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Small business Q&A: 'Laser' selling on the Web
By Pat Curry
Bankrate.com
Bear Creek Corp. is one of direct marketing's
big dogs.
The Medford, Ore., firm is parent company to
both Harry
and David, the nation's premier direct marketer of fruit, and
Jackson
& Perkins Roses, the world's largest grower of roses and the
first mail-order nursery. The company also includes Northwest Express,
a clothing, gift and home furnishings catalog. Bear Creek's nationwide
operation includes mail-order, retail stores and Web-based catalogs.
Here, Senior Vice President of Internet Marketing
Ken Wells shares some of Harry and David's strategies for building
a premium brand, successful Web site design, and increasing the
average sale.
The principles have their roots in two brothers,
Harry and David Rosenberg, who refused to let their company die
when their business model -- selling premium fruit to grand European
hotels -- fell apart during the Great Depression.
They packed up their produce and headed to New
York, where they convinced the heads of industry that their Royal
Riviera pears were the perfect business gift. They went back to
Oregon with 400 orders and a determination to create 400 satisfied
customers.
The principles that worked for the Rosenberg
brothers made them big, but if you're a small-business owner, you
can likely apply some of their ideas to create satisfied customers
of your own.
Q. Harry and David
is a significant player in a competitive niche market. What do you
see as the major source of your company's success?
A. One of the
things that benefits us in a huge way is that we've been a direct
marketer for more than 65 years. We do more than 80 percent of our
business as holiday gifts. We understand the whole nature of gifting
and giving.
Q. A lot has been
written about letting customers choose the channel they use to buy
from a company. How do you view the Web as a channel for your customers,
and how do you cross-market between your channels?
A. We're doing
about 25 percent of overall business online now. We look at it as
another channel. It opens up a world of new customers we may not
be circulating catalogs to. We want people to shop online; we save
$4.90 on every order processed on the Web because we automatically
upload 97 percent of our orders -- no human intervention has to
occur. We mail out about 80 million catalogs a year and our URL
is prominent on every page of our catalog. We have catalog express
shopping on the site to make it very easy to type in an SKU and
go right to the item.
Q. Are there significant
differences in the way people shop on the Web site and the way they
use the catalog?
A. Yes. Catalog
shopping is more browsing. We have a reputation for rich, lush photographs.
People linger over the pictures and flip back and forth through
the pages. On the Web, it's laser shopping. The average order size
is smaller on the Web than the catalog -- I think that's the nature
of the customer and the nature of the medium. That affects our marketing
and merchandising. Although the average order is less on the Net,
those customers who use this medium come back and shop from us more
often. When you look at lifetime value, it equals out.
Q. Still, there's
a lot to look at on your site and some great bargains. Do people
spend a fair amount of time browsing online?
A. People are on
the site a long time. We're looking at whether they're there for
a long time because they want to be or because the checkout takes
a long time. I'm not sure if it's good or bad.
Q. You mentioned
your reputation for lush images in the catalog. Is that equally
important on the Web site?
A. The trade-off
is design vs. functionality. We're a big believer in keeping the
home page clean. We want people to be able to see those lush images,
but we want fast page loads. We want people to be able to find the
items they want and get out. We don't find "gee whiz" to be useful.
We keep it simple and have fast page loads -- we cut that to about
four seconds this holiday season, which is pretty good considering
the volume of traffic we had in December.
Q. What's a common
mistake that catalog and online retailers make in merchandising
their products?
A. I think people
try to put too much in front of you. The product gets lost. We use
a hero product -- when you look at a spread in a catalog, it's a
feature product. You'll put a hero or feature product, then product
surrounding it. Say you're selling roses, around it you'll have
the gardening gloves and pruners. I think designing for the Internet
home page is a little more like designing advertising than a catalog.
I say the same thing about HTML e-mail. If there's too much copy,
you don't read it. If there's a call to action right there, you
get my attention. The biggest design issue is people try to say
too much in too small a palette. You've got to look at the stats
about how long a customer will stay at each page. You really have
to use all the stats are that are available.
Q. Online retailers
are reporting shopping cart abandonment rates of 65 percent and
higher. What do you do to address this issue at your site?
A. If you're not
converting visitors, you really need to take a look at the shopper
experience. I try to look at everything from a consumer point of
view -- page load time, images. For me, the key thing about Internet
shopping is convenience. If you're not providing convenience, why
would you shop online?
Q. A recent article
indicated that a big part of the problem comes from shipping information
that comes late in the checkout process. How do you handle that?
A. We have links
to the shipping table -- the cost is linked to the dollar amount
of the order instead of weight -- so people can get the feel pretty
early.
Q. What is the
Harry and David approach toward customer communication?
A. Anytime you
communicate with your customer, give them the opportunity to buy
something else. We do a lot of customer service communication. We
give you order notification immediately. We have shipment notification,
and we have a link to allow you to track your shipment. With each
of those notifications, we'll put a link to the site. We'll ask
things like, "Looking for a last-minute gift or a hostess gift?"
We make it very easy to shop.
Q. That sounds
like a great system. How do you monitor customer response?
A. We not only
watch our response rate, we really watch our unsubscribe rate. We
have an unsubscribe rate of about .3 percent. When that starts to
creep up, we pay attention to how much we communicate. Is it too
much? Next year we're launching an online surveying capability to
address it even further.
Q. No sale is complete
until you ask the customer if there's anything else you can do for
him, so let's finish this conversation by talking about up-selling.
What is Harry and David's strategy for increasing the average sale
amount?
A. Ours is rather
rudimentary. On the Web site, we are doing rules-based recommendation.
We'll be looking deeply into personalization next year -- Net Perceptions-type
stuff that is transaction-based. We have a lot of success with impulse
shopping in the call centers. It's very soft-sell. We're in the
gifting business, so we like to do our up-sells toward "How about
something for yourself?" If someone comes to us and purchases a
Tower of Treats, we'll ask, "How about a box of truffles just for
you?"
Pat Curry
is a freelance writer based in Georgia
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