THE STUDY OF ON­LINE SALES STRATE­GIES

The Denver Post - - FRONT PAGE - By Ta­mara Chuang

The three se­crets to im­prov­ing cy­ber sales: Test­ing, plan­ning and ex­per­i­ment­ing.

A day af­ter Black Fri­day — and its best Thanks­giv­ing sales day ever — Deny De­signs de­cided to do some­thing rad­i­cal: Stop dis­counts for two days. The the­ory was that a sale wasn’t nec­es­sary, es­pe­cially af­ter of­fer­ing a 50 per­cent dis­count for four hours on Thanks­giv­ing.

“Is it more ben­e­fi­cial to do a sale from a prof­itabil­ity stand­point or have full price for those two days? Maybe our top-line rev­enue won’t be over­whelm­ing, but our prof­itabil­ity will out­per­form,” said Dustin Ny­hus, CEO and co-founder with his wife Kim of the Den­ver home-decor site that puts artists’ de­signs on shower cur­tains, du­vet cov­ers and even back­yard bean bag toss sets. “That was our bet this year.” Les­son learned, Ny­hus said. With three times more traf­fic than a nor­mal week­end, the rate of pur­chases “un­der­per­formed,” he said, “be­cause ev­ery sin­gle re­tailer was of­fer­ing the same dis­count through the en­tire week­end. In hind­sight, it prob­a­bly wasn’t the best idea.”

Deny De­sign did see growth on other days. Its Black Fri­day sales did bet­ter than ex­pected, which mim­ics what hap­pened with U.S. on­line re­tail­ers ev­ery­where. Na­tion­wide, Black Fri­day on­line sales sur­prised an­a­lysts be­cause it’s typ­i­cally a lowkey day as shop­pers head to brickand-mor­tar stores for the deals. Heavy dis­counts at­tracted bar­gain hunters. And more peo­ple shopped with mo­bile de­vices, though most pur­chases were com­pleted on a com­puter.

But growth, lo­cal re­tail­ers say, wasn’t just be­cause con­sumers are more com­fort­able shop­ping on mo­bile phones, tablets and com­put­ers. Nor was it due only to the pent-up de­mand fol­low­ing the Nov. 8 elec­tion, which re­ally in­ter­rupted the re­tail world. (Adobe Dig­i­tal In­sights recorded a 17 per­cent drop in on­line sales the day af­ter the elec­tion.) Like oth­ers, Deny De­sign’s sales and traf­fic growth im­proved thanks to test­ing, plan­ning and ex­per­i­ment­ing.

“We found that in the past, the daily av­er­age goes up (with an ex­tended sale) but it’s al­most bet­ter to do a one-day sale. It puts that ur­gency into our cus­tomers,” Ny­hus said. “We’re re­ally gun shy with do­ing sale af­ter sale af­ter sale, and hold­ing sales for too long. Our cus­tomers need to know it’s the end of the sale. For ex­am­ple, (on Cy­ber Mon­day), half of our rev­enue came in dur­ing the last two hours of the sale. They need a dead­line.”

Bil­lions spent again

Cy­ber Mon­day, in­vented by the Na­tional Re­tail Fed­er­a­tion’s Shop.org in 2005, still ranked as the big­gest on­line sales day this year, ac­cord­ing to Adobe Dig­i­tal In­sights. Adobe, which gath­ered ac­tual data from con­sumer vis­its and pur­chases to its net­work of 4,500 on­line re­tail­ers, said shop­pers spent $3.45 bil­lion on Cy­ber Mon­day, up 12.1 per­cent from last year. That was just a sniff more than the record $3.34 bil­lion con­sumers spent on­line on Black Fri­day, which was up 21.6 per­cent.

“His­tor­i­cally, the num­ber one rea­son (peo­ple shop on­line) is free ship­ping, great prices and dis­counts,” said Becky Tasker, Adobe’s man­ag­ing an­a­lyst. “But there was an in­ter­est­ing surge with the con­ve­nience fac­tor.

More cus­tomers said they shopped on­line for prod­uct va­ri­ety and avail­abil­ity and not hav­ing to stand in line with crowds. As more be­come com­fort­able on­line, they’re also will­ing to pay a pre­mium for that ex­pe­ri­ence.”

An Adobe hol­i­day sur­vey of 1,000 con­sumers found that 25 per­cent were will­ing to pay more on­line, she added.

Ac­cord­ing to Re­tailNext, which works with more than 300 off-line re­tail­ers, traf­fic at brick-and-mor­tar stores de­clined 4.4 per­cent on Black Fri­day. Sales took a hit too, partly be­cause of huge dis­counts to lure shop­pers.

