The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
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Wal-Mart fights back
Those challenges are hardly lost on the world's largest retail chain, Wal-Mart Stores Inc., as Joel Anderson, president and CEO of Walmart.com U.S., made clear in a featured address at IRCE that followed the presentation by Lynch from Barnes & Noble. Anderson commended Barnes & Noble for playing to its strengths, and said Wal-Mart is seeking to do the same. "There's too much me-tooism going on in this space. Be yourself," Anderson advised conference attendees. "We're going to win in the next generation of retail by being Wal-Mart. For Wal-Mart that means making it easy anytime, anywhere."
Anderson provided several examples of Wal-Mart's recent attempts to use its strength—its more than 10,000 stores in 27 countries—to better serve consumers however and wherever they want to shop. He pointed to its introduction this year of a "pay with cash" option at Walmart.com that lets a shopper place an order, then pay for it in a Wal-Mart store. He noted 40% of those paying that way are using a credit or debit card in the store, suggesting that many Walmart.com shoppers remain reluctant to entrust their card numbers to a web site. He added that 2% of Walmart.com purchasers choose this option and that 30% are new customers to Walmart.com.
Wal-Mart also is testing several ways to leverage shoppers' mobile devices to make store shopping more attractive. By activating an In-Store Mode feature in Wal-Mart's mobile app, a shopper can see where in the store she can find each item on her shopping list. Another test called Store Connect offers a number posted on store signs that shoppers can text to seek assistance, find products in their local store or post to social networks about their shopping trip. "It's all about social, mobile, online and the physical store environment coming together," Anderson said.
Other retail chains are thinking along the same lines, including Express Inc., whose store fashions change weekly as it seeks to keep its twenty-something customers coming back, said Jason LaRose, senior vice president of e-commerce, who spoke at the full-day Social Commerce Workshop at IRCE. Express, he said, has acquired 2.3 million Facebook fans without ever running a campaign encouraging consumers to become its fans. Its secret, LaRose said, has been to continually find ways to pique the interests of consumers interested in Express apparel.
One example is a promotion that invites Facebook users to vote on an item to be featured that week. Express makes the winning item available to buy at a discount on Facebook or on Express.com, and lets customers share the item with a friend or put it on her wish list. "We also use that information to think about how we may recommend products and provide search results on the site, how we might put outfits together," LaRose said. "Facebook commerce is just a piece of it."
Web-only retailers, too, are taking advantage of their understanding of their customers' interests to engage their fans on Facebook. In fact, Guillaume Gauthereau, founder and CEO of baby and toddler gear e-retailer Totsy.com, argued in a presentation at IRCE that engagement is crucial to make a social strategy pay off.
He described Totsy's weekly Mom of the Week campaign on Facebook that encourages consumers to post pictures of their kids; the e-retailer rewards one winner with a store credit. Meanwhile, 5% to 10% of Totsy's Facebook fans participate each week, he said. That is crucial because when a shopper engages with a retailer—posting, Liking a product or sharing a post with a friend—Facebook takes that as a sign of the consumer's interest in that retailer and is more likely to feature the merchant's future posts on the consumer's news feed, the first page she sees on Facebook.
Domino's Pizza, which counts 7 million fans on Facebook and does nearly $1 billion a year in online sales, gave away 100,000 pizzas late last year in a Facebook promotion as it introduced its artisan pizza line, Dennis Maloney, vice president of multimedia marketing, explained at the social workshop. Many consumers also ordered another pizza along with the free one, and, because the promotion was placed through Facebook, their orders became visible to their Facebook friends. "That gets other people to Like our brand," Maloney said.
Pinterest's mighty pins
While Facebook is the biggest online social network, Pinterest is growing quickly, and is having a big impact on Gemvara.com, a web-only retailer of customizable jewelry. Pinterest accounts for anywhere from 3.5% to 10% of daily traffic to Gemvara.com, and the average order value of that traffic is 20% higher than average, Brian Kalma, chief experience officer, explained at another IRCE session.
Kalma described a ring that few shoppers were viewing at Gemvara.com, but that attracted attention on Pinterest. That led the e-retailer to move the item to the central position on Gemvara.com's home page, along with text that read: "You designed it/You pinned it/Everyone loved it."
The e-retailer now has a box on the home page called Trending on Pinterest that lets visitors see favorite products on the social network, and creates boards on Pinterest with design suggestions for customers who call seeking advice. "These guys are converting like crazy," Kalma said.
A human touch
A much larger web-only retailer, Buy.com Inc., No 36 in the Internet Retailer Top 500, is going for that same kind of personal touch in its nearly complete web site redesign. "Buy from people, not the Internet," is the company's new slogan, explained chief marketing officer Bernard Luthi in a presentation at IRCE. He said the e-retailer is taking direction from its parent company, Japan-based Rakuten, which aims to make buying from the several web marketplaces it operates around the world less like purchasing from a vending machine and more like an interaction between shopper and retailer.