IRCE | Digital Commerce 360

IRCE: Why StockX is unlike any other sneaker marketplace

April Berthene — Mon, 01 Jul 2019 15:10:07 +0000

StockX wants in on the primary and secondary market for limited edition goods, such as sneakers, watches, handbags and streetwear.

The Detroit-based marketplace launched in 2016 billing itself as “the stock market of things” where consumers can both buy and sell new and pre-owned products similar to how commodities are traded on the stock market. Now three years later, StockX just secured a $110 million Series C funding round, which values the marketplace at over $1 billion.

CEO Josh Luber

Co-founder and CEO Josh Luber detailed why StockX’s approach to selling these products is unique and fair to both consumers and brands at the Internet Retailer Conference and Exhibition at RetailX in June.

The premise for StockX, Luber said, works off economic basics of supply and demand: If there is a limited product and high demand, the price increases. In the sneaker world, this often leads to a competitive secondary market, where a limited-edition sneaker with only 500 products available, may have retailed for $200 originally but is now worth more than $10,000 on the secondary market.

On StockX.com, consumers can see the value of the goods fluctuate as they change hands. On one product detail page, a consumer can see how many of a certain product is available by size, how the price fluctuates by size, how the price has fluctuated over time, what price a shopper could buy the product for and what price a shopper could sell the product for.

Plus, because this is online, most consumers have equal access to the goods, which eliminates the need for a consumer to camp outside a store waiting for a sneaker release.

StockX also has “IPOs,” in which a product is released for the first time on StockX. For example, StockX and jeweler Ben Baller created 800 slide shoes that had a jewelry chain with rap lyrics on it earlier this year. These slides would likely retail for $70; however, because they were initially released on StockX, shoppers bid on how much they would pay for their size and color of the shoe. During this initial period, consumers could not see each other’s bids. Every size and color had 10 products, so consumers with the top 10 bids for each SKU got to purchase the product. However, the winning 10 customers only paid the price of the 10^th highest bid or the “clearing price.” For example, if the top-bidding consumer bid $800 for the product, but the 10th highest bid was $200, all consumers No. 1-10 only paid the $200 clearing price. This ensures that the consumers who were willing to pay the most money for the product received it. Plus, the customers are happy since even though they paid more than the retail place, most paid less than what they were willing to pay, Luber said.

For this release, the average clearing price was $210, and 97% of the customers paid less for the product than what they bid, he said.

This is also fair for brands, Luber says, as they are then able to get more money if their product is in high demand. “For the brand you $210 instead of $70,” Luber said.

Then, after the auction is over, the secondary market resell immediately begins on StockX. The shoes resell price started at $350, he said. Hypothetically, some shoppers could have won the initial auction and immediately resold the shoes, and earned $140 without ever being in possession of the physical shoes, much like trading commodities is on the stock market. Luber also likens this to ticket seller Stubhub.com, which is both the primary market for some official events, and the secondary market.

For pre-owned goods, sellers ship their items directly to StockX for the marketplace to inspect and authenticate the goods.

StockX is No. 31 in in the ranking of Internet Retailer Online Marketplaces.

Sneaker marketplaces are a hot area in U.S. retail. In addition to StockX, Internet Retailer ranks four other marketplaces that sell new and pre-owned sneakers including GOAT, Flight Club, Stadium Goods and Kixify. Collectively, the five grew 30.9% to $1.15 billion in gross merchandise value in 2018, according to Internet Retailer. That’s faster than the 22% growth of the entire Top 100 marketplaces and the 14% growth of the overall U.S. ecommerce industry in 2018.

Excluding StockX’s most recent funding round, these five marketplaces have raised $164.7 million in investment funding, according to Internet Retailer.

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IRCE: Desert Steel’s revenue spikes 225% after website redesign

Stephanie Crets — Wed, 26 Jun 2019 18:24:49 +0000

Desert Steel, an e-retailer of garden art and sculptures, sought web design guidance at last year’s Open Mic Feedback Forum workshop at the Internet Retailer Conference & Exhibition in Chicago. The interactive workshop provided a 101 course-level guide to the key elements of ecommerce site design.

And this year, Jason McClintock, president of DesertSteel.net, was back to share his vastly improved website at the session titled, “Usability: Keeping Shoppers on the Road to Checkout, Step by Step.”

Desert Steel revamped every part of its website, from the homepage to the about page to the navigation, thanks to the help provided at the workshop, McClintock says. In its original state, the homepage featured uncommon cactus names (such as a “Saguaro” torch), birdfeeders above the fold and minimal navigation.

“When you go to this website, what do you think this retailer sells?” Scott Kincaid, chief success officer at research firm Usability Sciences, asked the audience at the Usability workshop yesterday. He also was part of the 2018 workshop.

