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Making an Entrance

BY CSA STAFF

You don’t need to speak Dutch to understand the beauty behind the latest online viral marketing campaign from Amsterdam-based department store chain HEMA.

The retailer, known for its affordable and high-quality generic housewares and goods, had expanded its bricks-and-mortar presence throughout the Netherlands, Belgium and Germany for several decades, but it didn’t offer an e-commerce channel until last year. So what better way to let consumers know of its new site than creating a welcome page that is one of the most uniquely engaging and innovative Web introductions the online retail world has seen in awhile: an animated site that brings its products to life.

When shoppers visit www.producten.hema.nl —a welcome site that introduces consumers to www.hema.nl —several products for sale appear on screen, such as cups, an outfit for a baby and packaging tape. But after the mouse is left on the page for several seconds, the cups tip over and roll about the page. A domino sequence then occurs and the page scrolls to follow the moving products. For example, one item bumps into and turns on a light (priced on the site at 7.95 euros) that shines onto a magnifying glass (1.95 euros). The light sparks a fire from the magnifying glass and eventually heats the teapot listed for sale above it. When the water in the teapot boils, the cork blows and the page scrolls back up to the top for more animated display. Along with sound effects, this action continues for about a minute until the final movement brings the viewer back up to the top of the homepage and confetti falls around the HEMA banner.

At the end of show—because that’s what it feels like—a question box appears and asks if you want to send the page to a friend, similar to that of an e-card. And just like that, an online phenomenon ignites.

In the first few weeks of the viral’s debut in October 2007, the site attracted more than several hundred thousand page views. People sent it to inboxes all over the globe, introducing not only the site but the brand to shoppers worldwide.

Many companies use viral campaigns as an inexpensive and creative attempt to lure attention to sites. But what makes HEMA’s approach stand apart from others that have taken similar steps in the past is that the style mirrors the very essence of what the company represents. The company calls it “special simplicity.”

HEMA, whose acronym translates into English to mean “Dutch Standard Prices Company Amsterdam,” is known for adding modern and somewhat designer touches to its products, which are made by and specifically for the chain. It aims to offer more than what consumers expect from generic items. And this is what beautifully carries through on both its site and the viral. It’s a new take on an old domino-effect gag.

The concept is the brainchild of Dutch advertising company CCCP, that worked closely with HEMA to make the campaign brand-recognizable.

Although shoppers can now make online purchases, the HEMA site does not offer shipping; customers must pick up their purchases in-store. This buy-online and pick-up-later strategy has already been popularized by companies such as Wal-Mart and Circuit City, but those retailers added it as an extra and convenient alternative for multichannel shoppers.

For HEMA’s site, however, it’s the only option right now. And this is its weak spot. The conversion results would have been remarkable if shipping had been made available at the time of launch.

HEMA said it is looking to expand its site by offering shipping in the future, but the company declined to mention time line specifics. When it finally happens, there should be another viral ready and rearing to go. The bar has already been set—and it’s certainly pretty high.

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Lampert, the Eli Manning of retail?

BY CSA STAFF

HOFFMAN ESTATES, Ill. The New York Giants triumph over the highly favored New England Patriots in the Super Bowl earlier this month, has become an example of coming from the bottom to win it all. Sears Holdings chairman Edward Lampert is one of the latest to use the Giants win, even going as far to compare himself, and the leaders of his company, to quarterback Eli Manning.

The Giants analogy, and Eli Manning comparison, is applied mainly to the company’s Kmart division. In a letter to investors, posted on the Sears Holdings investor relations Web site, Lampert said during Kmart’s bankruptcy in 2002, the unit was “like an undrafted free agent who nobody thought had a chance to play in the big leagues.” Lampert went on to say, “Like Eli Manning, we know what it’s like to be underestimated and questioned, but we intend to keep working on our game to achieve our full potential.”

Sears Holdings reported net income of $426 million, or $3.17 per diluted share, for the fourth quarter ended Feb. 2, compared with net income of $811 million, or $5.27 per diluted share, for the fourth quarter ended Feb. 3, 2007. For the fiscal year ended Feb. 2, 2008, net income was $826 million, or $5.70 per diluted share compared with net income of $1.5 billion, or $9.58 per diluted share, for the fiscal year ended Feb. 3, 2007.

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Circuit City investor seeks to replace board

BY CSA STAFF

RICHMOND, Va. Circuit City Stores today acknowledged that it has received two proposals from shareholder Wattles Capital Management regarding its board of directors. Wattles holds approximately 6.5% of the outstanding shares of the company’s common stock.

Circuit City reported that Wattles proposed the idea of replacing the company’s Circuit City 12-member board of directors with its own nominees. Circuit City said its board of directors will review carefully the shareholder’s proposals and the qualifications of the nominees in accordance with its fiduciary duties, mindful that the proposal would give the shareholder absolute control of the entire board, which would be disproportionate to its relative ownership of the company’s shares.

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