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While Sears and Horizon Hobby are finding ways to engage traffic driven to brands and product categories within their main sites, CSN, ShoppersChoice and other niche players like PlumberSurplus.com LLC are finding success building out sites targeted more on generic product terms than on established product brands.
A merchandising approach sharply focused on a product category, including extensive category-focused content like learning guides, helps to grab customers during the early stage of shopping and researching before they decide on a particular brand or make a purchase, says Timothy Jackson, co-founder and co-managing partner of PlumberSurplus.com, which recently expanded from plumbing supplies into the outdoor recreation market with OutdoorPros.com. “It keeps them thinking about our site while they continue researching products and brands,” he says.
That general strategy has worked well for CSN Stores also. With more than 200 niche web sites selling everything from home furnishings to wall art and woks to waterbeds, it grew sales by 85% last year. CSN is exploring new merchandise categories for presenting on individual web sites, Klose says. “We continue to identify categories we feel are underserved on the Internet,” he says.
With 500 employees at its Boston headquarters, CSN maintains a staff of about 150 customer service reps who gather information from customers on what they like to shop for online. Combining surveys with outside market research, CSN shares the direct feedback from customers among its merchandising and technology staff to help them evaluate potential additions to the retailer’s assortment of niche sites, Klose says.
The niche site strategy is also driving sales at ShoppersChoice.com, where sales are up 45% so far this year compared to the same period last year, following year-over-year growth of 51% to $13.9 million in 2007, Hackley says.
Conversions through the roof
“Last year we built a few niche sites, and our conversions went through the roof,” he says. While visitor-to-sales conversion rates for some products might be under 1% on ShoppersChoice.com, the rates for the same products have often tripled or more on a separate niche site, he says.
That was the case last year with the retailer’s new EggGuys.com, a specialty site for selling charcoal grills under the Big Green Egg brand. Made of ceramic and designed to quickly produce high heat and support a full range of cooking styles, the grills are featured in several online videos that describe their features and how to use them. “They converted at less than 1% on ShoppersChoice.com, but went to 3% to 4% on EggGuys.com,” Hackley says. “By taking the conversion rate up a few percentage points, we can double revenue with the same amount of products.”
ShoppersChoice also operates a handful of other sites, including its long-running BBQGuys.com and two niche sites launched last year, AllMailBoxes.com and UltimatePatio.com.
Hackley identifies market niches by finding interesting products at trade shows, then researches through Google the volume of Internet searches and clickthrough rates on keywords related to a particular product. He figures what he could expect to realize in number of clicks on selected keywords and applies an estimated average purchase price on clickthroughs to pinpoint a market niche worth serving with a dedicated retail web site. “We plan to have 20 more niche sites this year,” Hackley says.
At PlumberSurplus, Jackson and co-founder/managing partner Brian Chelette are taking a different approach to merchandising through multiple sites. They launched PlumberSurplus.com in 2004, building it mostly in house into a category-killer for all things a plumber or homeowner might want to keep things flowing properly-including accessories like shower doors, power tools and heavy-duty workplace radios-with site technology that automatically emphasizes the merchandising of products based on key factors like popularity, profit margins and available inventory. Particularly helpful at engaging site visitors and persuading them to return, Jackson says, are product guides that educate consumers about new-age products like tankless water heaters.
The retailer now wants to build on its online merchandising expertise through additional sites that can complement the efforts that went into PlumberSurplus.com, Jackson and Chelette say. They went live in March with their second site, OutdoorPros.com, tackling a broader category but one still focused on a community of users likely to find value in the merchandising tools like the learning centers designed for their first site. “We have a lot of core technology that we can customize for each new site,” says Vanessa Hofmann, team leader for merchandising.
The company built OutdoorPros.com in seven weeks, copying and pasting code from PlumberSurplus.com, Jackson says. The retailer’s technology platform includes site-and-navigation technology from Mercado, live chat customer service from LivePerson Inc. and consumer reviews technology from PowerReviews Inc.
As it builds out a multi-site market presence, it will try to figure the right mix of technology and merchandising strategy for the customer base of each site. With OutdoorPros.com, it decided to merchandise a broad range of products related to an outdoor lifestyle instead of focusing on a narrow product niche-saving time and personnel resources in the process as it plans its next site, Jackson says. “We didn’t think the outdoor experience for a biker was that different from the experience for a hiker,” he says.
Merchandising and marketing
Providing extensive content in product merchandising also attracts more customers. Although PlumberSurplus competes against many larger home improvement sites, its merchandising strategy shows up in search engine marketing results. A Google search for “bathtubs,” for example, shows the retailer at the top of natural search rankings.
Depth in merchandising content, in turn, leads to more effective landing pages for visitors arriving through Internet search, Jackson says. “When someone is searching for a Kohler model 1501 sink in satin nickel, we land them in a pretty good spot,” he says.
Whether selling to customers through one or numerous web sites, he and other retailers say, finding the right formula of merchandising products can make all the difference in attracting customers, getting them to buy and keeping them coming back.