“Black Fri­day long ago mor­phed from just a sin­gle­day event. A few years ago, it be­came a week­end, then last year, it be­came a week­long event,” Re­tailNext spokesman Ray Hart­jen said. “This year, we saw Black Fri­day ads, par­tic­u­larly from au­tomak­ers, as soon as the Hal­loween dec­o­ra­tions got put away. Shop­pers are shop­ping ear­lier in the sea­son.”

Best day at eBags

Long­time lo­cal on­line re­tailer eBags said Cy­ber Mon­day was its best sales day since it launched 18 years ago. But it be­lieves growth came from spend­ing months test­ing pro­mo­tions, tweak­ing its mo­bile site and fig­ur­ing out how to make it eas­ier for mo­bile shop­pers to com­plete a pur­chase, said Peter Cobb, co­founder of the Green­wood Vil­lage on­line store that sells nearly ev­ery bag imag­in­able.

“The old days of mo­bile was you take your PC ver­sion and scrunch it down to mo­bile size. That just doesn’t work now,” Cobb said. “It’s a whole dif­fer­ent site. If you were on the prod­uct de­tail page (be­fore), you couldn’t see the en­tire prod­uct. Some of it stretched be­low the smart­phone screen. ‘Um, guys, you need to push that up. You can’t have peo­ple scrolling up or down. And where’s the price?’ ”

Like other on­line stores, traf­fic to eBags’ web­site was up 40 per­cent from last year.

A grow­ing num­ber — 46 per­cent of all vis­its — used mo­bile de­vices.

This year, eBags put its five most pop­u­lar items right in front of cus­tomers to make them eas­ier — es­pe­cially for mo­bile shop­pers — to see and pur­chase. Sales for those five items, in­clud­ing nifty pack­ing cubes, grew 65 per­cent from last year.

“We have this say­ing here, play­ing the hits. Fo­cus on the prod­ucts that sell. Ama­zon has the Echo and Dash. In your face power SKUs,” Cobb said. “That came from Mike (Ed­wards, eBags’ CEO) say­ing, ‘Why make peo­ple search for prod­ucts they’re go­ing to end up buy­ing any­way?’ ”

Brand aware­ness

Boul­der-based Sphero — which cre­ated last year’s “it” toy, the Star Wars BB-8 toy ro­bot — did a sim­i­lar strat­egy at Sphero.com, spokes­woman Claire Tin­dall said.

“There was a new pro­mo­tion each day, Black Fri­day through Cy­ber Mon­day,” she said. “This year we also switched up the mer­chan­dis­ing strat­egy on our site to drive peo­ple di­rectly to the deals. In 2015, our home page re­mained the same; we re­freshed it each day this year to match the pro­mo­tional con­tent.”

And shop­pers are get­ting ac­cus­tomed to who the re­tail­ers are and where they plan to shop. The ma­jor­ity of shop­pers picked their stores ei­ther by on­line search (38.5 per­cent, ac­cord­ing to Adobe) or by go­ing di­rectly to the store’s site (25.3 per­cent.) The lat­ter is im­por­tant be­cause that means cus­tomers knew about those stores ei­ther from friends, news­pa­per fly­ers or e-mail, Adobe’s Tasker said.

“Di­rect traf­fic is be­cause of brand aware­ness,” she said.

Ob­vi­ously, deals at­tract shop­pers, which is why eBags added a team this year fo­cused on deals. Through­out the year, the team met with its 900 brands to say, “There must be some­thing in the cor­ner of your ware­house that you want to move. We have a re­wards pro­gram with over 4 mil­lion peo­ple and some of them want bar­gains,” Cobb said. Sales of its “Steals of the Day” were up 104 per­cent for the long week­end.

“You kind of pull back and say, shoot, isn’t that ba­sic re­tail. … I have to ad­mit, we had sales in our e-mails and on our site that we prob­a­bly won’t run again,” Cobb said.

“Our cus­tomers need to know it’s the end of the sale. For ex­am­ple, (on Cy­ber Mon­day), half of our rev­enue came in dur­ing the last two hours of the sale. They need a dead­line.” Dustin Ny­hus, CEO and co-founder of Deny De­signs

Deny De­signs co-founders Dustin and Kim Ny­hus pose Thurs­day at the cou­ple’s new home-decor com­pany head­quar­ters in En­gle­wood. Deny De­signs puts artists’ de­signs on items such as shower cur­tains, du­vet cov­ers and even back­yard bean bag toss sets. RJ San­gosti, The Den­ver Post

Muham­mad Raza works on build­ing home goods Thurs­day at Deny De­signs in En­gle­wood. The com­pany sells home decor on­line. RJ San­gosti, The Den­ver Post

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