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Price and service
E-retailer Wine.com aims to address that consumer demand in 2011 by further developing its Steward-Ship program, a shipping program that offers unlimited shipping for a year for $49.
CEO Rich Bergsund says Wine.com doesn't seek to offer the lowest web price for every bottle it sells, but to offer a solid value proposition. "It all starts with what you are selling and at what price," he says. "You have to nail the price so people see a good value in it."
Bergsund says his business struck the right balance between price and service during the 2010 holiday season, and increased sales 20% over the prior year as a result. Wine.com's 2009 web sales totaled $49.5 million, according to an Internet Retailer estimate. The e-retailer hired 250 additional staffers for its warehouse and call center in December so Wine.com could meet the additional demands on customer service and fulfillment.
Eric Best, CEO of Mercent Corp., an e-commerce marketing technology and services firm, says his e-retailer clients are making more frequent adjustments on price, even it is just a few pennies, and that those adjustments can have a seemingly oversized impact on sales. "There is no doubt that the trend in retail is toward pricing transparency for the consumer," Best says. "Year over year, consumers have more convenient access to more timely and complete market data."
One way retailers can appeal to price-sensitive shoppers is through limited-time, flash-sale sites, a trend started by such web retailers as Gilt Groupe, Rue La La and HauteLook that has led many retailers to offer short-term deals on their own sites. Wine.com aims to attract new, more price-driven consumers through the site's flash-sale arm WineShopper.com. It offers wine at heavily discounted prices but offers are only good for 72 hours.
At the same time, Wine.com is also gearing up to better serve the mostly affluent consumers shopping with tablet computers like Apple Inc.'s iPad. The e-retailer is preparing a new version of its iPad app geared to wine aficionados that will provide consumers with information not available on Wine.com.
Social and mobile
Social networks are now an important part of e-commerce, and e-retailer eForCity Corp.'s EverydaySource.com is focused this year on building on the social media strategy that began to bear fruit during the 2010 holiday season and on two basics of e-commerce, site performance and analytics. "We have been investing in technology and putting more into research and development than ever before," says Jack Sheng, CEO of the electronics accessories retailer.
Before the holidays, EverydaySource.com began using the services of CDNetworks, a content delivery network, to speed page load time. "We are a small business. Compared to Amazon, we are a fraction, but on the content side, we can load just as fast," he says, citing CDNetworks' performance tests. What's more, Sheng says site performance is an important consideration when evaluating any new feature proposed for the e-commerce site.
Sheng believes the site's improved performance paid off in increased sales. He says traffic was up 25% during the recent holiday season, and sales broke records, though he would not disclose details.
Some of that additional traffic came from the social network Facebook. Contests and giveaways helped EverydaySource increase its Facebook fan base nearly 50% month over month in the lead-up to the holidays. Social media figures to be a higher priority for many e-retailers during the 2011 holiday season. Between 1% and 2% of e-retailer site traffic in November and December came from social media, according to MarketLive.
The other major trend getting e-retailer attention is mobile commerce. The Nielsen Co. predicts that half of all mobile phones in use in the United States by the end of 2011 will be smartphones, which means tens of millions of holiday shoppers will be carrying the web-enabled, computer-like mobile phones.
Mobile e-commerce paid higher than expected dividends during the 2010 holiday season for JTV.com, the e-retail arm of home shopping channel Jewelry Television. "We were shocked by the number of people and dollars that flowed through those platforms," says Tim Engle, JTV's senior vice president of strategy. "Our total mobile sales as a percentage of online sales were nearly 5%." From December to early March, JTV's iPhone app was downloaded nearly 30,000 times, he adds.
With mobile, Engle says JTV is tapping into new customers that it's never reached with its TV and online channels, although the site's mobile users still skew female and 45 and older. JTV will soon feature mobile-only offers, similar to the online-only offers it makes on its web site.
"We view mobile as its own stand-alone channel that we have to create and tailor to our mobile customers," he says. The company plans to give consumers a choice about how they want to interact with JTV on a mobile device, he adds. A window will soon pop up on a mobile or tablet browser that asks consumers to choose if they want to view the mobile-optimized version of the site, the regular web site or a version of the site designed for tablet computers like the iPad. Engle says he expects mobile sales to at least double in 2011.
Speaking of all of JTV's web channels, Engle says JTV is completing the marketing tweaks it needs to hit its stride for the rest of 2011 and the next holiday season. "We have very active customers that are very engaged in our proposition," Engle says. "We're ready to deliver."