“Birdfeeders,” one person in the crowd answered.

While Desert Steel does sell birdfeeders, that’s just one category of its vast product offerings, which include torches, fire pits, lighting and sculptures of cacti and succulents. Now, its homepage more prominently features the cacti sculptures, along with a more robust navigation.

Thanks to these changes and more, Desert Steel had a 225% increase in revenue in 2019 compared with 2018—from $105,000 to $350,000, McClintock says.

In addition, Desert Steel had a 260% increase in orders and its conversion rate climbed from 0.15% to 0.25%. And its traffic spiked 350%, from 150,000 sessions to 685,000 sessions year over year.

“In my experience, some of the best insights come from peers helping peers, in conversations that happen at the lunch table, after the sessions and at happy hour,” Kincaid said at the workshop last year. “This workshop fosters this type of environment.”

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Gaining an edge

Internet Retailer — Tue, 04 Jun 2019 16:29:56 +0000

There are two constants in retail: consumers are shifting more of their spending online—even if they increasingly move across multiple channels before they make a purchase—and vendors are rolling out new technology and tools to help merchants better serve shoppers however they choose to buy. Technology is changing at break-neck speed, and competition among retailers to grab and hold their share of sales is moving at a similar pace.

For example, artificial intelligence—technology that enables computerized systems to learn and improve processes without human intervention—is helping retailers entice shoppers to make online and offline purchases by predicting what individual shoppers want. AI can help merchants gather data from their own databases on shoppers’ buying habits, as well as data from other retailers, product manufacturers and software vendors.

Nothing artificial

There’s nothing artificial about AI’s uses, such as predicting what individual shoppers might want to buy and updating product offerings in real time with that shopper’s data and data based on similar shoppers’ buying habits across the internet. Such tools can open new shopper engagement channels and enhance the customer shopping experience, which equates with increased revenue. A number of retailers are getting out their wallets and investing in new technologies.

Retailers globally are projected to spend $12 billion on AI services alone by 2023, according to a study by Juniper Research. That’s up by a gaudy 233% from an estimated $3.6 billion in 2018. And more than 325,000 retailers globally will adopt AI technology in the next five years,
the digital consultancy predicts.

The broad applications and growth of AI is just one technology category that will drive a range of educational sessions at this year’s Internet Retailer Conference & Exhibition at RetailX in Chicago. For instance, Ken Natori, president of women’s fashion and home furnishings merchant Natori, and John Wood, founder and CEO of US Wellness Meats, will explain how AI has helped them streamline their marketing operations with minimal human involvement.

AI is just one of a number of fast-emerging technologies that retailers are embracing, which explains why global retail technology spending is expected to grow 3.6% to nearly $203.6 billion this year, according to a recent Gartner Inc. forecast. Software is the top technology spending category as retailer chief information officers identify analytics, digital marketing, mobile applications and ecommerce platforms as key technologies needed to meet their organization’s mission, Gartner says.

CIOs accountable for business results

“Retail CIOs used to be tasked with minimizing risk and cost,” says Gartner analyst Molly Beams. “Now they are held accountable for business results. They are prioritizing ROI and other measurable business impacts. Retail CIOs are investing in analytics for both near-term benefits like decision-making and to prepare for innovations such as smart machines, AI and augmented reality—all of which will require robust datasets.”

In addition to insights into the latest in ecommerce technologies, the Internet Retailer Conference & Exhibition has a new look and feel this year, along with a new name, IRCE @ RetailX, reflecting its co-location with two related conferences. The conference, which runs June 25-28, features an exhibit hall with nearly 600 ecommerce software, hardware and services vendors, ranging from startups to the industry’s most well-known names—and everything in between.

This year, attendees can also visit exhibitors from RFID Journal Live Retail, which focuses on the use of radio frequency identification to track retail inventory, and GlobalShop, thanks to RetailX’s combined exhibit hall. RFID Journal Live Retail and GlobalShop, which showcases retail store design, are owned and managed by Emerald Exhibitions, which also owns IRCE. Emerald combined the three exhibitions this year to give attendees access to a broader range of educational sessions and exhibitors as the industry expands.

Keeping up with a rapidly evolving business environment is a major challenge for retailers, and IRCE @ RetailX brings together technology, marketing and operations exhibitors and subject matter experts under one roof. Every year, IRCE, which is the largest annual event focused on ecommerce, showcases the latest advances in technology, marketing and operations from ecommerce platforms to fulfillment to omnichannel management. This year’s show aims to highlight some of those emerging technologies in a new track, “Place the Right Bets Now for the Digital Future.”

New business models

“This track puts the focus on new business models and technologies that aren’t in widespread use,” says Doug Hope, RetailX show director at Emerald Expositions. “The track is a new approach for IRCE and will give attendees with a deep understanding of current strategies and technologies a glimpse of what’s to come.”

