Case Study: SmartBargains.com and Shop.com

Off-price general merchant SmartBargains.com has found a relatively effortless way to gain 10,000 new customers a year: participating with online shopping mall Shop.com.

Monterey, CA-based Shop.com accounts for only about 1% of SmartBargains’s $100+ million in revenue, but Joan Abrams, SmartBargain’s director of database marketing, describes Shop.com as “one of our largest partners. The relationship has grown, especially in the last two years, and we expect that those numbers will increase moving forward.”

Boston-based SmartBargains has worked with Shop.com since 2000, when it was known as CatalogCity. The company adopted its new name in early 2004.

In addition to a new name, Shop.com has introduced several features during the past few years. One that Abrams singles out as being especially effective is the daily Value Spotlight: Each day Shop.com showcases on its home page a different item from one of its 1,500 merchants. The Value Spotlight’s biggest plus for a merchant, Abrams says, is that it features links to both the merchant’s Shop.com storefront as well as to other Shop.com sale opportunities. Shop.com launched Value Spotlight in October 2005.

Shop.com works on a revenue-sharing model basis. The company offers a standard one-year contract that includes an optional auto-renewal. When a consumer logs on to Shop.com and finds his way to a merchant’s storefront, Shop.com sends any orders directly to that merchant. At the end of each month, Shop.com bills its merchant partners for a commission on the delivered orders.

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