Retailers shift their ad spending from TV, radio and print ads to digital ads.
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GourmetGiftBaskets.com employs a full-time staff of 40 experienced fulfillment specialists to read each order, select the items, then custom wrap each item and basket based on the company’s own quality control standards.
“Each basket goes through at least two inspections, by the fulfillment specialist and a manager, before it’s approved for shipping,” Abood says. “We don’t want to be the biggest online gift basket company, just the one that gives our customers the best shopping experience.”
In the past year, the media has helped raise the company’s profile. Assortments from GourmetGiftBaskets.com have been featured on the Oprah Winfrey and Dr. Phil TV shows and mentioned in such food and dining magazines as Gourmet and Bon Appétit.
Repeat customers have grown by one-third in the past two years and now account for more than 50% of sales. The company’s personal approach is the main reason, Abood says.
“Our gift baskets are made by hand by us and we give our customers excellent service,” he says. “We’re not that big. If a customer is unhappy, they can call and get the owner anytime and not an uninterested party in a call center.”
Cataloger: Green Mountain Coffee
Habit-forming e-commerce sites
By Mark Brohan
Even in a deep recession, Green Mountain Coffee Roasters Inc. learned, that web shoppers will still buy their favorite gourmet blend and new brewing systems-if they get a good deal.
With that in mind, Green Mountain last year added multiple discounts and perks to Café Express, an online customer loyalty program for shoppers at GreenMountainCoffee.com, and to Coffee Club, a similar program for shoppers at Keurig.com, which sells high-end coffee brewers and related merchandise.
Keurig also used alternative tactics to find new customers such as giving serious coffee bloggers free 30-day at-home trials of new coffee brewers or including more online coupons in its packaging materials and user manuals.
The effort paid off. For the second consecutive year, Green Mountain (No. 120) was the fastest-growing catalog company on the 2009 Internet Retailer Top 500 list, as it increased its web sales by 86.1% to $111.3 million in 2008 from $59.8 million in 2007.
“We saw early on that 2008 was going to be a tough year for the economy and decided that the best strategy was developing programs that deliver better value and more perks to our most loyal customers,” says David Manly, Keurig’s vice president of away-from-home and consumer direct marketing. “We also found other ways to find new shoppers and begin turning them into repeat customers.”
A new approach
Before revamping its loyalty club program, Green Mountain sifted through more than 1,000 customer reviews at GreenMountainCoffee.com, added customer satisfaction surveys on its e-commerce sites and asked 300,000 people on its e-mail marketing list for ideas on ways to improve the online shopping experience.
Loyal customers wanted better deals and more privileges, says Ken Crites, director of consumer direct for Green Mountain’s specialty coffee business unit. “Our best online customers told us they would keep buying our coffee, tea, cups and brewers if we could find new ways to deliver more value.”
To revamp Café Express, Green Mountain gave new members the option of two bags of coffee, two boxes of cups or having a $10 donation made in their name to the Wildlife Fund, plus 50% off the regular price on each recurring order and free filters. Existing members were offered such perks as $2 discounts on cups, $1 off on a bag of coffee and a 10% discount on non-coffee items. Green Mountain also established a new platinum program that gives Café Express members deeper discounts and better customer service.
Green Mountain Coffee shoppers responded: the number of new members signing up for Café Express doubled to about 135,000 last year. “We didn’t want to be just another churn-and-burn loyalty program,” Crites says. “We achieved record web sales last year because we made the effort to reach out to our best customers.”
Green Mountain’s typical online customer is female, age 30-50, with annual household income of $100,000 and above. Green Mountain is trying new ways to market online to serious coffee drinkers with similar demographics. For instance, Keurig monitors online coffee blogs and offers bloggers loyalty club memberships, gourmet coffee samples and trials of Keurig brewing systems.
Keurig has added nearly 1 million names to its loyalty club program in the past year, bringing the membership to 1.14 million, and the number of repeat buyers on Keurig.com has increased from 15% to 30%.
“We took the opportunity to rethink our entire approach to customer loyalty and now the web is the fastest-growing part of our business,” says Manly. “We learned that our best customers will stay with us even in bad times if we offer them better value and newer and better ways to keep shopping with us online.”
Manufacturer: American Apparel
Buttoning down global e-commerce
By Bill Briggs
Web merchants wishing to sell abroad don’t necessarily need to have stores on the ground to begin with. But for American Apparel Inc., it laid the foundation for success.
A global expansion initiative began in earnest in 2006 and accelerated through 2008 for the consumer brand manufacturer, which specializes in clothing and accessories for trendy young women and men in their teens and 20s. American Apparel now runs stores and e-commerce sites targeting shoppers in Australia, Canada, Europe, Japan, South Korea, Switzerland and the United Kingdom.
With the exception of Australia, where web shoppers bought products through the U.S. web site, all the other web stores serving those countries began after physical stores were established in those markets, says web director Raz Schionning. The strategy has paid off, as shown by 2008 sales results: International e-commerce sales increased 82.9% to $13.9 million in 2008 from $7.6 million in 2007 while U.S. online sales grew year over year 43.3% to $25.5 million from $17.8 million.