For example, Daniel Lucht, global research director for the London-based research and consulting firm ResearchFarm, will speak in a session that will dig into how changing consumer expectations in the European Union, Asia and elsewhere are driving retailers and vendors to invest in robots, facial recognition technology and other applications. In the same forward-looking vein, Brendan Witcher, a Forrester Research Inc. ecommerce analyst, will review the latest ecommerce technologies and identify those that can help retailers achieve measurable competitive improvements.

In some cases, the sheer scope of ecommerce technology available to retailers can be overwhelming. Marta Dalton, global director of ecommerce at consumer packaged goods giant Unilever, will explain how the company built and organized multiple marketing technologies—the marketing stack. Dalton will share tips on how to select and evaluate technology from among thousands of marketing applications and describe how to organize the stack to produce a healthy return on investment.

Between the conference sessions and an exhibit hall that covers more than 400,000 square feet of space, there are ample opportunities for retailers to examine what’s coming next in retail, Hope says.

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Online marketplace The Grommet dishes on the storytelling that fuels ‘values’ shopping

Jessica Young — Tue, 19 Jun 2018 14:17:43 +0000

Al Contarino was thwarted one too many times trying to make pizza on a traditional grill. He couldn’t manage to get a consistent high temperature to cook his pies. Every time he lifted the lid, he lost heat, and the bottom cooked faster than the top.

But when he and fellow inventor George Peters were tinkering around with the concept of a grill-top pizza oven in 2010, they built a chamber—stuffing it with charcoal and hard wood chips—that could reach 750 degrees and cook a pizza in about five minutes. Although the KettlePizza co-founders got their steel grill insert into Crate & Barrel stores and on CrateandBarrel.com and Walmart.com and opted to start selling on Amazon.com several years ago, they’ve still battled a brand-awareness problem.

To make some gains in that area, Contarino and Peters pitched their product to The Grommet, an online marketplace and product discovery platform, for a spotlight slot. And they got a bite. Although Jules Pieri, the marketplace’s co-founder and CEO, said she was extremely impressed by the pizza grill sleeve itself, it was the company’s insistence on retaining that “Made-in-the-USA” stamp that earned her admiration.

Getting The Grommet

The pizza oven launched on TheGrommet.com on June 1—just in time for Father’s Day shopping. The video accompanying the item puts a face to the KettlePizza name—offering a peek behind the curtain and talk of corporate social responsibility in a format that’s too often reserved for mere product demonstration.

Case in point: The fact that Contarino and Peters have found partners all over the country to cut steel, fit nuts and bolts, handle the pizza stones and make boxes for the brand wouldn’t normally make it into a manufacturer’s description on a product detail page. But the narrative bent of The Grommet’s video shoots allows for—and actually demands—that background context.

“It has been a joy when you deal with other companies—and a lot of family owned companies—around that are still being committed for decades to making things here in the U.S., where we’re getting product from,” Peters said in the video piece.

“You want to be able to create jobs for people in your community or in your own country,” Contarino added.

“Values” shopping

The “locally sourced” angle played well at The Grommet since it aligns with one of the marketplace’s core tenets. The Boston-based outfit, which has been around for nine years, caters to local “makers” and small businesses offering innovative items. But its biggest differentiator is that the site focuses heavily on “values” shopping, Pieri said. Products featured on the TheGrommet.com, which has 16 merchandise categories, fulfill at least one of the company’s 10 values:

Crowd funded
“Made in the USA”
Sustainable living
Handcrafted
Philanthropy
Independent maker
Technology and innovation
Underrepresented entrepreneurs
Social enterprises
Made for a lifetime

News

The Grommet's CEO talks through the notion of 'Citizen Commerce'

Jessica Young | Jun 19, 2018

“[With] the KettlePizza video, when I see those two guys, I’m like ‘I’m in. I’m in! Whatever you’re doing, I want to know more,'” Pieri told audience members during a 2018 Internet Retailer Conference & Exhibition session on heightening product visibility for online shoppers. “When they talk about the joy and use words like that for helping other businesses create jobs… It takes this product, which is brilliant, and it transcends [and that is] almost heroic to me.”

People “orient” to companies—not just products, said Pieri, adding that the “Made-in-the-USA” mission resonates.

“What we’re really in it for—and what our community is in it for—are those founders,” Pieri said. “You hear what they care about… It’s very much the reason why we exist—because you might never know of this company otherwise. There are not natural outlets for these kind of companies, and that’s what we’ve become.”

Peters, who declined to give exact online sales figures for the private brand, said that thanks to The Grommet, KettlePizza doubled its online sales during the first half of June when compared with last year’s seasonal numbers.

