Apr 20, 2001
SUMMARY: Yes, you can sell expensive items online without tricks or hype, even if you are not a famous name-brand retailer. This Case Study reveals the inspirational story of 10thAvenue.com, an ecommerce site that sells beautiful expensive items to women online. || |
Want to buy a hand-painted 19-inch obelisk for $3,235? You're probably an older, affluent woman -- and 10thAvenue.com, "a marketplace for the finer things in life," is the online store targeting you.
Research shows that, when older women shop online, they strongly prefer buying from name brands they already know and trust. But when 10thAvenue.com launched in August 1999, it had no offline retail stores, no catalog, no pre-built brand name at all. Plus, the site's products were, for the most part, handcrafted items such as African art, that also weren't famous-name branded.
How does an Internet pure-play reach these older affluent women, and convince them to buy fairly pricey items?
VP Business Development Jordan Siverson says, "We've tried everything, banners, print ads, affiliate programs, keywords...."
The site's initial launch campaign consisted of a full-page ad in Better Homes & Gardens magazine that featured several product shots, the URL and an 800 number. At the same time, 10thAvenue.com tested banners just about everywhere women go online, including AOL, iVillage, Women.com and Yahoo. Most banners also featured product shots in order to generate targeted clicks.
Next, Siverson paid for high-ranking search engine listings on both AskJeeves and GoTo. He tested a wide variety of search terms, from the very broad -- such as "gifts" -- to the very targeted, such as "African baskets."
In early 2000, the site launched an affiliate program through Commission Junction. After thoroughly researching the competition, Siverson decided to set his base affiliate sales commission at 12%. He says, "It's real competitive, so affiliates will give 10thAvenue.com better placements on their sites." To keep affiliates excited about the program, 10thAvenue.com occasionally emails them special offers, such as a higher commission rate for a month, or free shipping coupons affiliates can pass on to their visitors.
Recently the site has run print advertisements in highly targeted upscale magazines in New York and California. 10thAvenue.com is also testing the Internet Cash program, which runs on a commission-only basis with no up-front fees. Internet Cash lists several 10thAvenue.com products on its destination site.
Last but not least, 10thAvenue.com bought several similar URLs, such as 10thAve.com, and redirected traffic to the right site. Siverson says, "It's confusing, people hear our brand name and they don't always know how to spell it."
10thAvenue.com uses five key tactics to convert its traffic into buyers:
1. A strongly branded environment -- 10thAvenue.com commissioned artist Paul Loven to create a series of pictures, which appear throughout the site, to give it a strong personality and feeling of "place." The images are highly romantic without lapsing into cuteness. (They remind us of the style used in TV ads for upscale wines.)
2. Superbly photographed products -- Siverson says, "We try to have a really great picture. A picture can speak everything. It can pull someone over the edge to become a buyer."
3. 100% satisfaction guarantee -- Siverson feels a strong, money- back guarantee is critical to the site's success. He says, "If you buy a piece of art and it doesn't look as you imagined on your wall, you don't want to be afraid to send it back."
4. Prominent 800 numbers -- The Company's toll-free phone number appears in large numbers in a prominent position on the upper left hand corner of almost every page of the site.
5. Fast replies to emails -- 10thAvenue.com uses the Touchscape CRM system to reply to all emails efficiently and quickly, while databasing the information learned. Siverson says, "The more we use it, the smarter it gets. It also reduces our need for staff."
10thAvenue ships all products in attractively designed boxes that continue the branding job the site began. Sometimes a free gift is also included, such as an Aquis facial mitt.
At a time when other consumer sites are in trouble, 10thAvenue.com is "very close to profitability." Is it possible to sell $3,000+ hand painted obelisks online? Siverson says, "Yes, there are a lot of people who will buy them. We're not really worried about the price of anything, just as long as the products are unique and something you can get good pictures of."
Approximately 15% of the site's current sales are to repeat customers, and that number continues to rise.
Siverson learned a lot of lessons from his marketing campaigns. He says, "Now we can cut advertising costs and become even more effective by targeting the advertising we do." Here are some of these lessons:
- Better Homes & Gardens ads are expensive, but they pull a lot of response. (In fact the ad run in late 1999 is still pulling occasional enquiries today.) Unfortunately many of the women responding didn't want to shop online -- they wanted to know when they could get a print catalog. Siverson says any future ads in national magazines will run in the areas devoted to Internet topics instead of general interest areas.
- Banners were not overall winners. Now Siverson only runs banners linked to specific keywords on Yahoo, or through his affiliate program.
- More than 12,000 affiliates have signed up for the affiliate program. The ones which have taken the next step and added 10thAvenue.com's banners onto their sites are responsible for driving more than 20% of the site's overall traffic -- resulting in just under 10% of total sales.
- Paid search engine listings have been a real winner. However, Siverson warns, "If I pay GoTo for the number one position for a popular broad term like 'gifts' it's like throwing money out the window. You're getting massive amounts of clicks, thousands an hour at $1.50 each and barely any sales. It's better to use more targeted keywords like 'bathrobes.' There's not any confusion that they're going to a bathrobe when they click. It seems so easy, but it really took a while to figure out."
- Although it's early days yet, the Internet Cash program appears to be working well. Siverson says, "We just started last week and already have had a few orders from it."
- The free surprise gift included with order has also paid off. Siverson says, "People call just raving about it. Women love it. That same customer will come back and buy more products from us."
NEXT: Due to popular demand, 10thAvenue.com will launch a print catalog this summer. More than 20,000 women have already proactively requested one.