T-Mobile is one of first advertisers to run a 1-minute video ad.
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Maintaining a fast online pace
Nike Inc. extended its streak of online sales growth in 2010 to 13 consecutive quarters.
"Revenue from direct-to-consumer, our Nike-owned stores and online business increased 12%, and that's a record," Mark Parker, Nike's president and CEO, told Wall Street analysts on the company's year-end earnings call. "We did it online which is up 25% for the year. And that includes NikeiD, our custom-design site, which surpassed $100 million for the first time."
Internet Retailer estimates Nike, No. 78 in the Top 500 Guide, had 2010 web sales of $260 million, up by 25% from $208 million in 2009.
Although total sales declined slightly—0.8%—to $19.014 billion from $19.176 billion in fiscal 2009, net income increased 28.4% to $1.90 billion from $1.48 billion.
Nike uses its five web sites to inform consumers as well as sell products. "Digital commerce isn't just about selling things, it's about defining our brand for our consumers and giving them access to the products they love," Jeanne Jackson, president of direct to consumer, told analysts. "We use Nike.com to tell product stories online, to provide training help and services so the consumer can be the best athlete they can be."
In 2010, Nike also developed in-house a product finder feature that checks inventory across its e-commerce sites, including NikeBasketball.com and NikeSoccer.com. "That provides the consumer not only the ability to find the products they want in the size they need but allows us to be a more productive retailer in the way we use the inventory that we own," Jackson said.
The best is yet to come
Web sales in 2010 grew about 50% to an Internet Retailer-estimated $75.8 million for Fossil Inc., a manufacturer of watches, accessories and apparel. And Fossil (No. 196) is just getting started online, says vice president of digital marketing and operations Philip Thompson.
In 2010 Fossil spent considerable time and resources improving its e-commerce infrastructure with the goal of becoming an even bigger global online and multichannel retailer this year, says Thompson. Fossil, which operates about 120 stores, updated its gift registry on Fossil.com last year with new social media features that let shoppers save and share products and wish lists with family and friends. Fossil also launched a mobile commerce site on a platform from Usablenet and introduced a new customer relationship management system that allows the company to conduct more frequent and targeted e-mail and paid search campaigns.
In 2011, Fossil plans to redesign its web site with bigger graphics, easier navigation and other improvements. "Last year was spent building up our web foundation," says Thompson. "This year we are all about focusing on aligning and building the brand."
Fossil has been selling online in the U.S. since 1996 and overseas since 2007, and today has e-commerce sites for Australia, Austria, Canada, France, Germany, Italy, Netherlands, Singapore, South Africa, Spain, Switzerland and the United Kingdom. In 2011, an updated e-commerce infrastructure that allows Fossil programmers and web developers to more quickly update content and features for its international sites will help Fossil launch new e-commerce sites in Japan, South Korea and elsewhere. "We have better aligned our brand across the web, catalogs and stores," says Thompson. "What makes it all possible is making it all digitally driven."
Plugging in higher web sales
Allied Electronics Inc.
Allied Electronics Inc. is an older catalog company that's taking an updated approach to e-commerce.
In the past two years, Allied Electronics, a direct marketer of electrical components to businesses and consumers since 1928, has completely made over its online marketing program. It increased the size of its paid search keyword inventory from 150,000 words and phrases to more than 1 million, created paid search campaigns built around specific brand names and more effectively segmented its e-mail marketing list.
As a result of better marketing, especially paid search and e-mail, e-commerce sales for Allied, No. 131 in the Internet Retailer Top 500 Guide, grew 90.1% to $135 million in 2010 from $71 million in 2009. A decade ago the web accounted for only about 4% of sales, but today e-commerce represents about 40% of revenue, says Allied director of e-commerce Dan Stewart. "Everything we are doing to build up our e-commerce business begins with doing a better job with marketing," says Stewart.
In order to be able to bid on more paid search terms and achieve higher returns, Allied in 2010 replaced an older internal bid management system with a program from Kenshoo, a developer of digital marketing software. Allied Electronics, which maintains an online inventory of more than 2 million SKUs, also updated its e-mail marketing program with technology from Responsys Inc.
With more sophisticated marketing technology, the conversion rates on some of Allied's e-mail and paid search campaigns have more than tripled, although Stewart declined to discuss specific results. "We go back a long way in the direct marketing business," Stewart says, "but our mindset today is about how we can become a better e-commerce company."
Channels working together
ShopNBC markets to consumers largely through its TV shopping channel, aiming to drive consumers to purchase by calling a toll-free number, visiting its e-commerce site or via their smartphones. That variety of selling channels puts a premium on testing how a change in one channel will affect another.
For example, ShopNBC's marketing team suspected they would sell more by including the price of a mattress set featured on the TV shopping network's "Daily Top Value," but they weren't sure. So they tested the impact of showing the price versus using compelling images to encourage consumers to visit the web site. The result? "Not including the price worked better," says Carol Steinberg, senior vice president, e-commerce, marketing and business development.
That kind of continual data analysis is standard procedure at ShopNBC (No. 84), which is owned and operated by ValueVision Media Inc. "We work together as a company," Steinberg says. "The channels are not working against each other."