CASE STUDY: Selling Women Expensive Gifts Online

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ConsumerMarketingBiz formerly eMarketingtoHer
~~~~~~~~~~~~~~~~~~~~ April 20, 2001 - Vol. II, Issue 8

CASE STUDY: 10thAvenue.com Learns How to Sell Expensive Gifts to
Older Women Online

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CHALLENGE
Want to buy a hand-painted 19-inch obelisk for $3,235?
You're probably an older, affluent woman -- and 10thAvenue.com,
"a marketplace for the finer things in life," is the online store
targeting you.

Research shows that, when older women shop online, they strongly
prefer buying from name brands they already know and trust. But
when 10thAvenue.com launched in August 1999, it had no offline
retail stores, no catalog, no pre-built brand name at all. Plus,
the site's products were, for the most part, handcrafted items
such as African art, that also weren't famous-name branded.

How does an Internet pure-play reach these older affluent women,
and convince them to buy fairly pricey items?

CAMPAIGN
VP Business Development Jordan Siverson says, "We've
tried everything, banners, print ads, affiliate programs,
keywords...."

The site's initial launch campaign consisted of a full-page ad in
Better Homes & Gardens magazine that featured several product
shots, the URL and an 800 number. At the same time,
10thAvenue.com tested banners just about everywhere women go
online, including AOL, iVillage, Women.com and Yahoo. Most
banners also featured product shots in order to generate targeted
clicks.

Next, Siverson paid for high-ranking search engine listings on
both AskJeeves and GoTo. He tested a wide variety of search
terms, from the very broad -- such as "gifts" -- to the very
targeted, such as "African baskets."

In early 2000, the site launched an affiliate program through
Commission Junction. After thoroughly researching the
competition, Siverson decided to set his base affiliate sales
commission at 12%. He says, "It's real competitive, so
affiliates will give 10thAvenue.com better placements on their
sites." To keep affiliates excited about the program,
10thAvenue.com occasionally emails them special offers, such as a
higher commission rate for a month, or free shipping coupons
affiliates can pass on to their visitors.

Recently the site has run print advertisements in highly targeted
upscale magazines in New York and California. 10thAvenue.com is
also testing the Internet Cash program, which runs on a
commission-only basis with no up-front fees. Internet Cash lists
several 10thAvenue.com products on its destination site.

Last but not least, 10thAvenue.com bought several similar URLs,
such as 10thAve.com, and redirected traffic to the right site.
Siverson says, "It's confusing, people hear our brand name and
they don't always know how to spell it."

10thAvenue.com uses five key tactics to convert its traffic into
buyers:

1. A strongly branded environment -- 10thAvenue.com commissioned
artist Paul Loven to create a series of pictures, which appear
throughout the site, to give it a strong personality and feeling
of "place." The images are highly romantic without lapsing into
cuteness. (They remind us of the style used in TV ads for
upscale wines.)

2. Superbly photographed products -- Siverson says, "We try to
have a really great picture. A picture can speak everything. It
can pull someone over the edge to become a buyer."

3. 100% satisfaction guarantee -- Siverson feels a strong, money-
back guarantee is critical to the site's success. He says, "If
you buy a piece of art and it doesn't look as you imagined on
your wall, you don't want to be afraid to send it back."

4. Prominent 800 numbers -- The Company's toll-free phone number
appears in large numbers in a prominent position on the upper
left hand corner of almost every page of the site.

5. Fast replies to emails -- 10thAvenue.com uses the Touchscape
CRM system to reply to all emails efficiently and quickly, while
databasing the information learned. Siverson says, "The more we
use it, the smarter it gets. It also reduces our need for
staff."

10thAvenue ships all products in attractively designed boxes that
continue the branding job the site began. Sometimes a free gift
is also included, such as an Aquis facial mitt.

RESULTS
At a time when other consumer sites are in trouble,
10thAvenue.com is "very close to profitability." Is it possible
to sell $3,000+ hand painted obelisks online? Siverson says,
"Yes, there are a lot of people who will buy them. We're not
really worried about the price of anything, just as long as the
products are unique and something you can get good pictures of."

Approximately 15% of the site's current sales are to repeat
customers, and that number continues to rise.

Siverson learned a lot of lessons from his marketing campaigns.
He says, "Now we can cut advertising costs and become even more
effective by targeting the advertising we do." Here are some of
these lessons:

- Better Homes & Gardens ads are expensive, but they pull a lot
of response. (In fact the ad run in late 1999 is still pulling
occasional enquiries today.) Unfortunately many of the women
responding didn't want to shop online -- they wanted to know when
they could get a print catalog. Siverson says any future ads in
national magazines will run in the areas devoted to Internet
topics instead of general interest areas.

- Banners were not overall winners. Now Siverson only runs
banners linked to specific keywords on Yahoo, or through his
affiliate program.

- More than 12,000 affiliates have signed up for the affiliate
program. The ones which have taken the next step and added
10thAvenue.com's banners onto their sites are responsible for
driving more than 20% of the site's overall traffic -- resulting
in just under 10% of total sales.

- Paid search engine listings have been a real winner. However,
Siverson warns, "If I pay GoTo for the number one position for a
popular broad term like 'gifts' it's like throwing money out the
window. You're getting massive amounts of clicks, thousands an
hour at $1.50 each and barely any sales. It's better to use more
targeted keywords like 'bathrobes.' There's not any confusion
that they're going to a bathrobe when they click. It seems so
easy, but it really took a while to figure out."

- Although it's early days yet, the Internet Cash program appears
to be working well. Siverson says, "We just started last week
and already have had a few orders from it."

- The free surprise gift included with order has also paid off.
Siverson says, "People call just raving about it. Women love it.
That same customer will come back and buy more products from us."

NEXT: Due to popular demand, 10thAvenue.com will launch a print
catalog this summer. More than 20,000 women have already proactively
requested one.

http://www.10thavenue.com
http://www.internetcash.com
http://www.touchscape.com

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