Groupon says its focus is on the bottom line, rather than top-line growth.
(Page 2 of 2)
E-commerce technology providers are also offering new tools for localized online marketing, including software that helps merchants without experience marketing on the web. For instance, about a quarter of the 1,300 gyms that operate under the Snap Fitness banner use software from Balihoo Inc. to manage online marketing, says Brant Schmitz, the chain's online marketing manager.
The service costs each location about $200 per month—franchise owners decide how much of their marketing budgets to allocate to the program—and the technology enables them to set up pay-per-click search campaigns with minimal fuss. Schmitz says the national chain provides some guidance, for instance, highlighting about 700 keywords that gym owners can profitably bid on. Local managers, however, can come up with other search terms that reflect their areas, such as "3rd street gym" or "gym and uptown."
For chains, says Balihoo chief marketing officer Shane Vaughan, the ideal mix of content on web sites is 60% national and 40% local. Some of that local content can come from blogs on the e-commerce site or via social networks; in the case of a gym, that might include putting a call out for a local run on a sunny day, he says. In fact, the local Snap Fitness managers set their social media strategies. But, Schmitz says, that's less important than Google, which accounts for 85% of the chain's overall site traffic.
Local and small retailers seeking to reach more online consumers and strengthen their brands also can take advantage of new online marketing services. At the end of 2012 the mass merchant e-retailer and marketplace Rakuten Buy.com launched BuyTV Services. Based in Aliso Viejo, CA, BuyTV Services operates a recording studio where video professionals produce promotional messages. BuyTV Services employees also can travel throughout North America to record on location, says Sheree Martin, BuyTV's executive producer. "BuyTV Services is available to any businesses that are looking to improve their online presence, as well as existing Rakuten Buy.com merchants," Martin says. A spokeswoman for the company says some 5,500 merchants sell on the e-commerce site, which recently changed its name to Rakuten Shopping.
She says BuyTV works with clients to determine pricing, with costs depending on such variables as length, location and general complexity. "On average, a 30-second to 1-minute video can cost approximately $1,500 and a 3- to 5-minute video shoot can cost approximately $5,500," she says. Merchants that make videos through BuyTV can link to those presentations via the production arm's platform on video-sharing site Vimeo, embed videos on their own web sites, or receive videos on CDs or USB drives.
Web-only retailer ZoeOrganics.com, a high-end beauty and health products founded in 2010, is among the initial merchants to post on its site a video produced by BuyTV. In the video, Heather Hamilton, the retailer's founder and CEO, explains why the company was founded and its mission, complementing the written "Our Story" feature on the site. "We wanted to give people a peek of what we are and what we do," Hamilton says. ZoeOrganics.com mainly relies on word of mouth and product reviews in magazines, not paid search, to attract customers. Hamilton hopes the video will catch the eye of more shoppers and press reviewers—and help to produce enough business to one day justify a local store in California.
Another example of a national e-commerce player helping to match local retailers with potential customers—in this case, online shoppers looking for groceries—is Grocery Server. For about a year and a half, its technology has enabled grocers that range in size from local mom-and-pops to national chains to embed offers within online recipes available on MyRecipes.com, Recipe.com, DashRecipes.com and elsewhere.
Grocery Server CEO Corbin de Rubertis says the offers reach about 1 million consumers per day. Retailers pay $1 to advertise one item per day. A further cost-per-click model applies to grocers that sell products online, with costs ranging from about 25 cents to 50 cents per item. Grocery Server aims to sign up more local farmers' markets in 2013, de Rubertis says. That would give, for instance, the maker of organic honey or spinach produced on a farm just outside a specific city a broader potential audience for its goods, he says.
Local still matters to consumers, and the web is helping to make neighborhood merchants more neighborly.
Selling a local connection on the web
In late 2012, a consumer in Australia ordered a campfire poker from a local merchant that sells via ShopMyNorth.com. The Michigan-based e-commerce operation, located along the shores of Lake Michigan, southwest of where it seems to kiss Lake Huron at the Straits of Mackinac, uses emotive photography and other branding tactics to appeal to the tourists who flock to an area that boasts natural beauty, art shows, recreation and quaint towns.
The purchase stands as an example of how local merchants, some of whom don't have their own e-commerce sites, can band together to sell their wares to consumers who are from out-of-town but who feel a connection to a specific region.
The 15 or so small local retailers that sell their wares via ShopMyNorth.com were enjoying a strong end to 2012, bringing in at least 134% more revenue in November than in November 2011.
The e-commerce site, operated by MyNorth Media—which publishes local tourism guides and operates a web site—generally charges retailer clients 25% of a product's sale price. In exchange, MyNorth handles order processing and payment and promotes retailers' products on the web site, which is built with technology from eBay Inc.-owned Magento, says Deborah Fellows, MyNorth president.
MyNorth also helps to market those retailers via Facebook, Twitter and Pinterest; an e-mail newsletter with about 50,000 subscribers; and a small paid search drive via Google Inc.'s AdWords program. Spending on paid search likely doesn't exceed $7 per day, or just more than $2,500 per year, she says, which means the site must focus on terms specific to Northern Michigan. Such terms include "michigan store" and "northern michigan shopping," Fellow says.
"We're never going to win on consumers searching for fleece jackets," Fellows says.
ShopMyNorth.com's online marketing effort is aimed at a very specific kind of consumer. "You can buy a candle anywhere, you can buy a cutting board anywhere," Fellows says. "Our shoppers are buying those products because they feel like they are buying a piece of Northern Michigan."