A Profitero study showed Target’s online prices were 25% more expensive than Wal-Mart’s, which were just slightly more expensive than prices on Amazon.
Replacements Ltd. grew web sales by 23% to $51.75 million in 2006 by managing pay-per-click marketing and holding firm to its fulfillment mantra: No free shipping.
Replacements Ltd. grew web sales by 23% to $51.75 million in 2006 by managing pay-per-click marketing and holding firm to its fulfillment mantra: No free shipping. The company specializes in completing shoppers’ china, silverware and crystal sets.
Online sales for Replacements grew from $42 million in 2005 by staying focused on online marketing, a large portion of which is in pay-per-click campaigns, says Jack Whitley, senior vice president, e-commerce. The company, No. 174 in the Internet Retailer Top 500 Guide, has more than 1.3 million SKUs and carries more than 250,000 patterns among its tabletop products, he says.
“We are now running close to 4 million ads on our web and pay-per-click components. It’s tough when each ad has its own discrete sales and cost components. Optimizing a campaign of that size is tough,” Whitley says.
Efficient Frontier Inc. assisted with search engine marketing in 2006 and combined with Replacements’ ability to manage a labor-intensive fulfillment process to reach its growth rate. The catalog/call center business started as a storefront but has evolved since its web site rollout in 1998.
“The web is a big help in scaling business, but it’s not automatic. We have worked really hard to keep up annual growth and, in what is probably unique to our business, we don’t offer free shipping,” Whitley says.
The replacement tabletop business is labor intensive, with a multitude of delicate products to pick, pack and ship. Many hands might touch each item in a business that’s dependent on outside suppliers to hunt down missing pieces to consumers’ tabletop products, many of which are family heirlooms.
“80% of our SKUs are in patterns no longer being made,” Whitley says. “But there are plenty of folks out there who have inherited them. We catalog consumer requests, the bulk of which come in by the web, then put them in a matrix and calculate what we can pay. Then we put out images of the pieces to a network of suppliers who find the pieces, send them to us and we ship them to customers.”