Free shipping, used wisely, could pay off
Frugal holiday shoppers will be happy to know that more and more retailers are looking into offering free shipping as an incentive to order from their online stores, but retailers need to carefully plan such promotions and be selective about when they offer deals and to whom the deals are offered, according to Free Shipping Report: Benchmark Data and Analysis for E-mail Marketers, a study from New York research company Experian CheetahMail.
The study found 70 percent of respondents across all industries had higher conversion rates on e-mails offering free shipping than on other types of marketing e-mails. Of that 70 percent, 78 percent saw increased transaction-to-click-rates (defined as the total number of transactions divided by the number of unique visitors clicking on the e-mail), and 47 percent had higher average order values in free shipping e-mails compared to other marketing e-mails.
To create the most profitable and successful free shipping e-mail campaign, Experian suggests that retailers:
Feature the right products. Free shipping on overstocked items tends to perform poorly.
Limit free shipping offers. Constantly running free shipping offers may dilute their effectiveness.
Segment the e-mails. Divide the subscriber list into groups of customers based on their product interests, then offer those groups the products with free shipping.
Retailers may also look to the second annual Holiday Free Shipping Day, slated for Thursday, December 17, 2009, to generate traffic. Free Shipping Day represents the last possible 24-hour period when online shoppers can place their orders with guaranteed delivery by Christmas Eve and aims to extend the online holiday shopping season, which typically peaks in early December because consumers are concerned about their gift orders arriving to their intended destination in time for Christmas.
FreeShipping.org allows consumers to find online retailers that offer free shipping deals. For larger merchants, the event provides an additional forum to increase sales without having to draw customers into their physical locations. Some small online retailers set a single-day record for traffic because of their participation in 2008.
Men’s underwear and the economy: the skinny on skivvies
Shampoo, toothpaste, socks and undies - all mainstays of recession-proof items, right? Not quite. In fact, the sale of men’s underwear often correlates with the state of the economy. When times are good, boxer shorts, briefs, bikinis and, of course, the occasional thong hold steady sales, as they are - by the American standard definition - a necessity. But during times of severe financial strain, men will try to stretch the time between buying new pairs, causing underwear sales to fall, according to Ylan Q. Mui’s August 31, 2009, article “Blue chip, white cotton: what underwear says about the economy,” in The Washington Post.
“It’s a prolonged purchase,” said Marshal Cohen, senior analyst at Port Washington, N.Y., research company The NPD Group. “It’s like trying to drive your car an extra 10,000 miles.”
The growth in sales of men’s underwear began to slow in 2008 as the recession took hold, according to Chicago research company Mintel. In 2009, sales are expected to fall 2.3 percent, the first drop since the company started collecting data in 2003. However, Mintel predicts that next year, men’s underwear sales will fall by 0.5 percent, and a slowing of a decline can be a welcome step in the right direction.
According to Mintel, men buy an average of 3.4 pairs of underwear in a year. But from 2004 to 2008, the proportion of men buying single pairs at a time increased from 5 percent to 8 percent, while the share of men opting for packs of four or more fell slightly, from 68 to 66 percent - indicating that shoppers may be trying to save money by buying only when necessary.
Cohen said he hopes the recent positive signs in men’s underwear will spill over into other need-based purchases. Shoppers may be reaching a point where their stuff is simply worn out, providing an incentive to return to the stores.
There are other telltale items analysts look to as economic status indicators, such as an increase in the prescriptions of antidepressants and sleep-aids, but nosing through the medicine cabinets isn’t nearly as much fun as peeking into the underwear drawer.
Tokyo café puts product samples on the menu
Australian promotional space company Sample Labs has merged product testing with real-world business in Tokyo at Lcafé - a first-of-its-kind marketing café that operates just as any other trendy hangout spot for the young and affluent Japanese but that rewards customers with access to targeted sample and promotional products, according to Miho Inada’s August 24, 2009, article, “Tokyo café targets trend makers,” in the Wall Street Journal. Replacing the notion of a simulated store setup, registered customers, who spend their own legal tender on the usual hip coffee- and snack-bar fare, are given tokens that they can redeem at the sample bar to try new products.
To receive tokens, customers must register via mobile phone and provide personal information including age, birthday and marital status (nicknames and imprecise addresses acceptable). Lcafé opened in July 2009, and after less than two months had 2,000+ members. Registered members are given a bar code that shows up on their mobile phone, which serves as a membership ID and helps Sample Lab track who receives what samples. Sample Lab later questions members about items they tried, and those who answer the electronic survey are rewarded with extra tokens.
Faced with pressure to reduce costs amid a global economic downturn, Japanese advertisers are turning to targeted promotions like samples, and it is more affordable than television ads or glossy magazine spreads. Sample Lab estimates it costs about 150,000 yen (1,590) for displaying samples at the sample bar and distributing up to 1,500 items for two weeks. Collecting feedback on samples and analyzing it costs about 625,000 yen.
The Lcafé caters to Japanese women in their 20s and 30s; the ratio of female to male customers is 9-to-1. Among the companies peddling their products are Refresh Time, a vitamin-infused drink by House Wellness Foods Corp.; pretzel sticks with flavors such as cheese, apple or tomato; and assorted skin care products.