Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
These retailers found ways to shine online, despite the tough economy. Here are profiles of the fastest-growing web-only merchant, retail chain, manufacturer and cataloger—plus a handful of other retailers that registered strong online growth.
Retail Chain: Charlotte Russe
Catching up online in a hurry
By Bill Briggs
Charlotte Russe Holding Inc. knows its demographic: young, fashion-conscious female shoppers. What the company was less sure about two years ago was how to expand into e-commerce. But by relying on vendors to provide the technology, Charlotte Russe was able to reach $11 million in web sales in 2008.
The retail chain’s web site got a late start in 2007, recording $1.5 million in online sales. But CharlotteRusse.com hit its stride last year, growing 633% and topping the list of fastest-growing e-retailers in the 2009 Internet Retailer Top 500 Guide.
Like many other retail apparel chains, Charlotte Russe suffered through a dismal 2008, as comparable-store sales fell 1.5%. But the web sales surge dovetailed with a new marketing strategy and new leadership, as Emilia Fabricant was named president and chief merchandising officer in November 2008.
“The majority of our demographic is girls from age 16 to 22,” Fabricant says. “In the past, the company was very quiet in its marketing and branding efforts, but we’ve relaunched the brand in perfect harmony with the growth of e-commerce. And we relaunched with a very focused point of view in targeting the fashion-directed customer who knows what’s in fashion and what she wants to wear.”
Reaching the targeted shoppers was the first task CharlotteRusse.com faced when it embarked on its e-commerce mission. The company had a catalog site in place, which was the jumping-off point, says Craig Gillan, director of e-commerce. “A portion of our traffic was already coming in. Our early endeavors into marketing and acquiring new customers revolved around paid search and affiliate marketing,” he says, along with e-mail campaigns to reach its online audience.
Charlotte Russe turned to third-party providers both for reaching its audience and for e-commerce technology, a necessary step for making its move quickly, Gillan says. “Long term, I’m not sure if that’s the best way, but to quickly ge t into the e-commerce game you need to partner with other folks until you can build a team in-house,” he says.
The company uses GSI Commerce Inc.’s e-commerce platform, including fulfillment, customer service and search marketing, and for the web site’s front-end tools, such as site search and order management. Other third-party providers include e-Dialog Inc. for e-mail marketing, Commission Junction for affiliate marketing, Red Door Interactive Inc. for social networking and Forrester Research Inc. for market intelligence. Fry Inc. provides consulting help in such areas as e-commerce merchandising and web analytics.
“The vendor relationships helped push our web business faster,” Gillan says. “From launch to three months into e-commerce we felt our site was as good as-or better than-some of our competitors whose sites have been up for several years.”
Since rolling out the site CharlotteRusse.com, the company has added several features that shoppers have embraced, including Design Your Outfit and ShopTogether. The design feature, developed by Polyvore, enables shoppers to assemble clothing and accessories into outfits to see what works together.
ShopTogether, built by DecisionStep Inc., lets shoppers view products at the same time from different locations. Charlotte Russe’s strategy is to test site features and survey shoppers to gauge their reactions, and it’s finding that online shoppers want more interactive tools, Gillan says.
Charlotte Russe also likes to keep current with other e-commerce sites. At a meeting every Friday, each member of the e-commerce team shares an interesting web site discovered the preceding week.
Positive sales results and customer feedback point toward e-commerce playing an increasingly important role at Charlotte Russe, notes Fabricant. “Current management is 150% behind it,” she says. “We plan to make Charlotte Russe’s web site the main destination for young, hip shoppers.”
Web Only: GourmetGiftBaskets.com
Better experience, bigger bucks
By Mark Brohan
For a small company, GourmetGiftBaskets.com likes pulling off big projects that make it easier for customers to assemble an assortment of foods and flowers for a holiday or special occasion.
In 2008, GourmetGiftBaskets.com (No. 446) was the fastest-growing web-only merchant in Internet Retailer’s latest annual ranking of the 500 largest online retailers. GourmetGiftBaskets.com grew web sales last year by 172% to $12 million from $4.4 million in 2007. Despite the recession, GourmetGiftBaskets.com grew because the company developed web site features and functions that enhanced content, provided greater product detail and expedited checkout, says founder and president Ryan Abood.
Hiring a pro
GourmetGiftBaskets.com spent $100,000 to hire a professional photographer to shoot sharper images of each of the 450 gourmet food, flowers and related items it carries, and added an internally designed zoom feature.
While the basic design of home and product pages hasn’t changed much since the site launched in 2002, GourmetGiftBaskets.com, owned and operated by a second-generation family of florists, added customer reviews and revamped site search and page navigation. Better organized tabs on the home page give options to shop by categories such as most popular, occasions and sentiments, holidays, price, and gourmet food.
Shoppers can complete an order in as few as five steps. Besides making it easier to choose and buy an item, Abood says, “We added content on every food item we carry that states the serving or package size. That’s a detail customers told us they wanted.”
In a segment where many retailers offer similar product assortments and packaging, Abood tries to focus on initiatives that can help his site stand out.
Before the 2008 holiday shopping season, GourmetGiftBaskets.com internally developed and launched new tools and web pages that give shoppers more options to select third-party carriers and delivery dates. A calendar lets shoppers select a delivery date and the lowest shipping cost for that date, and a drop-down menu displays a fuller range of FedEx and UPS pricing and shipping options if the customer needs faster delivery.
“We have competitors that offer only a few standard shipping options and charge a big markup if a customer wants a gift basket sent for a priority delivery on Saturday,” says Abood. “We integrated our calendar pages directly with FedEx and UPS so the customer knows exactly what it would cost, from the most affordable shipping option to the most expensive.”