Making it to market

Each week, The Grommet receives about 300 submissions from business owners looking to highlight their product on the marketplace, and a team of 10 whittles down the list of pitches before turning items over to the larger group of nearly 100 employees for testing. Ultimately, six products are selected to represent values its consumer audience cares about, and they are launched on TheGrommet.com with an original introduction video.

Many of the more than 2,800 products Pieri has had a hand in launching—like Fitbit, OtterBox, SodaStream and Bananagrams—have become household names. The Grommet is the third startup for Pieri, who began her career as an industrial designer, and she built it as an outlet for her professional frustration.

“Every business needs to have a sort of burning problem driving the founder crazy,” she said. “And in the larger consumer products companies that I worked in, I was finding that our best products were not making it to market.”

While Pieri was working as a senior executive at Playskool, she asked her boss, Meg Whitman, why they were producing the same old products. Whitman, who went on to run eBay Inc. and HP, responded: “If Kmart, Toys R Us, Target or Walmart don’t want it, we can’t make it.”

“What was happening in retail and in toys is that specialty retail was really shrinking. Main Street retail,” Pieri said. “And that just pissed me off that any company—large or small—with a terrific ability to innovate, to do good, to push the envelope… was losing its access to customers.”

Ahead of the curve

Meanwhile, there was another shift occurring.

According to recent research Pieri cited, 66% of people would like to support small businesses. Other notable takeaways from The Grommet’s analysis:

These same smaller retail players rank very high in The Pew Charitable Trusts survey while big competitors do not.
29% of people want to support businesses that support their personal values.
64% of people felt guilty about some of their purchases.

This undercurrent, driven by consumer sentiment, may be quite apparent now that the marketplace is nearly a decade in, but Pieri said the “Citizen Commerce” concept was not a given back when The Grommet was starting up. At that time, she and her co-founder had no access to meaningful data to support their proposed business strategy, which is how it usually goes in an industry that expects entrepreneurs to be ahead of the curve.

“We’re good at reading the Zeitgeist,” Pieri said. “I have to skate to where the puck is going, in the Gretzky-type analogy—I’ve always been paid to do that. And so it wasn’t hard for us to know what some of the current values were.”

Strategy by proxy

Around 2007 or 2008, Pieri noticed that farmers markets had been growing 17% year over year for several consecutive years. “That was my best proxy for shopping by values because shopping at a farmers market is super inconvenient, and it can be expensive,” she said “But you’re making a statement: You’re going out of your way to do that.

“And even though tomatoes aren’t a proxy for pizza ovens or dog toys or personal accessories or outdoor gear and all the things that we launched, it was the closest thing I had, and I had to go with that,” Pieri added. “But it made me queasy to take that leap of faith and hope that there was a large enough cohort of people (interested).”

More recently, independent bookstore trends have bolstered Pieri’s early speculations on values shopping. That market has been growing 11% year over year for the last few years, Pieri said, and this shopping behavior is a similar expression of personal values.

Telling stories

Aside from unearthing interesting products that do what they purport to do, the trick is to commit to storytelling, which is an expensive endeavor for The Grommet, Pieri said. The marketplace wouldn’t be successful if her team just copied and pasted the specifications from a manufacturer’s product detail page, she said. But with a bit more marketing energy, any “Made-in-the-USA” items—which perform the best of all values, Pieri said—transform.

Pieri recalled her experience with Zkano’s pitch. One day, she came into work and saw two pair of ordinary white athletic socks on her co-founder’s desk. “She said ‘You’re gonna love this!’ [I was] like, ‘Is she smoking dope?’ We do special products every day. I could buy these socks from anywhere,” Pieri recounted.

But then came the backstory. Creator Gina Locklear grew up in Fort Payne, Ala., where her parents built a sock-manufacturing company in what was the sock-making capital of the United States throughout most of the 20th century. In the 1990s, the country offshored sock production, and the hosiery business took a major hit in Locklear’s hometown, which was suffering.

Looking at the family business with fresh eyes, Locklear realized that organic cotton socks weren’t really being produced here with known local sources, and that was a huge market opportunity. She opted to start making her products from certified organic, ring-spun cotton grown without pesticides or chemicals, and the green business has been a boon to the local industry.

“Again, like the pizza oven, they go from sitting on a table… Kind of can’t talk for themselves, looking very uninteresting… To when you learn the story, it’s like the heavens open,” Pieri said. “You say ‘Oh my gosh! We need to buy these socks. We need to help Gina!’”

The Grommet has yet to have run into a values-driven competitor even after operating for nearly a decade, she added. Pieri watches her merchandise return rate “like a hawk,” and the marketplace comes in under 3%, which she said is “unheard of” outside of a retailer that’s selling washing machine repair parts or something in that vein. For Pieri, it’s a signal that products are delivering on their promises and that The Grommet’s reputation and credibility with customers isn’t jeopardized.

