Retailers capture buyers online with advanced technology

Westchester County Business Journal, Jul 25, 2005 by Stableford, Joan

During the past decade, retailers have developed their online stores into sophisticated portals and Web sites to generate more sales and build more awareness of their brands and products.

Online retailing has come a long way since the 1990s. Online retailing generated $90 billion in revenues in the United States last year compared with just $8 billion in 1998, according to the McKinsey Quarterly, 2005. Direct retailers with physical stores captured 52 percent on Internet sales in 2003, while those without stores, just 32 percent.

White Plains-based Lillian Vernon, a 54-year-old personalized gifts and home goods specialty catalogue company, has been selling its merchandise online for the last live years.

Officials of the privately held company, owned by Direct Holdings Worldwide Inc. since July 2003, refused to provide overall sales figures and, in particular, sales figures from its online retail site, www.lillianvernon.com. According to Hoover Direct, overall sales for Lillian Vernon in 2003 were $238 million and they shipped 4.2 million orders.

"Our sales from our online site are growing rapidly," said Peter Shapiro, senior vice president of e-commerce at Lillian Vernon. "We expect our sales figures from our online site to he more than 50 percent or our sales by the end of this year."

The online sales increases are attributed to getting more traffic to its site. Lillian Vernon did this in various ways, mainly by adding more capabilities to its new Web site this year, Shapiro said.

SEARCH ENGINES PLAY BIG ROLE

One way is through an enhanced targeting engine. Every time a person shops on the Web site, Lillian Vernon tracks the history of what the shopper buys and what types of merchandise a person views in detail, Shapiro said. The next time the person goes to the site, the Web site engine remembers what a shopper purchased and what types of merchandise the shopper was interested in. The next time they land on the Web site, those types of items will be automatically highlighted on the home page.

Many online retailers and companies that use their Web sites to sell products use this sophisticated and advanced technology to get the potential buyers right where they want them to be and to capture their attention right away.

"They (online retailers) are capturing more data about you each time you make a purchase. It can be a little unnerving when you sign on to their site and up pops 'welcome back, George Jones,' " said Norm Jacknis, chief information officer of Westchester County government.

And, with these advances in back-office software programs, companies can create even special options for you and you alone on their sites as soon as land there again, Jacknis said. The best examples of this advanced technology are the online retail powerhouses, such as Amazon.com and other specialty sites such as Lands' End.

"They know by your recent purchases what you might be interested in and get you right there. It becomes real-time analysis," he observed.

Shapiro said his e-commerce team at Lillian Vernon is constantly revising offerings and ads on its Web site, after reviewing and testing different techniques. For example, it might run the same ad for a child's product on different pages and in different categories. After an analysis of how many consumers hit on that ad and which ads produced the most sales, the team will change its location and format to the one which produced the most sales.

With the new Web site, Lillian Vernon has also added functionality enhancements for displaying the numerous products. In. the improved version, a shopper can zoom in and check out the actual color choices and even minute details about the product.

Another way in which Lillian Vernon is fine tuning its marketing program directly to the consumer is by enticing the online consumer to sign up for e-mail as soon as they bit on the home page, Shapiro said.

"This allows us to be smarter marketers. We can send you weekly e-mails, if you agree, about specials and products that you are interested in," Shapiro said.

This is known as a RSS syndication Web browser, a capability whereby every time something new appears on the Web; site, the company can alert its regular customers by sending an email to them automatically, Jacknis noted.

Smaller and medium-sized businesses can even use this browser to keep their Web sites continually fresh. Companies need to offer the browser something new every time they hit on the site, he stated.

Lillian Vernon has also made sure that it will turn up real fast when a consumer uses the major search engines, such as Google or Overture, when. searching for particular products.

The company has also a popular affiliate program, whereby a mom-and-pop company allows small Lillian Vernon ads to appear on its Web sites. Every time a person clicks on this ad, it links the potential consumer directly to the main Lillian Vernon Web site. If that consumer ends up buying merchandise, the mom-and-pop site can earn up to 3 percent of the revenue from that sale, Shapiro said.