to develop an interesting campaign,” Matson says.
Bluefly wanted an ad campaign that portrayed shopping as an emotional experience rather than a practical one, Matson explains. “People buy higher-end clothing and products because they want to feel a certain way, they want to feel great about themselves,” he says. But the campaign had to communicate that feeling without listing any designer names or prices or discussing discounts, he adds.
What to wear
The end result was Bluefly’s first national ad campaign, dubbed “That’s Why I Bluefly,” which featured a nude woman standing in front of a full closet, frustrated at finding nothing she wants to wear. Her solution is to wear nothing at all. “We got a tremendous response,” Matson says.
In its most recent ads, a young married couple dresses to go to a concert then quickly disrobes and falls into bed as an announcer says, “Bluefly.com-fashion that turns every head in the place-even if you don’t get to the place.”
In creating the ads McCaffery Gottlieb Lane assumed Bluefly’s target shoppers were a computer-savvy group likely to be on the Internet at home, checking e-mail, handling banking or doing a variety of other online activities, says Jerrold H. Gottlieb, chairman and CEO. “We’re trying to reach out to generate interest, peak awareness of Bluefly.com, knowing the people are home in front of the computer,” he says. “But we’ve chosen not to explain what Bluefly is.”
Because the target audience already is online, they can reach Bluefly simply by typing in the URL, Gottlieb says. “Evidence to date suggests strongly that they are, so it says we’re doing something very right,” he says.