As the online apparel retail market grows -- $10.2 billion in 2004, up 24% from 2003 -- so do celebrity apparel brands online. "Volumewise, it's north of $30 million," says Ed Foy, CEO of eFashion Solutions, Web marketer and retailer for top hip-hop and celebrity brands such as Eminem, Jennifer Lopez, and Russell and Kimora Lee Simmons. Celebrity and hip-hop fashion sites ship to 4,000 towns and cities in 120 countries, "and it's not just the Bronx and Los Angeles," Foy explains. "It's Idaho, it's Fargo, North Dakota, and it's growing dramatically."
But marketing celebrity-based apparel online has inherent challenges.
"Fashion is all about look, flash, and flare," says Foy. But in order to turn a profit on the designs, you still need a straightforward approach to sales. "It's challenging to maximize conversion rates when the designer wants to wow the consumer visually."
How can you mix celebrity lifestyle branding with direct sales? In our exclusive interview, Foy shared test results, lessons learned, and of course creative samples (below). Top Seven Lessons Learned from Celebrity Site eRetailing
Lesson #1. Daytime traffic wants quick loading
People who visit celebrity sites at work don't care about resolution. They want the images to load quickly so they can see it and get off, "before the boss arrives," says Foy.
Lesson #2. Best day-of-week varies seasonally
Highest traffic days tend to vary with seasonality. In the summer, shopping takes place during the workday, presumably because people are spending time outside during the weekends. In the winter, traffic tends to be higher during the weekends, "for all of our brands," Foy says. Orange County Choppers (OCC) is the exception, as traffic peaks regularly after the show airs on Tuesdays.
With this data in mind, Foy's team can schedule email campaigns for the best day-of-week in each season (link to sample emails below).
Lesson #3. Affiliates cannibalize sales
"Affiliate programs have helped with the launch of the sites, but after a while they were cannibalizing and were not that successful," says Foy. We suspect many eretailers have the same problem (unfortunately, according to MarketingSherpa data, the majority don't run metrics reports to track which "new" customers coming from affiliates are actually old customers).
That said, Foy's sites are inherently more memorable brand URLs for related fans than typical eretail sites would be. So, once fans know the site exists, they're more likely to go direct if not distracted with a click link from an affiliate.
Lesson #4. 98% of traffic is self-referred
All but 2% of traffic to these sites comes directly by typing in the exact URL. Foy notes there's room for growth -- for example he's barely scratched the surface of search engine marketing. The team has prioritized synching with offline where the brands are huge and pervasive.
Lesson #5. Keep backend systems in real-time alert loops with marketing
Last fall when jeans from Apple Bottoms began selling at the rate of an order a minute online, the back-end system alerted the marketing team almost instantly. Foy contacted the customer service call center and learned that the jeans had been featured on Oprah's Christmas list.
Nobody had known they'd be getting the publicity, but within minutes Apple Bottoms was able to order every pair of jeans available to keep inventory high, plus they quickly tweaked home page design to maximize conversions.
This isn't the kind of campaigning you can do when you're confined to monthly or even weekly planning meetings. To make the most of celebrity tie-ins, you need on-the-fly communication and decision-making capabilities.
Lesson #6. eTrust and Hackersafe: neither here nor there
Foy has tested putting third party assurances on the sites, but to his surprise it didn't impact business one way or the other. (Note: We've reported on different results for other eretail sites with less-known brands.)
Lesson #7. Full-price merchandise lasts longer online
Merchandise doesn't need to be marked down as quickly online as at department stores. "We think that has to do with the fact that the brand is presented in the entire lifestyle," says Foy. "The handbags, jeans, jewelry, T-shirts, shoes, are all displayed in one place. In a department store, they're all in different places. We can communicate what the brand means as a lifestyle."
He adds, "That blew my mind more than any other stat in the business." Quick Profiles of Three Celebrity Sites' Tests and Lessons LearnedCeleb Site #1 -- BabyPhat.com
Launched: marketing only, winter 1998; ecommerce, fall 2001 2004 Visitors: 12.1 million; Average conversion rate: 1.5%--2%; Outside links: 304
Description: Hip-hop mogul Russell Simmons, founder of Def Jam Records, is often credited with bringing the hip-hop culture to life. Over 12 years ago, he created Phat Fashions and launched the hip-hop lifestyle site, Phat Farm, which became ecommerce-enabled in spring of '04.
The Baby Phat brand came into existence when Simmons produced tiny tees emblazoned with the phrase "Baby Phat." The shirts became "hip" so quickly that the Baby Phat brand, and its first collection, was born.
Simmons' wife Kimora Lee, herself a model and hip-hop socialite, came on board as the creative director, giving the brand a sexy, confident image and a coy attitude.
Lesson #1. Reduce Flash and bring product up front
When BabyPhat.com launched ecommerce in 2001, the first thing the ecommerce team did was simply to tag the URL in all print campaigns.
"They got a lot of traffic right out of the gate, with zero marketing, but the product was like 10 clicks away," Foy says. The site was also 100% Flash-based -- and had a conversion rate of .025.
By bringing the product one click off the home page and reducing the Flash element to a 10-second intro, the site improved conversions to sales by 40%.
Lesson #2. Soften sales pitches with lifestyle brand marketing
The site must balance lifestyle brand messaging with straightforward direct response offers. Bernt Ullmann, President of Phat Fashions, uses a consumer package goods analogy to explain: "If it was all about the product and no romancing, everything would just be sitting on a shelf in clear plastic. It's the same with lifestyle brands."
With Phat Farm and Baby Phat, "We're fun, we're sexy, we're happening, and you want to be part of it," says Ullmann. "Doing that well is very much part of selling the product, but it's not an aggressive sales pitch."