Here are a couple of Pieri’s other favorite launch stories:

Lake Art

Product: Bathymetric depth chart maps of lakes. The wooden topographic wall art depicts shorelines, colors and up to eight depth dimensions of more than 4,000 bodies of water.
Value: “Made in the USA”; handcrafted
Story: The Michigan-based, father-daughter-operation makes its frames from reclaimed wood gathered from the abandoned homes in Detroit. Since the business launched on the marketplace, The Grommet sold $6 million worth of the frames. The Lake Art team has expanded from a handful of people to 40 employees.

The Negg

Product: Hard-boiled egg peeler. The shells slide off once the egg is shaken in some cold water with the help of a hand-held kitchen device.
Value: Underrepresented entrepreneurs; “Made in the USA”
Story: Inventor Bonnie Tyler, who is a senior citizen, offered to bring deviled eggs to a party one night and wound up switching out to a bag of potato chips after she botched the egg-peeling step. After some research at the local library on industrial peeling—which combines vibration, movement and water—she prototyped a miniaturized version of a peeler. Tyler even manufactures the product in her own backyard: Connecticut.

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Augmented reality nets real results for Tilly’s

Bill Briggs — Thu, 14 Jun 2018 16:41:47 +0000

No risk, no reward, as the saying goes. And in an overcrowded apparel retailing world, standing out can mean taking risks. Last year, apparel and accessories retailer Tilly’s Inc. was looking for new ways to connect with its consumer base and took a flier with augmented reality.

Tilly’s invested an undisclosed amount of cash—and a considerable amount of labor—in an augmented reality promotion aiming to draw mall shoppers into one of its stores. The return on investment was not clear up front, but results included increased store traffic and more consumers downloading the Tilly’s mobile app, Jon Kubo, chief digital officer, said last week at the Internet Retailer Conference & Exhibition in Chicago.

Foot traffic in the store increased 30% from the start of the AR window installation.

Tilly’s reaches its largely young adult customer base through its website at Tillys.com, a mobile app and more than 200 stores in 33 states, many based in shopping malls. Augmented reality enabled Tilly’s to overlay 3D animation on shoppers’ images in its Ontario, California, store. The resulting video feed of store shoppers interacting with life-size animated figures in scenes was projected to the store’s front window, Kubo said.

3D dragon

The store, located in Ontario Mills shopping mall, brought together 3D images, an in-store video camera and a video screen nearly the size of a store window to show Tilly’s customers interacting in the store with a giant dragon, octopus tentacles dropping from the ceiling, a skateboarder riding the walls and a floating shoe.

Foot traffic in that store was up 30% from the start of the AR window installation, Kubo said in his IRCE session titled “AR Done–and Fun. Don’t Abandon that Idea You are Itching to Try.”

Tilly’s, No. 432 in the 2018 Internet Retailer Top 1000, used Inde, a Hungary-based augmented reality company, for the imagery.

Kubo didn’t address specific expenses related to the 3D modeling video promotion, but noted his research found that costs for outsourcing such an animation project could range from $7,000 to $30,000.

Shoot it yourself

Simpler imaging can be done internally, with some ingenuity. “To just shoot a shoe, I can do that myself with an iPad,” Kubo said. Related costs are around $200 he estimated, noting merchants can train staff to capture images, plus “the 3D camera cost has come way down.”

Tilly’s also used AR with its mobile app in a scavenger hunt in August tied to back-to-school shopping. To help with the promotion, Tilly’s enlisted social media personality Shaun McBride, otherwise known as Shonduras, whose followers relate to his skateboarding and daredevil adventures. He encouraged contestants in their search via the app, congratulating them when they found—by camera scan—one of three coins hidden in images placed around stores. Shoppers who found three coins received a 20% discount coupon on their phone.

That event offered a $500 shopping spree, a laptop and a trip to McBride’s “Space Station” in Utah, headquarters for his gaming company of the same name, as the grand prize. Contestants were required to download or update the mobile app and allow location tracking and phone camera access. Then, they searched stores across the country for animated coins connected to images, such as one depicting a backpack from JanSport, one of the promotion’s sponsors.

The promotion drove “tens of thousands” of entrants to stores, who yielded an 80% coupon redemption rate, 99.6% opt-in for push and location tracking via the app, and a 23% hike in-app downloads during the event, Kubo said.

Tilly’s developed and launched the promotion in about two months, which included two weeks for the rough concept, two weeks for the story boards and creative mock-ups, one week to develop a script and four days of filming with McBride and a green-screen setting. They met their tight deadline, but Kubo recommended “doubling that so your hair’s not on fire.”

