The Slanket

The average eCommerce site has a 3-6% conversion rate. Most retailers know this. And so, when they want to increase online revenue etailers spend heavily on ad words. But instead of constantly increasing size of the pie why not focus on increasing conversion? After all, if 94% to 97% of visitors are not buying you’ve got bigger problems. There are 2 reasons this could be happening:

– The site experience is so awful that visitors, though motivated, choose not to buy.
– The SEM program is pulling unrelated/unqualified/uninterested traffic.

SEM tends to give diminishing returns once optimal ‘findability’ (Thanks Aaron) has been achieved. This, unfortunately, is how SEM works independent of your product type, market category or target demo.

The Slanket is an exceptionally smart product that many people might be looking for online. For Slanket SEM is a good idea. TJ Maxx is a retailer that does not sell online, they don’t even showcase their products online, SEM for them is a bad idea. I know for a fact that TJX spends millions on SEM and as I was looking for those numbers I saw an SEM activated advertisement, presented below:
TJX

How does a search query for “TJX online budget” relate to Budget car rentals? More importantly what are the odds of someone actually clicking on the ad and renting a car?

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Discovering New Categories

Have you ever walked into a Foot Locker outlet and asked the sales associate for a pair of vegetarian shoes? Neither have I. But did you know vegetarian shoes is the fastest growing category on zappos.com?

zappos.jpg

So, why didn’t Foot Locker this of this category first? After all they are a profit driven company.

The truth is that Foot Locker never knew people wanted vegetarian shoes and there was no way for them to find out. The reason this category works on zappos.com is because the incremental cost of creating a new category online is zero. For Foot Locker, on the other hand, adding this category would mean dedicating shelf-space on multiple retail locations to serve the 50-60 odd people who inquire about such products at each store. Online, these pockets of mild demand can be woven together to create a rather profitable category.

PS: I heard about this vegetarian category at a talk by Chris Anderson at Ad:Tech.

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