Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
Giving fans a forum can pay off for retailers seeking new ways to build traffic and sales.
Though Horse.com’s community forum is not quite one year old, it ranks third in a Google search for “horse forum” and boasts more than 3,000 registered users and nearly 250,000 message posts. Rival HorseForum.com, first on the Google hit list, has only 352 registered users and fewer than 5,000 posts.
Horse.com’s Forum.Horse.com has something else HorseForum.com does not: an Internet retailer owner. Users might not realize this because there’s just one Horse.com banner ad on the forum home page, but PetsUnited LLC operates Forum.Horse.com. PetsUnited runs numerous e-retail sites in the animal kingdom, including Horse.com, Dog.com, Bird.com and Ferret.com.
“The users built their own community,” explains Greg Patterson, COO. “It has been relatively easy to do. People want to share information and talk about their passions. They love talking about themselves and their animals.”
Hundreds of horse lovers routinely are in the forum swapping training and grooming tips, debating the virtues of dirt vs. concrete barn floors, or discussing the finer points of dressage. They also talk about products, including those available at Horse.com.
Tails also are wagging at Forum.Dog.com, a going concern when PetsUnited picked up the Dog.com domain in 2004. It scores first on a Google search of “dog forum.” The dog lovers aren’t as chatty as the horse lovers, but they outnumber them. Forum.Dog.com has almost 24,000 registered users who have posted nearly 260,000 messages. Rival Chazhound.com, which scores second on the Google search, has about 13,500 users and a message count of almost 600,000.
In recent years some e-retailers have added community to content and commerce as components of an overall e-retailing package-but that package is hard to find. Internet retailers complete commerce first; many then add content. The community component, though, usually proves elusive.
Most of the time an online forum and a retail business are not natural partners, contends Hung LeHong, retail analyst and vice president at research firm Gartner Inc. “A successful forum requires a tribe, a strong community,” he says. “And there needs to be passion for the merchandise you’re selling. It’s hard to get something going for a staple product.”
Only 6% of retail sites offer community forums or blogs, the two main instruments of community building, according to “The State of Retailing Online 2006” by Forrester Research Inc. and Shop.org. Retailers with forums are benefiting by turning forum users into regular customers, conducting market research among forum members and goosing their sites’ natural search results because of the high incidence of relevant keywords in posts. E-retailers with successful forums say direct return on investment is difficult to measure, but they don’t doubt it’s there and are more than willing to keep building and enhancing communities.
PetsUnited is continuing to build. Focusing on a different sort of living entity, the retailer soon will launch e-commerce site Garden.com and Forum.Garden.com. The domain is “forum worthy,” says CEO Alex Tabibi, because it’s simple to remember; plus, the subject, like pets, inspires passion and endless discussion.
After the one-time cost of software and set-up, the forums cost “in the low thousands” per month to maintain, Tabibi says. It’s difficult to measure the impact of forums on the bottom line, but that’s not the primary motivator, he adds.
“We’ll get a lot more traffic from natural search or affiliates,” Patterson says. “The forums are kind of a soft sell. If they talk about a supplement they’re giving their horses, we might get some sales off that.” PetsUnited has staff members prowling the forums to discover new products creating talk among users; management then considers adding items with a buzz to inventory. “We’ve picked up maybe a dozen new products this way,” Patterson says.
Forums have been a key component of Bodybuilding.com since its debut in 2002, says president Ryan DeLuca. “They make sense for our type of visitor,” he explains. “I just love the idea of someone in one country trying to increase their bench press, and someone on the other side of the world telling how they had the same problem and solved it.”
The fitness e-retailer’s forums are beefier than its customers: almost 500,000 registered users and more than 12.5 million posts. Between 2,000 and 3,000 users from across the globe are in the forum at any given time, DeLuca says. As such, forums require a significant hardware investment by Bodybuilding.com, which spends $30,000 every time it adds a server to handle increasing traffic. DeLuca’s annual forums budget is about $100,000 for additional hardware and bandwidth. Otherwise, the forums maintain themselves, with help from 20 volunteer moderators who screen posts, ban troublemakers, douse flame-wars and keep pranksters from posting inappropriate images.
DeLuca hasn’t computed hard return on investment because he says it’s difficult to say whether someone’s forum visit motivated a store visit. “We can measure direct jumps from the forum to the store, but not the bigger picture,” he says. His primary motivation is to continually boost the number of Internet users visiting the forum and e-commerce sites daily. “We prefer if someone becomes an active member of the community before becoming a customer,” he says. “If we can get them to become part of the community, then the more content and help there is, and users come back every day.”
On a different note, Bodybuilding.com’s product suppliers have discovered forums are a valuable source of market research. “A lot of our vendors will assign someone to become a member of the forum and participate,” DeLuca says. They’re not allowed to disguise their identity, which would be bad for the forum’s culture, he adds. The benefit is direct feedback on their products.
“Our users know about the little brands, not just the big ones, and we know if they talk about them on the forum, they’ll always become good sellers,” DeLuca says. One CEO was abashed to discover that the “secret” ingredient for a new supplement was common knowledge on the forum before the supplement hit the market.
BassPro.com, operated by outdoor sports retail chain Bass Pro Shops, offers forums very popular among customers, despite a plethora of competition from players such as BassResource.com and Hunting.net. BassPro.com placed the forums in its Outdoor Library section, which offers comprehensive reference information and original articles.