How do you compete with giants like Amazon/Toys R Us, Target, and Wal-Mart? "We certainly pay attention to all their pricing, and we'll adjust ours if we're off," says Gary Lindsey, eToys' VP Marketing.
In addition, over the past 12 months, Lindsey has focused on five specific initiatives that have significantly increased growth for the company:Tactic #1. More free shipping
Everyone knows free shipping can work wonders for conversions. The bigger sites such as Wal-Mart and Target often offer it on a couple of hundred popular SKUs where the offer will get the most attention.
To compete, Lindsey takes a comprehensive approach, offering comp shipping across a far broader range of SKUs -- up to 1,000. This way he may catch sales from comparison shoppers online. Although each SKUs sales are relatively minor, the extra conversions add up to impact the bottom line.Tactic #2. Thick print catalog
For the last two holiday seasons, Lindsey has tested an eToys print catalog, dropping it three times prior to Christmas. It was so successful that this year he rolled the catalog out in full, sending it to almost his entire online buyer database. The catalog this year ran 124 pages, much larger than any other toy catalog.
Its focus is to drive consumers online to purchase. (Note: This is a tactic being taken by many eretailers this season, both for catalog mailers and for traditional retailers hoping to save on phone orders and sales reps' time answering questions in-store.)
Lindsey's database is segmented into different businesses (KB Toys, Sears, My Twinn), and each of the businesses has several segments within it, so that the database has at least 50 segments. He carefully refrains from mailing a slice of names from each of the 50 segments as a control group, so it's easier to measure the catalog's true impact on online sales for each demographic.
Additional measurement tactics include asking online shoppers for their catalog code in the cart, and doing a year-end match-back procedure to determine which mailed customers ordered online.
These three measurement procedures have revealed that the catalog increases both order rates and average order value. "There's a significant lift in both response and average order. The catalog pays for itself and a lot more."Tactic #3. Biweekly press releases
In the past year, Lindsey decided that eToys should be seen as "somebody who provides data and information about the toy industry," he explains. He describes it as the "intellectual approach."
So, with the help of PR firm G.S. Schwartz & Co., eToys began a high-profile PR campaign, sending out press releases about every two weeks. Some focus on research, such as how much money per child families plan to spend during the holidays. Others describe unique new products.
The tactic has definitely gained media mentions. "We've gotten a bunch of write-ups in the Wall Street Journal."
Also, an air-compressed pogo stick that eToys carries is going to be showcased on ESPN on Friday. Earlier this week, the company was on the Today Show with the My Twinn doll line.Tactic #4. Birthday club
Lindsey's team launched a birthday club that "drives a ton of volume," he says. Parents join the club online, and then are sent an email reminder a month before the child's birthday.
Unlike typical wish-lists which are built by the shopper, this program pro-actively makes purchasing suggestions of bestselling items by gender and age.
The birthday club emails have a 27% open rate, he says. Of those opens, over 4% make a purchase.
The site promotes the club with a pop-up at checkout. The pop invites parents to sign up for their choice of the birthday club, the print catalog, and/or the email newsletter. (Notably, the newsletter is the most popular offer.)Tactic #5. Extensive research and testing
Each year, Lindsey recruits a new panel of 400 purchasers from eToys. Each panel member receives a 10% discount for that entire year.
Lindsey communicates with them about once a month, asking what they like best in new product concepts, catalog covers, etc. Sometimes when he plans to run an email test, he'll run it past the panel first, as well. "It helps reduce risk," he explains.
"For email, testing is a constant. Off-season versus on-season might have very different responses. Even the days of the week can be so different." Lindsey has noticed that if he mentions a big brand name such as Mattel or Barbie in the subject line, he gets larger open rates. Of course, deep discounts in the subject line work well, too.
For the My Twinn line, he recruits 400 mothers and their daughters, for a total panel of 800. "Sometimes there are big differences between the girls and their moms," he says. Mothers might love one concept, while their daughters hate it.
Lindsey also does focus groups in-house, with current and prospective customers invited in for their input on ideas. "I come from Pillsbury," he says, to explain his focus on research. "We do a lot more research than most companies."Useful links related to this article
Sample of an eToys press release that was picked up: http://www.marketingsherpa.com/etoys/study.html
Note: eToys is a member of Shop.org, a forum for retailing online executives to share information, lessons learned, new perspectives, insights and intelligence. More info at http://www.shop.org