Facebook ads’ return on ad spend rose 33% year over year, while purchase rates jumped 68%.
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J.C. Penney, noting that 90% of its web customers also shop its stores, is placing more emphasis on coordinating cross-channel marketing and merchandising, using data on its online customers’ shopping behavior to better understand customer demand, and planning to continue making JCP.com, which had $1.5 billion in sales last year, a more attractive place to shop, Boylson says. “JCP.com will become the face of our brand,” he says.
Wal-Mart, while by far the largest retailer in terms of stores and total sales, is also taking several steps to reach its goal of making Walmart.com, No. 14 in the Internet Retailer Top 500 Guide with more than $1.5 billion in 2007 web sales, “the most visited and valued online retail site, by making it easier for customers to shop Wal-Mart both in stores and online,” a spokesman says. Wal-Mart has plenty of room to grow. Its online sales were less than half of 1% of total sales last year, compared to 5% for Sears and nearly 8% for Penney.
Like Penney, Wal-Mart figures that close to all of its online customers also shop its stores, and so it is investing in ways to give shoppers the cross-channel experience they expect, the spokesman says. For example, it’s attracting more shoppers online through a Site to Store program that allows Walmart.com shoppers to have their orders shipped to their local Wal-Mart store at no charge.
50 million page views
Walmart.com has also served up more than 50 million page views to visitors taking advantage of the beta version of its Find in Store feature that lets them search local stores for availability of electronics, video games, baby products, home furnishings and jewelry.
Walmart.com is also continuing to build out its consumer-generated product reviews, which as of last month included more than 300,000 reviews, the spokesman says.
Not to be outdone by rivals, Sears Holdings-including the operations of Sears, Roebuck and Co., Kmart and Lands’ End-migrated its retail sites to an upgraded e-commerce platform last year designed to support more cross-channel shopping, including allowing customers to order online in a store as well as pick up in the store orders placed online.
“Multi-channel represents the potential for a sustainable growth vehicle for our company and represents an opportunity for us to unify and integrate the customer’s experience,” the retailer says in its 2007 annual report.
To be sure, big retailers are looking to their web-focused strategies to continue their strong online growth-strong, that is, relative to their total growth if not to market growth-while trying to spread more of that growth into their stores. In their most recent fiscal years, J.C. Penney grew 15% online while declining 0.2% in overall sales; Wal-Mart grew 25% online vs. just under 9% overall; and Sears climbed 9% on the web against a 4% drop in total sales.
Setting new goals
While the largest retailers keep trying to raise the bar of multi-channel retailing, however, smaller retailers are finding plenty of tricks of their own. They’re defining their competitive positions and deploying technology and business strategies to support them.
ShoppersChoice.com operates its namesake web site as a retailer of general merchandise, but in recent years has discovered its real strength is in operating niche sites like OutdoorKitchensDepot.com and ElectricGrillDepot.com. While their names make it easier for consumers to find them in Internet search, the sites are designed as one-stop-shops in their niche areas with extensive product lines and hundreds of videos and written content on how to operate them. The sites are designed to make it as easy as possible to buy products that can cost thousands of dollars, Hackley says.
“If big retailers throw unlimited resources at our market, they may take a piece of the pie,” he says. “But what they won’t do-what I don’t think they can do-is provide the kind of special attention to customer needs that we do.”
Being a relatively small retailer has also made it easier to quickly roll out special services like monogramming, which ShoppersChoice now offers with its own monogramming equipment for grill covers and other products. After acquiring monogramming equipment and an experienced operator earlier this year, the retailer was offering the service within a week and a half, Hackley says. It attracted 50 orders in the first week.
Hackley also provides extensive product training to his customer service employees. He also takes extra steps to maintain strong relations with suppliers to ensure his drop shipping partners meet the company’s goal of shipping orders within 24 hours, if not on the same day orders are received-a step large merchants with thousands of suppliers would be hard-pressed to take, he contends. “I meet suppliers all the time and buy them dinner,” he says.
An emphasis on strong customer service and fulfillment practices pays off in several ways, says Kugelman of Goldspeed. By focusing on personal service, including requests for ring engravings not usually offered by large jewelry retailers, he says, Goldspeed has received hundreds of favorable comments including many with pictures and videos of customers and their products.
Now Goldspeed is planning to build on the customer feedback stemming from its service reputation by inviting more customers through personalized e-mail requests from Kugelman to submit comments, photos and videos of themselves with their jewelry purchases. Goldspeed is also developing a dedicated section of its site where customers will be able to load and share their content and eventually send it from Goldspeed.com to social networking sites like YouTube.com and MySpace.com.
Retailers like Hackley and Kugelman say one of their advantages is being able to quickly move on new merchandise or new e-commerce technology. Goldspeed, for example, figures it can be more selective in making advantageous buys on the wholesale jewelry market based on hot styles and volatile pricing than behemoths who must buy far ahead of time in larger volumes.
Being more responsive
On the technology front, Goldspeed relies on an e-commerce platform developed in house with flexible architecture to support quick rollouts within weeks of add-on technology, Kugelman says. “It’s more important now in this tough economic market to be more responsive than ever to the customer,” he says.