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Diane von Furstenberg refocuses its website on personalization to drive sales

Stephanie Crets — Wed, 13 Jun 2018 20:00:55 +0000

Women’s apparel retailer Diane von Furstenberg, known for its wrap-style dresses, launched a new e-commerce website about a year and a half ago after it struggled with a site that was too generic and didn’t work well on mobile.

The retailer redesigned its e-commerce site “with the right team focused on personalization,” Felipe Araujo, senior director of e-commerce at Diane von Furstenberg, told attendees during the session “Personalization: The Site Changes That Drive Meaningful Sales” at the 2018 Internet Retailer Conference & Exhibition in Chicago.

Diane von Furstenberg, No. 836 in the Internet Retailer 2018 Top 1000, has boosted its sales so far in 2018 compared with 2017, Araujo said, crediting much of that revenue increase to its redesign efforts.

The apparel retailer first removed some of the excess technology that it felt was bogging down the website—such as reviews and content titles on product listing pages—and reduced the number of product filtering options. It also added a number of personalization elements with the help of personalization platform provider Qubit and its Aura program.

When a shopper visits the DVF.com homepage, she sees a feed of items that are “trending now,” which is a lot like product recommendations, and shows consumers items that have been recently purchased by other customers and other popular items on the site. The trending feed is automated for most visitors, including past customers, new visitors and returning non-purchasers, who are shoppers who have browsed items, but did not purchase anything.

The personalization elements also adapt to what the shopper is looking at when on mobile. If someone clicks on items in the sales category and then clicks on the wrap dresses category, the machine-learning algorithm implemented in the website will re-sort the category navigation, changing it to show wrap dresses and sales items since that is what the shopper is most interested in viewing, Araujo said.

Diane von Furstenberg saw a four-times increase in conversion rate for people who interacted with Qubit’s Aura versus regular mobile users.

In addition, if a shopper returns to DVF.com after browsing a few items on her last visit, she will see a pop-up message, or a nudge as the retailer calls it, that shows her items she recently viewed, as well as the trending feed and an e-mail sign-up to become a “DVF insider.” The recently viewed nudge accounted for $125,000 of its revenue, Araujo said. “We’re trying to jumpstart the experience, to get you right back where you started searching,” he said.

The retailer also found engagement and conversion on its mobile site to be an ongoing issue before it redesigned its website.

A Qubit study of 2 billion interactions and 120 million purchases—although the company did not specify the time frame of this study—showed that 28% fewer shoppers add products to their bag on mobile and 44% fewer shoppers convert on mobile compared with desktop shopping. Diane von Furstenberg cited reasons for its shoppers not buying more on mobile, such as the desktop site was faster to browse, easier to find items on and easier to make a payment through, Araujo said.

But since implementing changes and making its website more mobile friendly, Diane von Furstenberg’s mobile conversion rate increased 400%, Araujo said.

The initial iteration for the website redesign process took about three weeks to ensure the personalization elements worked, he added. But now that the retailer is one-and-a-half years into making these changes, “it has unlocked infinite possibilities,” Araujo said.

“We will continue to iterate,” he went on. “You don’t setup an experience that’s working great and move on. You come back and start to optimize it because that’s when it becomes really fun.”

In an ongoing effort to understand the most vital business strategies of merchants that sell online, Internet Retailer is taking a deep dive on conversion rate. Help us improve our estimates and category benchmarks by answering the two questions below.

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Two very different e-retailers adopt a high-touch approach to customer service

James Melton — Fri, 08 Jun 2018 18:22:17 +0000

Every e-retailer says it wants to excel in customer service. There are those that do their best with what they have. There are those that devote resources above and beyond industry norms. And then there are those that really commit.

Representatives of two very different retailers in the third category made presentations June 6 during a session about “high-touch” customer service at the Internet Retailer Conference & Exhibition in Chicago.

Ryan Lane, founding owner of Dream Beard (left) and Kelli Durkin, vice president of customer service at Chewy.com.

Grooming products maker Dream Beard LLC and pet supply retailer Chewy.com have committed to making customers feel appreciated and each works at it in its own way. But, in each case, a key factor is trusting customer service representatives—on the phone, via live chats or via email—to be empathetic and do the right thing.

Ryan Lane, founding owner of Dream Beard, said his goal is to maintain a real human connection with customers.

“We all build walls around us that make the Great Wall of China look like a white picket fence,” Lane said.

Lane said Dream Beard tried to break down that wall by empowering customer service representatives to do what they think is right for customers, and to interact with them on a human level. “As long as they aren’t being mean and are being positive, I don’t care what they say,” Lane said.

Lane said he personally tries to eliminate the wall between himself and his customers, in part, by writing thousands of handwritten notes to customers. In 2017, he started a podcast series that explores issues like health and well-being, society, religion and spirituality. Lane said he started the podcast not long after taking a six-month hiatus from Dream Beard’s Instagram account. “I needed something real,” Lane said of his decision to start the podcast.

