Top lessons from hot etailers

Who needs a fancy, tricked-up website anyway? We’re online to sell. By EMILY ROSS.

By Emily Ross

On the world stage, it’s safe to say Australian etailers are not going to win any Webbys (the Oscars of the internet) anytime soon. The leading local online retail businesses prefer practicality and cost-effectiveness over innovation and cutting-edge web experiences.

One of Australia’s more successful niche wine sites, Winestar.com.au, which sells more than $10 million worth of premium wine annually, still operates its website using an off-the-shelf software program. It’s very basic and founder Bert Werden is happy with that. “Basic works,” he says.

The 10-year-old Winestar website has a customer stream from the 10,000 subscribers to Winestar’s weekly wine newsletter. It started in a bottle shop in the Melbourne suburb of Strathmore. The site averages two million page views per month and accounts for 88% of sales.

Winestar may only rank 15 on Hitwise’s Grocery & Alcohol category (week ending 28 July), but each Winestar shopper spends an average of $400 per transaction – proving it is quality, not quantity of traffic, that adds to the bottom line.

Werden (right) is confident his well-heeled clientele don’t want “bells and whistles” on their retail websites. “Older people get freaked out about the internet,” he says, adamant the Winestar no-frills strategy is the right one.

Winestar is planning a site upgrade to reduce the labour required for each order when the business moves to larger premises in inner Melbourne; however those changes are more about the back-end of the site rather than aesthetics – think user-generated delivery labels rather than a new-look website. This approach mirrors results from a 2007 InternetRetailer.com survey of more than 240 internet retailers.

The majority of online retailers are not focused on jazzing up their sites. Only 35% of online sellers surveyed use rich media, just 21% use videos and 10% use interactive catalogues. Most respondents were planning website overhauls, but the changes were more about product organisation and page navigation than new media experiences.

Another key development, according to Peter Noble, managing director of Citrus Design, is looking at ways to streamline the sales process and avoid “shopping cart abandonment”.

A classic example of simplicity at work is the thriving online site of the ABC Shop (Hitwise Shopping and Classifieds, Books rank seven, week ending 28 July). Very much your rudimentary clicks and mortar experience with no flashy displays, the ABC Shop site has just basic audio functions and a simple shopping cart system for all those customers ordering their ‘Choir of Hard Knocks’ CDs and ‘Robin Hood’ DVDs.

It has projected sales of $5 million for 2006-07 and is now the number-one selling outlet in the ABC Shop empire, ahead of even flagship stores in major shopping centres. The ABC Shop site will be overhauled later this year to offer video and audio downloads before the Christmas rush that last year saw 532,000 unique visitors for December 2006.

Other busy Australian etailers such as DVD retailer EzyDVD (Hitwise rank 22 for Video and Games), gift and homewares store Peters of Kensington (Hitwise rank seven for Department Stores) and bargain online department store Deals Direct (Hitwise’s number-one online department store) continue the no-frills shopping experience – list those document shredders, gold earrings and whitening toothpastes and move ‘em out.

Deals Direct co-founder Paul Greenberg likes to give his customers (one million unique visitors per month) what they are used to, an eBay-style web page and “miss-‘em and they are gone” daily specials emails. “It’s a moving feast,” he says.

The success of these simple, practical sites beg the questions, do fancy features really enhance a site and encourage extra sales? Are they worth investing in?

The Peter Alexander website is ranked number two in the Hitwise Apparel and Accessories category, and processes about 700 orders a day.

The site’s interactive catalogue is working brilliantly. This feature recreates the experience of flicking through a catalogue, with users clicking on the edge of the page and dragging left to turn overleaf.

To help generate traffic to the site, the company advertises in mainstream fashion press and leverages off editorial exposure and Peter Alexander’s gung-ho approach to publicity.

Alexander (pictured right, with Penny) treats the website as his number one shop, as it accounts for 20–30% of sales for the group, which includes 18 retail stores and has annual turnover of $40 million.

“We treat it like a store – it has a manager, it gets tidied every night, the window display gets changed,” says Alexander pragmatically. “I don’t want to have the flashiest, the most modern and slickest website, I want to have the easiest and most enjoyable.”

His online customers are time poor and want to get to the point, without any sales push. They spend an average of 15% more online than they do in a retail store purchase. The site has its own inhouse internet store manager Naomi Howe (who came up with the interactive catalogue idea) and external design firm Paper Stone Scissors also works on the look and functionality of the site.

Alexander is proof there is money to be made in cyberspace. “Out of all the Australian fashion websites, I am probably one of the only ones who makes money,” he says. Not bad for an entrepreneur who admits he can “barely use email”.

GLOBAL ETAILING TRENDS

• More personalised services for shoppers.
• More video streaming and other multi-media functions.
• Cultivating customers through quality, compelling newsletters and email campaigns.
• Continuous commitment to improved organic search rankings.
• Online store blogs and forums.
• Free, super-fast shipping – it can never be fast enough.

Emily Ross is the co-author of 50 Great e-Businesses and the Minds Behind Them (Random House) released on 1 September, 2007.