Retailers shift their ad spending from TV, radio and print ads to digital ads.
U.S. Auto Parts Network reported net sales for Q2 2008 were $43.1 million, up by 2.4% from $42.1 million in the prior year period. But the online provider of automotive aftermarket parts and accessories also posted a net loss of $12.1 million.
U.S. Auto Parts Network Inc. reported net sales for the second quarter of 2008 were $43.1 million, an increase of 2.4% from $42.1 million in the prior year period. But the online provider of automotive aftermarket parts and accessories also posted a net loss of $12.1 million. U.S. Auto Parts is No. 94 in the Internet Retailer Top 500 Guide.
The company also reported for the second quarter that its conversion rate was 1.39% vs. 1.37% during the corresponding period of 2007; customer acquisition cost was $5.23 per customer, compared with $4.83 during the corresponding period of 2007, and compared to $5.11 in the first quarter of 2008; the number of monthly unique visitors rose to 24.1 million, up by 7.6% compared to Q2 2007; the number of orders placed through its e-commerce web sites was about 334,000 orders compared with 306,000 in the prior year period; and average web ticket was $128, down from $132 during Q2 2007.
Expenses for Q2 included the following:
- Online advertising expense was $2.5 million or 5.8% of net sales, vs. $2.2 million or 5.2% of net sales for the prior year period. The increase in marketing spend was largely from terminating marketing co-op reimbursements from an unnamed supplier. That was partially offset by increased efficiency in marketing spending and the introduction of additional affiliate marketing relationships, the company says.
- Marketing expense, excluding advertising, was $4.1 million or 9.5% of net sales, compared with $2.7 million or 6.4% of net sales in Q1 2007. The company attributed the increase to costs associated with establishing and deploying marketing category teams, web site development and the expansion of its call center operations.
- Technology expense was $800,000 or 1.9% of net sales in the second quarter of 2008 compared to $500,000 or 1.2% of net sales in the prior year period.
- Fulfillment expense was $2.4 million or 5.6% of net sales vs. $1.9 million or 4.5% in Q1 2007.
“We are pleased to see sequential and year-over-year sales growth,” says Shane Evangelist, CEO. “We attribute this growth to our continued focus on the customer experience including improvements in our contact center, increased product availability and improved site navigation. We believe the steps taken during the second quarter will enable us to reach a broader audience and help ensure a seamless end-to-end customer experience, thereby positioning U.S. Auto Parts to capture market share of the increasing online aftermarket auto parts market.”
U.S. Auto Parts’ sales for the first six months of 2008 were $83.1 million, down about 3.3% compared with $85.9 million in the same period of 2007. Net loss for the first half of fiscal 2008 was $12.9 million, compared with net income of $1 million in the prior year period.