Dream Beard launched in 2012 selling beard oil. Within four months, the retailer was selling in more than 35 countries and now sells in more than 80. Since its launch, Dream Beard also has expanded its offerings to include men’s grooming products that aren’t beard-specific, along with apparel, seasoning rub for steaks and other items.

Chewy, which PetSmart Inc. (No. 50 in the Internet Retailer 2018 Top 1000) acquired in April 2017, answers customers who call or initiate an online chat within six seconds and responds to emails within half an hour, said Kelli Durkin, Chewy’s vice president of customer service.

Like Dream Beard, Chewy wants its customer service staff to be empathetic with its customers—who, after all, buy Chewy’s products to care for a pet they love, Durkin says.

Durkin says Chewy looks to hire customer-service employees who are friendly and self-motivated, want to “wow” the customers they deal with and show an interest in moving up in the organization over time. Chewy then trains those employees at in-person training sessions, instead of online. She says the training is aimed at “changing their brains” so they feel free to treat customers warmly and do what it takes to make them happy.

For example, during one live chat between a shopper and a Chewy customer service representative, the customer was making an enormous number of typos Durkin said. Eventually, the customer admitted she was using a broken computer keyboard. The customer service staff grabbed a spare keyboard off the shelf and mailed it to that customer.

“You can’t put a price tag on how a customer feels,” Durkin said.

Chewy, founded in 2011, booked online sales of $900 million in 2016—prior to being acquired. That year, it accounted for 57% of online pet food sales, according to Internet Retailer estimates.

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Houzz.com grows through international expansion and mobile technology

Don Davis — Thu, 07 Jun 2018 16:10:17 +0000

Home remodeling online marketplace Houzz.com is growing its business through advanced technology that makes it easier for consumers to see products in their homes and by launching websites around the world.

Houzz now operates websites in 14 countries outside of the United States—11 in Europe, plus Japan, Singapore and India, and all provide free listing to contractors, architects, designers and other professionals. Twelve of those sites also enable those professionals to advertise their services to homeowners in their markets, president and co-founder Alon Cohen said today in a keynote address at the Internet Retailer Conference & Exhibition in Chicago. Cohen said 3% of projects received by design pros via Houzz in 2017 were from outside their own country, and Houzz drove $4 billion worth of business last year to paying companies.

Some 1.5 million home remodeling service providers in 65 categories are listed on Houzz.com, which attract 40 million unique visitors per month. Houzz provides free listings for those professionals and earns revenue by displaying ads from professionals seeking projects in their areas.

It’s getting to where e-commerce provides a better customer experience than the offline experience.

Technology that makes it easier to visualize products in their home also has boosted sales on Houzz.com, which offers more than 10 million home décor products and furniture from 20,000 retailers. Houzz.com is No. 10 in Internet Retailer’s 2018 Online Marketplaces ranking.

Alon Cohen, co-founder and president, Houzz

Cohen says letting consumers see three-dimensional images of products in their homes has increased conversion in a big way. Consumers using Houzz mobile apps can view 1 million products as 3-D images—up from 300,000 when the 3-D feature was added last year—and 2 million consumers have used the visualization tool when making purchases, Cohen said. They also can add notes to their images and share them with others. He said those who view 3-D images of products are 11-times more likely to purchase than website visitors who don’t.

Personalization also increases the likelihood that a site visitor will buy. Cohen showed an example of a barstool product page with recommendations of related products. He said that while 38% of consumers who land on this product page buy the barstool, 62% buy at least one of the recommended products.

Houzz tailors the recommendations to each consumer, using such data as the consumer’s style preferences, what kind of photos they save and other products that were in photos they viewed.

A new feature in the Houzz app lets a consumer turn a tablet into a photograph of a product, letting a consumer hold, for example, an image of a piece of art or lighting element on a wall to see how it would look in her home.

Cohen said features like that make purchasing home goods online in some ways better than shopping in a store.

“If you want to buy a sofa and want to see what it will look like in your home, you can do that with your phone, but you can’t do that in a store,” he said. “It’s getting to where e-commerce provides a better customer experience than the offline experience.”

Cohen, who co-founded Houzz in 2009 with Houzz CEO and Cohen’s wife Adi Tatarko, did not address speculation Houzz may be preparing to go public prompted by the company’s recent hiring of a chief financial officer from LinkedIn Corp. Houzz has raised $613.6 million in funding, according to Crunchbase, and is reportedly valued at $4 billion.

Cohen said 90% of Houzz users are homeowners, and that 84% of those homeowners plan to purchase a home product in the next six months and 71% plan to renovate or redecorate their home.

