Internet Retailing Roundtable Briefing

The Internet Retailing roundtable featuring Jeff Parnell was held on Tuesday, July 31st, at National City Bank’s community room. The first roundtable was an incredibly interesting and productive meeting for all those who attended. For those of you who did attend, thank you for your participation, and please leave some feedback about your takes from the meeting. For those of you who were unavailable, feel free to browse today’s posting to get the gist of the discussion that was held. There will be future events, so keep checking the blog for updates so that you may attend the next event! 

Our industry expert featured at this breakfast, Jeff Parnell, began the discussion by speaking about the big picture approach to internet retailing, drawing from his experiences at Blair Corporation. He divided his experiences in leading the e-commerce endeavor at Blair into four separate stages, using the four “S’s.” Survival. Stability. Success. Significance. He then proceeded to talk about each of these stages in more detail. 

The first stage was the survival in the 2000 era. The e-commerce unit at Blair began as separate from the primary business units of menswear, womenswear, and home furnishings but from Day One, the e-comm team recognized the value of including all product lines on the website and worked to achieve synergies and efficiencies across product lines. Since the staff of this new unit only consisted of four individuals, there were on a race to drive revenue and demonstrate the “new” channel’s impact very quickly. They began to leverage every resource available from the other business units, including house lists and catalogs, in order to attract and acquire customers for the new online Blair store. They also tested many new methods that may help them in their acquisition of leads, in order to survive as a successful business entity. Some of these methods include email marketing, portal deals, strategic alliances, and affiliate programs.  

Soon, Blair’s e-commerce was in good health, showing vital signs of life and a good deal of potential. During this phase of Stability, team members from menswear, womenswear, and home furnishings began to work more closely, moving to what is called Multi-channel retailingOpportunities to more profitably liquidate discontinued product online also began to emerge and this “product line” took root as a key sales driver (typical customers purchased clearance items AND full-priced apparel).

Success came early, beating the first year forecast by achieving more than $30 million in gross revenue in the first year. The small staff of the e-commerce unit proved their worth and value, ending the race with consistent revenue achievements that surpassed original goals and expectations.

New initiatives were soon designed with the purpose of extending Blair’s reach and acquiring new customers. Strategic partnerships with internet marketing services, such as Performics,  to manage affiliate marketing programs.  In an affiliate marketing program, a publisher (in this case, Performics) receives a commission for generating a transaction, such as a lead or sale, for an advertiser (Blair) that the publisher is promoting. 

The Significance stage is the toughest for businesses, which comes after making the bottom line impact. For Blair, it became evident that the e-commerce channel was able to sell clearance and liquidate inventory faster, while making more profit. Therefore, the company closed several physical outlet locations (including one in Erie).  The level of collaboration between merchants and marketers continued to grow significantly, and this laid the foundation for new innovations that were closely aligned with corporate strategy.  Blair also implemented an e-commerce analytics application using Coremetrics in order to enable customer tracking from the original open of an email or click of a link to the shopping cart and transaction. This ability to track customer activity from acquisition to the transaction (and across the entire product line) is called the Long Tail. 

AJ Miceli, a Gannon Communication Arts professor and Director of Marketing for commented on Parnell’s use of affiliate programs and shared how developed their own proprietary affiliate program application.  Miceli said that the good affiliates are hard for smaller companies to find on their own.   He stated, “You end up dealing with link farms, and in general just bad sites.” He also pointed out that the better affiliates are becoming very picky about the deals they offer and are more interested in partnering with larger companies and better known brands. is currently rethinking their affiliate approach and is involved with negotiations to engage an affiliate marketing technology platform with thousands of affiliates participating. This endeavor should help find more niche affiliates that compliment‘s offerings.  

Internet Retailing requires a consistent vision and a serious commitment in resource to develop revenue streams from the online channel. Parnell pointed out that “most companies don’t follow their vision” in their efforts and actions. 

Parnell shared other experiences with issues that almost all online retailers find challenging…free shipping and email. It seems free shipping becomes the de-facto standard by 4th quarter pushing holiday sales.  He recommended testing various shipping offers such as giving free shipping on orders over the average order price.  Companies also should not forget to include the handling charge to cover picking and packaging of the products. Many online retailers follow the S&H rate cards that catalogers started. 

Parnell is a seasoned pro at Internet retailing, and those attending the roundtable were able to benefit first hand from his answers to questions and the discussions that took place.

BIG Thanks to Technology Council through the Technology Industry Partnership for sponsoring the breakfast.

Keep checking the blog for more upcoming events! Here are additional recommendations that Parnell offered to help local retailers succeed in the online channel. 

  • Get your website everywhere you are: business cards, email, physical mail, banner ads, etc. 
  • Be consistent between catalogs, website, and emails in terms of your product offerings, look, feel, and tone. 
  • Traditional advertising is not dead, but usually are linked to an online website via a link. 
  • Implement Web 2.0 activities to engage customer = customer interaction with your company website (Blair launched a customer recommendation engine called “Bazaar Voice” during Q4, 2006).
  • Include customer product reviews, FAQ, interesting stories about buying your products, polls, etc. 

Must have resources for Internet Retailers: 

Internet Retailer magazine

Practical eCommerce a community for e-retailers

Note: Jeff Parnell is a 22 year veteran in direct marketing and a pioneer in Internet retailing since 1996. Joining Blair Corporation in 2000, Parnell led that company’s e-commerce initiative from start-up to revenue of nearly $100 million in just six years. Currently, Parnell is the managing director of the Erie-based JHP Direct Corporation, reviewing e-commerce start-up and acquisition opportunities.

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eMarketing Special Interest Group

August 2007

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