What You Can Learn From the Top Internet Retailers

Web traffic analysis company Compete is reporting that Amazon.com and Walmart.com were the busiest retail Web sites during December. Wal-Mart had 40.7 million visitors, while Amazon handled 57.8
million. But, Amazon was the
overwhelming winner in online sales with 10.7 million transactions to Walmart’s 2.99 million. Amazon converted a higher percentage of web traffic to sales.

The top 5 online retailers had an average 24% increase in transactions for the month. How would you like a 24% increase in monthly sales? Compete reports the top 5 online retailers, by transactions, in December were Amazon, Wal-Mart, Qverstock.com,
JCPenny.com and Target.com.

The top 5 in December 2005 were similar, with Amazon #1, Wal-Mart #2, JC Penney #3, Overstock #4 and Landsend at #5.

If you are planning this year’s online sales strategy, whether it be Christmas, an annual white sale, 4th of July, Father’s Day, Back to School or your everyday initiatives, you’d do well to study the top 5 sites.  Research the way they present their offers, their call-outs, ease of navigation, support and return policies and incorporate those elements into your strategy. But understand that these top 5 retailers also have developed significant online brands; some of them building on existing bricks-and-mortar branding.  Ask yourself how you can develop brand awareness and integrity, especially in a specific niche.

L.L. Bean and Lands End
both showed increased Web traffic over December 2005, but neither company
increased online transactions.  Compete attributes the lower conversion rate to warm December weather over much of the US.  The weather, or other factors, may not be something you can control.  But how will your strategy be affected by similar changes in the market?  Adjusting according to market conditions may be easier online than with other marketing.  But planning for as many contingencies as possible will put you ahead of the game and further your success.

It will put you in a much safer harbor.

Traditional vs. Online

I had lunch with Clark Weber last week. Clark is one of the all-time popular DJ’s and radio talk show hosts in Chicago.  We worked together at WJJD in the 1990’s. He’s the former morning man and program director at WLS and had a great run as a talk-show host at WIND. Clark is now a successful radio ad guy specializing in the senior market.

After some initial gossip and catching up, we began talking about the effectiveness of radio advertising and the challenges of cutting through the clutter, whether it be broadcast, direct mail, newspapers, billboards or even the yellow pages.  Even a well-crafted radio spot can get lost in the middle of an 8-commercial stopset.

Reach and frequency in virtually any mass media has been a key element of any successful campaign. In Marketing-101, they teach you that you need to reach a certain number of people a certain number of times before they act on the advertising – and only then if they are interested in your goods or services.  Successful media planners/buyers, like Clark, constantly adjust campaigns to increase their reach or the frequency of the message (or both) to a targeted audience.  (They can also test and refine the message, as well.)

Tools are available to calculate the reach and frequency of just about any mix of media.  When I was at WLW Radio in the great city of Cincinnati, one of my jobs was to assist the sales department in developing a schedule on WLW that would complement ad buys on other stations.  WLW, the 50,000 watt blowtorch of the Queen City, had tremendous reach in the Midwest (and about 40 states and 4 countries at night) that exceeded the coverage of other AM and FM stations.  The station skewed towards an older audience, which didn’t always make us the outlet of choice for certain buys, but we could get a part of the budget that we might not normally get by enhancing the overall strategy with our tremendous reach (and programming).

This is a very simple example.  It’s more than demographics now days.  And with the Internet, there is a vast array of new opportunities, including enhancing traditional advertising like broadcast, newspapers and direct mail.

Traditional advertising can build traffic to a website where your prospect can be exposed to much more than you can present on a billboard or in a 60-second radio or TV spot.  You can engage your prospect with video and audio, animations and photography.  You can interact using online forms, e-mail or instant messaging.  You can educate with online or e-mail courses.  All this can lead to your prospect building trust in you or your company, which many savvy salespeople and marketers will tell you is a necessary component of getting the order.

We’ll discuss these online techniques in future posts.  Next up, part 2 of my conversation with Clark, and an idea that may work very well for one of his clients – or for you!  In the meantime, do some homework.  To get some ideas on cutting through the clutter, read Tony Rubleski’s book Mind Capture – How to Generate New & Repeat Business in the Age of Advertising Overload.  Another essential read is Guerrilla Marketing – Secrets for Making Big Profits From Your Small Business by Jay Conrad Levinson.  On page 28, read about the 20 exposures to an ad somebody needs in order to buy.  Then, read that the piece was written in 1885 and how it applies to today!

— Kurt Scholle

FYI-Online Holiday Spending Rises

comScore Networks released a report this week on consumer spending at retail sites in the United States.  From November 1 through December 3 of this year, the company reported a 17% increase in the number of online buyers, who are spending 7% more than for the same period last year.  comScore pegged online buying at $12.42 billion for the period, a 25% increase in total e-commerce sales from 2005.  comScore says that increase in online buying is inline with their estimates for Jan-Oct this year, which they say were up 24% over the same period last year.

Since November 1, the fastest growing retail categories included predominantly high-end merchandise:

  • jewelry & watches +69%
  • event tickets +66%
  • video game consoles & accessories +57%
  • consumer electronics +37%

(Note to self: Develop affiliate sales website for the 2007 holiday season, specializing in jewelry, video games and consumer electronics.)

comScore sees increased online spending from home computers, apparently due to increased broadband connectivity in homes.

I wonder if that means employee productivity is on the rise?  Nah, probably not.

By the way, Monday the 4th was apparently the biggest online sales day ever, with some $647 million dollars in sales.

— Kurt