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Death Wish Coffee rockets sales through Amazon

Stephanie Crets — Wed, 06 Jun 2018 19:09:10 +0000

Death Wish Coffee, the “world’s strongest coffee,” got a big boost in exposure after it won a 30-second Super Bowl advertisement from Intuit’s ‘Small Business Big Game’ competition in 2016. DeathWishCoffee.com saw 120,000 site visits within 10 minutes of the ad airing. But its biggest booster is selling on Amazon, founder and CEO of Death Wish Mike Brown said on Tuesday during the Growing Your Sales on Amazon workshop at the 2018 Internet Retailer Conference & Exhibition in Chicago.

Death Wish has been selling its coffee products on Amazon since 2012. The online coffee retailer accumulated 90% of its revenue from e-commerce sales, with 10% from wholesale. 45% of its 90% of e-commerce sales came from Amazon, Brown told Internet Retailer.

Brown’s co-presenter during the IRCE workshop Jeff Cohen, chief marketing officer at Amazon selling solutions provider Seller Labs, discussed why Death Wish has had such success selling through Amazon and why the e-commerce giant can drive even more sales for marketplace sellers. “Amazon’s position in the marketplace is changing, and it has changed the fabric of how we shop online,” Cohen said.

20,000 small and medium-sized businesses worldwide that sell on Amazon surpassed $1 million in sales using the marketplace, Amazon said.

So, how does a seller use Amazon to their advantage? Cohen revealed several ways Death Wish built its brand on Amazon despite the increasing volume of e-commerce coffee competitors such as Starbucks and Caribou Coffee. “First, you’ve got to have a product that doesn’t suck,” Cohen said with a laugh.

He went onto discuss the key things sellers must continually do to be successful on Amazon:

Build Amazon listings: Pay attention to the product title, product description and keywords and utilize the question-and-answer section of the product page.
Use videos and photos: “People buy with their eyes because they shop on their phones and they don’t want to read. Tell a story with your brand,” Cohen said. Brand photos are something Death Wish is continuing to work on, Brown added.
Build an audience on social media: 445,000 people like Death Wish on Facebook, 76,900 people follow the brand on Twitter and 144,000 people follow Death Wish on Instagram.
Blast the email list: Death Wish sends its 500,000 subscribers one email per week. “If you’re consistent with it, it grows itself after a while,” Brown said. “We try to stay up with lead-capturing campaigns and delivering more value every single time. It starts before the customer even gives me their money.”
Pay attention to Amazon reviews: Analyze the reviews because they are proof of the product working or not working—and if not, then sellers should refine the product, Cohen said.

Death Wish has big plans that go beyond selling on Amazon. The coffee e-retailer, which also sells its k-cups on Walmart.com, is in talks to sell its products through both Whole Foods and grocery retailer Safeway, Brown said. “We didn’t choose Walmart over others, the talks just happen at different times,” he added.

Additionally, DeathWish is sending its coffee to space. The retailer worked with NASA’s food scientists to develop a space-worthy coffee—a powdered version of DeathWish’s coffee that the astronauts will just add water to—on the next Space X launch, Brown said.

Amazon is No. 1 in the Internet Retailer 2018 Top 1000.

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Tips on selling on Amazon Business from two veterans

Paul Demery — Fri, 11 May 2018 16:54:38 +0000

Brian Fricano and Matt Clark have learned lots of best practices when it comes to selling through Amazon Business. They’ll share them at during a June 8 session at the IRCE B2B Workshop in Chicago.

Selling on Amazon “can be great, with lots of sales and some profit and brand-building,” says Clark, who is global head and vice president, e-commerce and digital marketing, at industrial electronics distributor Premier Farnell. Adds Fricano, founder and CEO of Sustainable Supply, a distributor of building and maintenance products: “Selling on Amazon is a delicate dance and your strategy needs to be iron clad before you list your first item on the marketplace.”

Among the details they’ll share of their sales-generating strategies:

Determine the right product portfolio for listing on Amazon, including commodities
Don’t give away the secret sauce—keep your top-selling, secret and propriety products off of the marketplace
Develop a strategy for products that are not currently offered on Amazon
Determine the right pricing strategy for selling on Amazon

Clark will also discuss how Premier Farnell has modified some business operations to better compete with Amazon as well as use it as a sales platform. Fricano will review steps Sustainable Supply has taken over the past 18 months to “get our Amazon store launched (with technology integrations, teamwork and tech vendors)—and the lessons we’ve learned in the process.”

IRCE, or Internet Retailer Conference & Exhibition, will run from June 5 through June 8 at the McCormick Place West Convention Center in Chicago. IRCE was founded in 2005 by B2BecNews publisher Vertical Web Media, which still manages the IRCE conference agenda. (IRCE is now owned by Emerald Expositions.)

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