Another BRIC in the e-commerce wall
Chicago — During a morning keynote session on Wednesday at the Internet Retailer Conference in Chicago, former Vice President and self-described “recovering politician” Al Gore related a couple of interesting facts about how the Internet is shaping modern commerce. First, he stated that when an online network increases in size its value increases by a squared amount, so that for example a network that doubles its number of users quadruples in value.
Second, he stated that Chinese e-commerce site Alibaba.com had a higher sales volume in the last quarter of 2012 than Amazon.com and eBay, although the combined financial value of those online retailers’ sales was still much higher. In short, the Internet is bringing the world closer together and also increasing the importance of consumers in the developing world.
Wendy Jones, VP of geographic expansion and cross-border trade for eBay Marketplaces, expounded on this theme further in a later unrelated session. Jones cited some sobering statistics on how e-commerce is increasingly becoming dominated by the emerging world and particularly by the four BRIC nations of Brazil, Russia, India and China. According to Jones, by 2015 91% of new Internet users will live in emerging markets and they will account for 55% of global e-commerce growth.
“The BRIC nations represented 13% of 2011 global retail sales compared to 2.5% 10 years earlier,” said Jones. “They are buying high-end luxury goods and services as a brand-conscious middle class emerges. These new consumers are in their mid-20s, affluent and highly engaged. They follow influencers and word of mouth is powerful when it comes from their network.”
In the case of eBay, in 2012 the retailer had 6 million customers in BRIC and other emerging markets who represented $3.2 billion USD in sales. Jones said eBay’s current highest priority is Russia.
“We are the largest B2C commerce player in Russia by volume,” she said. “In 2012 we sold $400 million of goods in Russia. We get 30,000 touches daily.”
To do online business in emerging markets, Jones recommended retailers follow one of three basic models: launch their own locally targeted e-commerce site, partner with a third-partner platform site (such as eBay) or partner with a local reseller that knows customs, laws and preferences.
Golfsmith coming to Fifth Avenue
New York — Golfsmith International will open a two-story, 15,000-sq.-ft. store on Fifth Avenue, near 38th Street, in Manhattan.
The store, opening on Friday, June 7, features three state-of-the-art club fitting studios with simulators that enable customers to test drive the latest equipment with the same technology used to fit tour pros. The store also has an indoor putting green and technology bar with GPS units, range finders and a variety of high-tech gadgets.
"Golfsmith’s second Manhattan store offers a truly world-class customer experience worthy of its Fifth Avenue address," said Golfsmith International president and CEO, Sue Gove. "This big and beautiful new location is unlike any other store in New York City – enabling consumers to try the latest golf equipment and gear right in the heart of one of the city’s most sought-after neighborhoods.”
Vera Bradley refines pricing, marketing with online insight
New York — Specialty retailer Vera Bradley has helped boost the revenue and margins generated by its recently launched line of baby accessories by obtaining advance insight from consumers about what they would pay for certain products and also what features most interested them.
In a session at this week’s Internet Retailer Conference in Chicago, Stephanie Scheele, senior director of intelligence for Vera Bradley, explained how her company benefited from using the First Insight cloud-based consumer analytics solution to help refine its go to market strategy for baby accessories.
“We had an 18-month go-to-market strategy and started using First Insight about 16 months out,” said Scheele. “We had no product designs or photos, so we used CADs to email customers and ask them what they would pay for certain items.”
Scheele said Vera Bradley explained to customers how important their insight was to the product launch and also used gamification elements by framing the questions as a game called “What Would You Pay?” One fact the retailer discovered was that customers were willing to pay a dollar more for a stuffed bunny toy than it had anticipated.
“We increased our revenue 8% in the indirect channel and 6% in the direct channel just from that one dollar increase,” said Scheele. “Overall, we increased our revenue 4% based on pricing changes from customer insights.”
In addition, customer comments helped Vera Bradley better target the marketing of its baby products.
“We had a baby bottle caddy and the number one survey question was whether it was insulated, which ir was, but we hadn’t included that fact in the marketing until that point.”
Scheele said Vera Bradley historically segments its customers to ensure the proper consumers are reviewing the proper items and also still runs as many as nine online insight programs at any one time. Insights are closed after receiving 200 responses, which can happen in as little as an hour.