Us Online Retailing Stimulates Consumption Not Just By Price Cuts

The New York Times online edition today wrote that after years of exploration, the US online retail industry began to get rid of the mode of attracting users solely by price cuts this year, but through various innovative ways to attract different kinds of consumers.

The following is the full text of the article:

Targeted preference

Despite online retailers' Christmas shopping season this year

According to data from the US market research firm comScore, after two years of slump, Internet sales in the first 47 days of the Christmas shopping season in the United States reached 27 billion 500 million dollars, up 12% over the same period last year, far exceeding the overall growth rate of the US retail industry.

Analysts expect the latter to increase their Christmas shopping season by only 3% to 4% this year.

But online retailers are now calculating the incentives to protect margins.

In the past two Christmas shopping season, these companies are actively promoting products, hoping to increase sales and digest extra inventory.

The era of one-time discounts of 40% is gone forever.

On the contrary, today's offers are very targeted, such as buying a woolen shirt at a discount, a full 100 dollars for earrings, and a "mysterious" discount only when checking out.

These promotional activities try to shape users' shopping habits.

some

"The reason for these different promotions is not just direct price cuts or discounted promotions, but also because of different motivations."

Drugstore.com chief

Performance will not drop but increase.

Online shopping discounts have declined.

According to MyBuys, a precision marketing company, in November this year, the total net income of us online retailers increased by 52% over the same period last year.

However, the reduction of discount does not affect network sales.

According to the National Retail Association, over 1/3 of purchases were conducted through Internet channels this year, compared with 28.5% last year.

Fiona Dias Fiona Dias, vice president of strategy and marketing at GSI Commerce, the US e-commerce solution provider, believes that the reason for this is that even solid store shoppers are now very satisfied with online shopping.

The exuberant demand means that online retailers may not be able to attract users through price cuts.

"The sales situation of all enterprises exceeds their expectations, which is why we will not see the reason for the half off promotion."

Speaking of his client, Dias said.

During the recession, online retailers are attracting users by means of price wars.

Considering the current strong position, these enterprises are trying to guide users to get out of this mode of thinking.

"You need not be treated equally."

Melissa Joy Manning (Melissa Joy Manning) runs an online jewelry store named after herself. "Sometimes we have to stop and try to go back to the way it used to be because if people are still offering a discount of 20% or 50%, they will change the long-term trend of the market so that it is hard to go back to it," she said.

She herself has stopped the discount activities, but will still provide a pair of silver earrings for the user who buys 100 dollars.

"Our resources are limited, so we must try to provide creative concessions."

She said.

{page_break}

Like Manning, other retailers are offering some unique and targeted concessions.

"The problem is profit margins."

Menswear website Bonobos co founder and CEO Andy Dunn (Andy Dunn) said.

In December, 1/3 of its revenue came from promotional products, but this year it dropped to 1/4. But he expects total revenue in December to be 3 times higher.

"The need for big promotions has been reduced," he said. "At the same time, we think we need to make better promotion."

So he gradually reduced the discount rate. For example, he only provided 20% of the shirt discount for those who bought the wool pants but did not buy them.

"We need not treat each other equally."

He said.

More innovative models

Drugstore.com also changed the way of promotion according to the different users.

A discount of $30 or $5 can help users increase page views.

"If a new Drugstore.com user doesn't know I sell toys and games, will he think I have a Razor scooter here?" he said. "I have to stimulate you to go around."

He said that if he wanted to increase his overall sales volume, he would use a discount instead of a full sale of 10 dollars.

The reason is: "there will be a lot of people coming here to buy 10.01 dollars, and then they will never return."

Other retailers are also trying to stand out.

Bloomingdales.com launched a program called "mysterious savings" last week.

In the plan, Bloomingdales.com sends a code to the users in the email list, offering a discount of 10% to 40% when the user checks out.

Bruce Berman, President of Bloomingdales.com, said: "people will think," maybe I can win the lottery, "said Bruce, President of Bloomingdales.com.

Thus increasing the purchase rate.

This strategy helps Bloomingdales.com stand out.

Just the day they sent the email, the online retailer Saks Fifth Avenue also launched a promotional campaign called "mysterious sale", but Saks Fifth Avenue declined to comment.

However, Berman said: "this can even inspire our potential, because all users who are shopping on our two websites will say," I have already tried. "

Temporary change strategy

Sometimes, a retailer may attract too much Internet sales because of its success, and must temporarily change its strategy to maintain profit growth.

{page_break}

The US apparel website Gap originally planned to launch a 4 day sharp price cut after Thanksgiving, but Toby Lenk, the company's direct selling director, said: "(Friday's sales exceeded our expectations).

So we stopped sales on Monday.

Because of the demand of manufacturers to prohibit brand discount, some other retailers have to promote through new strategies.

"In last year's discount activities, suppliers think we sell their goods at a low price."

Peter Labore, Backcountry.com Pete Labore, a US online retailer, said.

Therefore, the company has introduced a new preferential measure by way of "self financing", which is a gift coupon of $20.

The privilege Mail says, "it is completely free to use."

At first, some users did not seem to believe this privilege, so Backcountry.com sent an email two days later: "really free to use."

However, such coupons will not be sent aimlessly, and they will also selectively distribute users.

But this does seem to be a good way.

So far, Labore said, the measure has been profitable, with most customers buying more than 20 dollars.

"We are trying to get rid of the" reduction, reduction and reduction "mode, which is a different way of implementation.

He said.