Marketing Pilgrim

There were a few presentations from Internet Retailer about video that piqued my interest. Dave Witzig from ShopNBC discussed the impact of video on their highly successful ecommerce site and made some very strong statements that should be of interest to everyone.

1) Product videos should be your focus. ShopNBC has 6,000 1-3 minute product videos (representing half of their total SKUs). Focus on these videos primarily before going into other areas.

2) Customers that watch videos convert at twice the rate of customers who do not. Yes, you heard that right. That being said, he did not say what percentage of customers watch videos.

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Even though I am home, I will continue to write about the Internet Retailer conference over the next few days. Today, here are some thoughts about social marketing trends.

It is clear that internet retail is currently in love with the concept of marketing socially. If I heard one presentation about social marketing, I heard thirty. Of course, most of them were almost useless because here is a little secret. There are not many retailers selling hard goods that are having success with social marketing.

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Today, Internet Retailer released their annual Top 500 Guide that chronicles the online retail industry in general and the top 500 online retailers in particular. As I am listening to their presentation of the report, I am typing these highlights.

Total E-Retail revenue hit $166 billion in the US in 2007, representing 6.3% of total revenue. The top 500 online retailers accounted for 61% of the total E-Retail revenue. Total retail growth was at 3.8% last year while E-Retail grew at a much healthier 21.8%.

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I am at the Internet Retailer conference in Chicago this week. You do not hear much about this conference in the blog world for some reason. That is strange considering that there are 5,000 attendees and practically every major company in internet retail is represented here.

There is always a lot to learn from this conference, though you have to look for the nuggets. The keynote and major presentations are from leaders of major retailers. In my opinion, the chance of a retailer standing up in front of 5,000 competitors and giving away too much information is pretty slim. But at least, you can get a feel for where the industry is heading.

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After yesterday’s firestorm, I feel the need to clarify a few things and then explain what I mean by branding.

1) Was I linkbaiting? No. Telling the truth as I see it even when it is unpopular is not necessarily linkbaiting. I do have a small gift for provocative titles though.

2) Do I really believe what I said? Yes, every word. Some people seem to find it stunning that I would actually believe what I wrote. Trust me when I say I do believe it.

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According to Shoemoney, SEO has no future. I do not always agree with him, but in this case, he is dead right. Let me pull on my flame retardant suit before I explain why.

First, understand that the only reason SEO has ever worked is because search engines were not advanced enough to always show relevant information. I remember when I started selling online. At the time, I had only a few competitors in my industry and it was easy to beat them in the SEO game. It took only a few metatags and such, and within weeks, I was dominant.

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InternetRetailer.com reports that the highest conversion rates among major online retailers during March were the following:

Office Depot - 20.9%
QVC - 19%
VistaPrint - 18.3%
Roamans - 18.1%
Lands’ End - 16.2%
eBay - 15.7%
1-800-Flowers.com - 15.5%
eBags.com - 15.3%
L.L. Bean - 14.6%
Pottery Barn Kids - 14.2%

These conversion rates are through the roof when compared with industry averages. In fact, they are not even believable unless you understand what the most important driver of conversion is.

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I confess I am feeling a bit uneasy these days. These are interesting times to be in retail. Having been in business back in 2001, I know what a recession is like, but I also know that it is possible to survive and even flourish during bad times.

I remember sitting at my desk one morning going about business as usual. I happened to check Drudge and saw headlines that the World Trade Towers had been hit. At the time, I had just quit a consulting position and hired my first employee. My business was profitable but just barely.

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According to the National Retail Organization, online retail should grow to $204 billion this year, which represents a 17% increase over last year. (Many experts predicted a 20% increase in 2008.) Considering the economy is in a slump, this is very welcome news to online retailers. I personally am not surprised. At Vitabase, our first quarter was up very dramatically over the same period last year.

As is normally the case, the top categories for online retail include apparel, electronics, and cars.

I am especially interested in some other data in the report. For example, 53% of online retailers are spending their marketing budget on customer acquisition while 21% are more focused on customer retention.

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According to Jupiter Research, only 2.6% of online shoppers use blogs for research before making purchases. Of course, that makes some internet retailers wonder if blogs should be part of their marketing strategy.

In my opinion, this study does not provide the answer to that question. It merely indicates that people do not research products on blogs. I have no doubt that this is true. It seems obvious that if shoppers want to research, they are going to go to highly authoritative sites. However, that does not mean that blogs do not offer marketing opportunities, and I know for a fact that blogs do generate sales.

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Zappos has decided that it wants to be known more for customer service than discount pricing. It is eliminating its free overnight shipping guarantee as well as a guarantee to refund 110% of the difference between its price and a lower competitor’s price.

If you are not familiar with Zappos, they sell shoes and other clothing and are one of the largest online retailers (#31 according to Internet Retailer ). They also own a few other sites such as 6pm.com which is more of a discount clothing store.

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1-800-Flowers has launched BokayMe.com, a site that allows people to send virtual flowers to each other. The service is free for basic bouquets and up to $3 for enhanced bouquets.

I am 35, and starting to feel very out of touch. I can just imagine how my wife would react to virtual flowers. It reminds me of the guy in college who went around selling fake flower corsages (he claimed that his girlfriend never complained).

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