The retailer’s latest designer line sold out soon after the products went live, and few if any of the 250 items are in stock ...
With conversion rates steady, web-only retailers rely on growing traffic to boost sales.
With conversion rates generally steady over the past decade, web-only retailers have relied on growing traffic to boost online sales
Nasty Gal Inc. knows how to make nice with its customer base. The web-only retailer of trendy apparel for young women is all about engaging its shoppers on its web site and through a full complement of social media tools. Providing forums for its consumers to interact with Nasty Gal and each other on such social platforms as Facebook helped the retailer achieve the highest average monthly traffic growth rate among online-only retailers ranked in Internet Retailer's 2013 Top 500 Guide.
Nasty Gal's traffic grew by 1000% in 2012, leading all 196 web-only retailers ranked in the Top 500 Guide. That traffic leap helped Nasty Gal reach 2012 web sales of $128 million, by Internet Retailer's estimate, an increase of 357.1% from $28 million in 2011 and good for a surge from No. 372 in the 2012 guide to No. 170 in 2013.
Nasty Gal's roots extend back to founder Sophia Amoruso's use of the MySpace social network in 2006 as a forum to exchange fashion ideas with young women. Since then, Nasty Gal has embraced Facebook, Twitter, Pinterest and Instagram as channels to foster the exchange of fashion ideas, says Deborah Benton, president and chief operating officer.
"It started with Sophia—she is engaging and transparent, and this generation appreciates that and they feel a part of Nasty Gal," Benton says.
Web-only retailers that grew site traffic significantly in 2012 did so by traditional means, such as paid and natural search, but also by tapping new channels including social media. Some of those leaders in traffic growth are exploring new marketing channels as well, including radio and television advertising to drive demand and grow web sales.
Wine Enthusiast Cos. was among the top 10 web-only retailers in traffic growth. The company's web sites WineEnthusiast.com and WineExpress.com, offer glasses, coolers and other accessories, and wines from around the world, respectively. In 2012, the retailer's average monthly traffic grew by 324.6% to 500,000 from 117,757 in 2011 and helped vault the merchant to No. 434 in the 2013 Top 500 Guide, from No. 744 in the 2012 Second 500 Guide.
WineEnthusiast's traffic increase came from a variety of web marketing and site improvement projects. Besides paid search marketing, they included improving product descriptions to boost natural search results, making wine consultants accessible by phone and online, and direct mail including catalogs and post cards, says Glenn Edelman, vice president, e-commerce. The company began in 1979 as a cataloger but now is primarily an online retailer. The retailer's catalogs are designed to drive demand and push traffic to the web. The majority of the merchant's sales now come through its web sites, peaking in the holiday season at about 80%, Edelman says.
"Traffic comes from organic growth," he says. "To me it's about the migration of our customers: at one time they got a catalog in the mail and then got on the phone to place an order. Now they get a catalog and go online to order."
As the company reduced its catalog volume and frequency it shifted information previously contained in catalogs online. The printed media is dominated by images and recipients are directed to the web site on nearly every page, Edelman says.
Organic search is still big for WineEnthusiast and paid search still plays a role, but the changing nature of Google's search results hasn't made it easy, Edelman says. That includes the new Google Shopping feature that lets retailers bid for images of their products to appear in the center of a Google search results page.
The marketing tactics used by web-only retailers like WineEnthusiast and Nasty Gal to grow web traffic are among the many used by other successful e-retailers. And growing traffic has been crucial to increasing sales for web-only retailers over the past decade because conversion rates have changed little over that time.
Traffic is another story, however, as it's grown dramatically over the past decade. Average monthly visitors for the online-only retailers in the latest Top 500 Guide totaled 9,074,867; that's an increase of 212.5% from 2,904,267 in 2003.
Other types of companies that sell to consumers online also increased their web site traffic significantly over the past decade, particularly consumer brand manufacturers whose sites consumers often visit for product information before they buy from another source. The 2012 average monthly traffic for brand manufacturers grew by 274.5%, to 10,051,516 in 2012 from 2,684,171 in 2003.
Retail chains followed brand manufacturers and web-only retailers in 2012, with an average increase of 181.8% to 7,459,789 visitors from 2,647,265 in 2003. Catalogers grew average monthly traffic to 3,846,146 in 2012, up 101.1% from 1,912,503 in 2003.
But conversion rates have not increased substantially over the 10 years since Internet Retailer published its first rankings.
Among all retailers ranked in the Top 500 Guide, catalog and call center retailers had the highest average conversion rate in 2012 at 5.1%, while the average conversion rate for web-only retailers was 3.4%; retail chains, 2.7%; and consumer brand manufacturers, 2.2%. Those numbers are consistent with 10-year averages. Over the past decade, cataloger/call center retailers showed the highest average conversion rate at 4.8%, followed by web-only merchants at 3.3% and retail chains, which converted at 2.8%. Brand manufacturers' conversion rate was 2.4%.
WineEnthusiast's conversion rate averages 2.5%, though it spikes during the holiday season at up to 7%, Edelman says. For Nasty Gal, only 2.3% of site visits end in a purchase.
That means growth has to come from bringing more consumers to NastyGal.com. The e-retailer has largely relied on social media to do that, Benton says. "Pinterest has been a great source of growth along with Facebook," she says. "Instagram is the fastest-growing because it lends itself to imagery." Instagram is an online photo-sharing and social networking site. Nasty Gal also has created a Join the Click section on its web site, where customers can post photos of themselves in Nasty Gal apparel.