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.
The 20-person office will first focus on enhancing the merchant’s mobile apps.
Sports team apparel and merchandise e-retailer Fanatics Inc. is fanatical about mobile commerce. Earlier this year, it stole Groupon’s m-commerce chief, David Katz, out from under the daily-deals merchant. Now Katz, senior vice president and general manager of mobile at Fanatics, is days away from signing a lease on a San Francisco office that will house a 20-person team devoted to mobile commerce, he tells Internet Retailer.
Fanatics, No. 18 in the recently published 2014 Internet Retailer Mobile 500, is headquartered in Jacksonville, FL, a city not known for its overflowing mobile developer population. That’s why Fanatics is turning to Silicon Valley and San Francisco, ground zero for young mobile developers anxious to put their skills to work.
Fanatics already has one smaller mobile team located in Boulder, CO. This team has been responsible for building the company’s m-commerce web sites—not just the smartphone site at Fanatics.com but also smartphone-optimized m-commerce sites selling merchandise for various leagues and teams throughout the sports world. The teams and leagues own the e-commerce and m-commerce sites Fanatics builds, but Fanatics is responsible for everything from design to fulfillment, and takes a cut of sales, different for each partner. Mobile site development will continue in Boulder.
“Everybody in e-commerce is seeing the same trend we are—at some point, mobile commerce will be the majority of everyone’s business,” Katz says.
To that end, Fanatics has just unveiled smartphone apps for iPhone and Android. The e-retailer built the apps with in-house staff as well as some help from app developer Xtreme Labs, now part of Pivotal Labs. Fanatics is working on an iPad app now that it soon will fold into the iPhone app to create a single universal app that will work on any Apple iOS device. And it’s working on an Android tablet app that it expects to launch during the first half of 2014. All of these apps represent a big part of Katz’s vision for the future of Fanatics and will be the focus of the 20-person San Francisco team.
Fanatics will rake in a whopping $180 million in mobile sales this year, double the $90 million it hit in 2012, according to estimates in the Internet Retailer Mobile 500. Mobile traffic year to date at Fanatics has doubled over the same period in 2012, the company reports.
“We’re seeing the same big shift to mobile traffic everyone is seeing,” Katz says. “Plus, our core business is just growing fast. Today, being a fast-growing company that is also seeing a big shift by customers to mobile makes it imperative we get apps on the market.”
Katz says the opportunity with mobile apps is to get shoppers more engaged with the retailer and with the myriad sports teams shoppers love. The apps will help Fanatics deepen its relationships with customers, increase the merchant’s “share of wallet,” and harness the passion customers feel for sports in general into a commercial opportunity, he says.
“Nielsen reported earlier this year a statistic I just love: 60% of smartphone and tablet owners are accessing sports content via mobile at least once a day,” Katz says. “We know how important mobile is to sports fans, and we want to be there with great apps.”
Fanatics is introducing in the new apps a new feature for the company: personalization, in the guise of Favorite Teams. Anyone visiting Fanatics is not there to browse through a random assortment of teams’ apparel and accessories, they are fanatics who come to shop the teams they follow and love. So the app allows a shopper to identify their favorite teams and players from various sports to easily access content and products that meet their interests.
“We are trying to take blocks out of the flow for our app users,” Katz says. “Understanding the teams and players app users’ love is critical to providing a great experience.”
Katz says future versions of the apps will make greater use of geolocation and real-time data.
Fanatics will promote the apps through e-mail marketing, the e-commerce site, and search engine marketing and search engine optimization, Katz says. After awhile, the company will explore paid opportunities for app downloads. Such opportunities include Facebook app install ads, mobile ads that link consumers on mobile devices to the page in the appropriate app store where they can download the advertiser’s app.
“We’d like the apps eventually to be the ambassador that helps bring new customers into the fold,” Katz explains. “In my past lives, the app stores proved to be great merchandising platforms. You get access to a whole new set of consumers through the app stores. It’s a wonderful environment to get consumers to discover your brand. That’s definitely a big part of the value of doing apps.”
Fanatics is No. 43 in the 2013 Internet Retailer Top 500 Guide, generating $764 million in web sales in 2012, a 45.5% increase over 2011’s $525 million.