The current home page for Baby Phat, for example, shows a lifestyle shot of Kimora in a sexy dress, with sparkling jewelry, holding a big snake. There's also a product pitch: "Introducing, for a limited time only… The Diamond Diva. Numbered, Limited Edition, rose-gold Swiss chronograph. Click here to order."
But though the photo of the watch is large, it is clearly secondary to Kimora herself.
Lesson #3. Use sweeps for customer info
Whenever Ullmann does a sweeps -- whether it's for a signed pair of sneakers or a trip to New York for dinner with Simmons and Kimora -- the site gets an uptick in visits but not the corresponding conversions rates.
By law, consumers have to be able to enter sweeps even if they don't make a purchase. Most sites make it easy for nonbuyers to enter, hoping to garner email opt-ins from folks they can convert later. Ullman has learned to take the reverse tactic. To sign up without purchasing, you have to go through "an awful lot of clickthroughs" and fill out a form that requests phone, postal mail, and date of birth info.
It's useful for market research, plus anybody who'd take those extra steps might be interested enough in the brand to be worth continuing to market to (gathering more names for the sake of names alone isn't smart). "We get very educated about why someone is not buying and what it would take to get them to buy," Ullman says.
Lesson #4. Lifestyle brands go beyond apparel
"We make an absolute effort to convey the complete lifestyle on the Web," says Ullmann. In order to captivate visitors and make them want to don part of the personality of the celebrity, the lifestyle brand must include everything from underwear to outerwear to fine jewelry to hosiery, he says. "We're not just sportswear."
Naturally this also makes the sites more profitable because there are more cross-selling and upselling opportunities. Celeb Site #2: ShopJLO.com
Launched: Spring 2002; 2004 Visitors: 5.5 million; Average conversion rate: 1.5--2% Outside links: 108
Description: In 2001, pop singer and superstar Jennifer Lopez launched a signature collection of sportswear, JLO by Jennifer Lopez. The home page, as with Baby Phat, features a large lifestyle shot with a left navigation bar for shopping.
Lesson #1. Use online to solve offline retail problems
Initially, the JLO site had a 33% merchandise return rate. If customers are returning online, they're returning at the retail level, as well.
But, Foy explains, department stores won't spend time looking for problems. "It's not the retailer's job to figure out why they're returning product. If it keeps happening, you lose real estate in the store, they don't work with you to figure out why."
With JLO's returns, the ecommerce team looked at every return to determine not only the style, color, and size, but which factory made it. They went back to the problematic factory, got the problem fixed, reduced returns to 13%, and increased their real estate in department stores.
Lesson #2. Fans may not need extra incentives to respond
When the JLO site ran an A/B test on a free shipping promotion, conversions from visitors who saw the promotion did not increase over visitors who did not see the promotion. "You don't have to [offer free shipping]," says Foy. "They're loyal."
Same goes for online surveys. When ShopJLO.com ran a five-question survey without the offer of a 10% discount, they actually received more responses than a previous survey when they included the incentive.
Lesson #3. When traffic peaks, so can conversions
Two months ago, when MTV ran a reality show on Jennifer Lopez, they included a fashion segment that was aired not only on MTV but on a variety of other networks.
You might imagine that, while traffic was sure to rise, conversions would fall as people simply came to the site to see the fashion photos.
In fact, the opposite happened. Conversions increased, in part, Foy surmises, because before the fashion show fans may not have known about JLO's clothing line.
Foy has noticed this phenomenon across all celebrity sites his firm manages. When traffic rises, conversions usually remain stable or rise as well. Whatever is driving additional traffic -- be it concerts, television appearances, or new album releases -- drives sales at the same or a higher rate.
Lesson #4. Create special offers for typical nonconverting demographics
A challenge with celebrity sites is the element of people who come just to look at the celebrity. JLO's ecommerce team gathers as much information through surveys and sweeps as possible to determine who isn't buying. They discovered that demographic least likely to convert was (surprise!) men.
So, the team invented male-targeted gift sets, "like shopping for dummies," Foy explains. There's also a live chat so the men can contact their personal shoppers for advice on what to buy wives and girlfriends.Celeb site #3. Orange County Choppers (OCC)
Launched: Marketing, 2003; ecommerce, fall 2004 2004; Visitors: 15 million; Average conversion rate: 2%+ (see below for details);Outside links: 272
Description: Paul Teutul Sr. fabricates custom motorcycles with his two sons, and together they have a popular show on the Discovery Channel. Orange County Choppers airs on Tuesday nights. The site sells parts, apparel, and gifts.
Lesson #1. Traffic and conversion rates peak after the show
As you would imagine, traffic to OrangeCountyChoppers.com peaks on Tuesday nights, Wednesdays, and Thursdays and then slowly drops until the following Tuesday night. Conversions lift by 30%-35% after the show airs Tuesday nights and then slide back down to 2% by the end of the week.
Lesson #2. New show or repeat: same difference
Traffic peaks after the show regardless of whether the show was a repeat or a new show. This raises hope for online merchandising opportunities for syndicated shows -- you don't have to be first-run to make eretail money.
Lesson #3. Product placement works
When a product is featured on the Web site that one of Orange County Choppers guys was wearing, conversions rise by another 20%-30%.
This rise indicates that it's worth keeping close ties between the show production team and site content team so the home shopping page can feature an "as seen on" shot in conjunction with air dates. Useful links related to this article
Creative samples from BabyPhat.com and OCC campaigns: http://www.marketingsherpa.com/cfs/study.html
Baby Phat: http://www.babyphat.com
OCC -- Orange County Choppers Shopping: http://shop.orangecountychoppers.com/shop.php
eFashionSolutions -- The online marketing firm that runs eretail operations for the sites above (and more, including Elvis): http://www.efashionsolutions.com
Web analytics eFashionSolutions uses for all sites (together):