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.
Retailers hope that being part of the online social scene will build brands—and produce sales, eventually.
On social networking site MySpace.com, members can create their own profile page, posting and swapping with others information on likes, dislikes, favorite music, people and places-and favorite brands and products. Fueled initially by wired youth’s adoption of the Internet as a preferred hangout venue, the growth of MySpace.com, which launched in 2003, is now driven by a broader population. The average age of those creating profiles on the site is creeping up: in August, 65% of users were 25 or older, according to comScore Networks Inc.
It’s adding up to some big numbers, with Nielsen/NetRatings Inc. reporting that MySpace.com had more than 60 million unique users in August, and research firm Alexa Internet Inc. the same month ranking MySpace as the world’s sixth most-visited web site.
Following the crowd
Where people go online, so go marketers. Backcountry.com, for one. The outdoor adventure gear retailer has created branded pages on MySpace for three of its brands that skew toward a younger crowd: snowboard site Dogfunk.com, ski gear site Tramdock.com, and deal-a-day site WhiskeyMilitia.com.
One of the features of a MySpace profile page is a Friends space that displays a count of the page owner’s friends, that is, the number of other MySpace users who have asked to link their pages to the page owner’s page, and have been approved by the page owner to do so. So one driver of user behavior on MySpace is to show popularity by signing up as many qualified friends on one’s profile page as possible.
And where do shopping and driving sales fit into all of this? That’s exactly what Backcountry is trying to determine, and it’s a question that is also top of mind at other forward-looking online retailers as they try to assess the opportunity in social networking and the entire phenomenon of user-generated content that defines Web 2.0.
While user-generated content exists on e-commerce sites and dedicated sites in the form of consumer reviews, social networking sites are something else. These sites exist not for factual content or shopping, but to bring people together online for the purely social purpose of sharing interests, activities, and personal data. They’re some of the most-heavily used sites online.
And whether it’s with a branded page on MySpace, getting their name or products onto other sites such as Facebook.com or YouTube.com, or onto other, more targeted social networking sites such as the fashion-focused Stylehive.com, retailers are testing a multitude of options as they seek their place in the new realm.
At this point, most are doing so without knowing exactly what they’ll get out of it or how it might eventually track to sales. And that is a departure for some in an Internet environment where retailers have become used to calculating their precise return on any online marketing investment.
“We’re in a nebulous phase of Internet marketing right now,” says Dustin Robertson, Backcountry.com’s vice president of marketing. “We’re going from all of those things you did to drive traffic in 2002-paid search, affiliates, e-mail. They were measurable. You could hone and refine them. But it’s been honed and refined to death. If we want to leapfrog and get another revolution going, we have to keep moving with the Internet.”
In the still-developing social network space, Backcountry is attempting to figure out the relationship between participation in social networking and e-commerce sales. It theorized that friends on its branded MySpace pages might form the nucleus of a group of online brand enthusiasts that could ultimately drive more traffic to its e-commerce sites. “The model we were trying to prove was: If we get more friends, does that equal traffic to our sites?” says Robertson.
So did the outcome prove the concept? A year into the experiment and some 3,000 friends later on MySpace.com/Dogfunk, the answer is: not yet. Noting that other branded pages on MySpace such as snowboard maker The Burton Corp.’s have as many as 20,000 friends, Robertson says that at 3,000, he can’t find a friends-to-site traffic ratio. But since many other retailers are also just in the figuring-it-out stage when it comes to social networking, he expects to continue the experiment to see where it leads.
Robertson notes that the exploration of MySpace has been a low-cost endeavor, as the brands’ MySpace pages are administered by Backcountry employees who are themselves MySpace participants. “You can’t hire just anybody to do this. It has to be somebody that knows the right tone, what to do and how it works,” he says. “We had a willing labor pool so we can participate at a super-low cost. At a couple of hundred bucks a month, we will probably continue doing it for a while to see if we can make something happen.”
Robertson hits on a distinguishing feature of many retailers’ current experiments on social networking sites: They don’t have to cost much. Online jeweler Ice.com, for example, has gained the beginnings of a foothold on video-sharing site YouTube.com using little more than the services of a single videographer and the fertile imagination of executive vice president of marketing Pinny Gniwisch.
After seeing the 1 million views garnered by the humorous family video put up on YouTube.com by one of his employees, Gniwisch decided to explore the opportunity on YouTube on behalf of Ice. Hitting the streets of New York with a video cameraman, Gniwisch conducted impromptu interviews using questions designed to elicit answers in which interviewees mentioned jewelry as the best gift they had ever received.
“Most people did say jewelry, but it wasn’t funny,” Gniwisch says. “I realized after studying YouTube and what was successful there that this wasn’t going to do it. So we went in another direction.”
Gniwisch instead reviewed the 30 hours of taped footage to find the most amusing bits, regardless of the topic, and then put them up as brief videos on YouTube with the identifying tagline, “A project of Ice.com.” A second series of videos was shot in connection with a swag suite of which Ice.com was among the sponsors at the Academy Awards. Gniwisch asked visiting celebrities about their mothers and put up the resulting video footage on YouTube in time for Mother’s Day this year. He also gave viewers of that round of videos the opportunity to sign up for a sweepstakes.