“Yahoo! on Thursday said a special three-day sale it offered last week produced a 25 percent increase in gross merchandise sales over normal levels on Yahoo Shopping. The company…said that some of its merchant partners saw its sales spike as much as 500 percent over normal levels.”
Here’s what raised my eyebrows and made me take note:
Firstly, it’s important to make the distinction between low prices and a sale. The e-commerce component of the past was all about undercutting both offline and online competitors. Dirt-cheap transactions that resulted in losses to the company were excused as a means (the accumulation of eyeballs) to an end (IPO, advertising revenues).
The appearance of the traditional SALE however, is a sharp indicator that there is a normalization occurring – a bridging of the gap between bricks and clicks. A sale is a temporary or time-sensitive occurrence, which sends out a message that “these great prices won’t last.” It’s no different from the famous Home Shopping Network “stocks are limited” bait or classic DRTV “call in the next 20 minutes and we’ll throw in an extra one FREE” hook. Don’t knock it, it’s what keeps America rolling.
Another interesting point was that this sale was promoted using offline print. Speaking to an “offline” audience in a familiar tongue will help drive traffic to the Web and facilitate increased sales. I think we can expect similar undertakings in the near future, and don’t be surprised to see direct-like TV commercials doing the same.
The Internet sale (if properly promoted) also hints at the potential to ramp up to a defining Web Event – positioning itself nicely to join the likes of the Sports Illustrated Swimsuit or Victoria Secret proceedings. These types of ultra-reach magnets, most closely comparable to the Super Bowl, the Oscars or the World Series offline extravaganzas, have been somewhat elusive to the Web up until now.
Another encouraging sign was the participation of traditional brands. This will go a long way towards legitimizing both online purchases, as well as the Internet Sale. This isn’t to say that smaller or pure-players don’t have a place. A purchase from a Yahoo! store is underscored by the seal of approval that comes with being a Yahoo! merchant.
As the consummate “newbie” experience, AOL needed to overcome the challenge of higher perceived risk amongst less experienced consumers. This hurdle was partly met through the power of brand association (by carefully partnering with recognized retailers and shrink-wrapping it in AOL packaging) as well as by utilizing familiar “offline” techniques such as a 100% satisfaction guarantee or live 24 hour assistance through IM, phone or email.
AOL has been ramping up its Shop@AOL offering to form a core part of its total member proposition. Reflecting bundled commerce’s value is reflected in AOL’s member spending, which increased 80% from the prior year to $2.7 billion.
AOL is now looking to expand its "Deal of the Day" on its welcome screen, which would be the equivalent to the loss-leading cover of a weekend newspaper insert or the appearance of a gondola-end type special in a store or store-window.
More and more companies are embracing familiar retailing mechanisms in order to stay competitive. With its “Buy it Now” option, eBay is as much a retailer today as it is an online auctioneer. Yahoo! and AOL are demonstrating the promise of accumulating eyeballs and being able to leverage this community to bring in much needed revenue. Unfortunately, not many players were able to get to this point.…
- Joseph Jaffe is Director of Interactive Media at TBWA\Chiat\Day in New York, where he works with clients including Kmart, ABSOLUT Vodka, Samsonite, Embassy Suites and Cunard. His primary focus is to highlight interactive's value and benefit in meeting his clients' integrated business and branding objectives.