Registering for Revenue

Apr 01, 2002 10:30 PM  By

Universal Screen Arts’ two catalogs, What on Earth and Art & Artifact, sell products such as The Bog Monster (a rubber creature that attaches under the toilet seat to on the inside lid) and Edwardian-style tea gowns. These are the types of items, it’s fairly safe to say, that engaged couples and parents-to-be typically don’t request when putting together their registry lists. But the company nonetheless rolled out registry features on its Websites in September 2001.

Is anyone using the registries? Oh yes, says Lisa Papageras, analyst in charge of Internet development for Twinsburg, OH-based Universal Screen Arts. And not just past customers. Papageras estimates that more than 50% of the online shoppers who use the registries are new to the company. What’s more, 80% of the sales dollars coming from the registries are from new customers. “The main benefit we see to the gift registry is its ability to bring us customers who may not be familiar with us but who were e-mailed the wish list of a current customer,” says Papageras.

Clearly, the Internet has changed how we think about gift registries. Online registries and wish lists enable consumers to tell friends and family what items they want for their birthdays or holidays as well as for occasions such as weddings and births. In addition to creating lists indicating which products they’d like, registrants can e-mail their lists to all and sundry. At the same time, gift-givers can use online registries to create address and distribution lists so that they can send gifts to groups of people with just a few mouse clicks.

As for Web merchants, they can gain new customers and higher visitor conversion rates. Raj Goel, chief technology officer with New York-based technology services firm Brainlink International, says his clients typically see visitor conversion rates (the percentage of online visitors who make a purchase) among gift registry users of 40%-50%. Typical online conversion rates hover around 1%-2%.

Online registries may even boost sales from existing customers using wish lists when shopping for themselves, says Peter Ripley, Web development expert with New York-based Internet solutions provider Solvient: “They help to draw in shoppers who are deliberative buyers.” Shoppers can put items in wish lists while deciding whether to buy them. If they decide to go ahead at a later date, they don’t need to scour the Website again to find them.

And though statistics aren’t available, in theory online registries and wish lists should reduce return rates. Recipients who receive a gift they had included on their wish list presumably are getting exactly what they want, notes Sean Carton, chief experience officer with Baltimore-based marketing firm Carton Donofrio Partners.

From wishes to profits

At Bargainandhaggle.com, a site that allows buyers and sellers to negotiate the prices of a vast array of merchandise prior to closing a sale, about 10% of active users have created wish lists, says Catherine Ettinger, CEO of parent company Mindpepper. That’s a higher percentage than a November study by Jupiter Media Metrix would suggest. According to Jupiter, while 40% of multichannel retailers have launched some sort of online registry, only 7% of online shoppers have used one. “Registries are not the way that people, at this stage, shop for birthdays and holidays,” says Rob Leathern, an analyst with Jupiter in San Francisco.

To boost usage of your online registry or wish-list function, you need to make sure it’s user-friendly, especially as many of the visitors using it will be new to your site. Ideally, says Brainlink’s Goel, shoppers should have to click no more than three times to find an item and add it to their shopping carts.

You also need to protect registrants’ data. Some online registries allow gift buyers to view only a registrant’s name and the date of the event for which he is requesting the products, says Catharine Harding, director of retail solutions with Blue Martini Software in San Mateo, CA. That way, would-be thieves can’t head to a bride’s home while the wedding is under way, for instance.

Integrating the offline and online databases behind the registry is critical. If John Doe buys an item from your Website, you need to make sure that the product is deleted not only from the site registry but also from your in-store registry or any other databases you may have. Otherwise you will find itself with conflicting records and dissatisfied customers. “You really want a single source of records for all orders outstanding,” says Simon King, vice president of advanced strategy for Redwood City, CA-based software provider BroadVision.

Similarly, the inventory of items available through the online registry should match that of what’s available offline. “If the company has stores everywhere,” says Jupiter’s Leathern, “online consumers will want the same items.” Forcing shoppers to work with just a portion of the products available offline will discourage their use of the online registry.

You also want to make it easy for registrants to communicate with potential gift buyers. For that reason, customers using Art & Artifact’s or What on Earth’s registry can e-mail others an HTML graphic of an item they’d like. “A picture is worth a thousand words, and our program quickly and easily advertises our brand to prospective customers,” Papageras says.

Papageras offers another tip: Make sure that your Website offers other features that complement the gift registry, such as gift-wrapping and gift cards. “If you’re going to build your site on the fact that you are a gift seller, you can’t end with the gift registry,” she advises.

As a rule of thumb, adding a registry function will tack on another 10%-20% to the overall cost of your Website, says Carton. “It comes down to how plug-and-play your e-commerce software is,” he adds. Online merchants whose sites were developed with custom software or who have an especially large number of products and Web pages will tend to spend more than marketers with open software and fewer SKUs.

Some e-commerce software applications come with a built-in gift registry function. Blue Martini is a case in point; the company’s e-commerce application, which is geared for retailers with annual revenue of at least $200 million, starts at about $500,000.

Universal Screen Arts opted to use a wish-list service provider, WishList.com. “Setting up our own gift registry program was an option, but the up-front expense was greater than the cost of the service provider,” says Papageras, though she won’t cite figures.

The tackiness factor

For all the apparent benefits to consumers, some people simply are not comfortable using an online registry. The main issue is not technology but social mores, says Leathern: “There’s no socially accepted way for adults to tell someone else to buy them a gift, outside of weddings.”

Teens, on the other hand, “thrive on wish lists,” Goel says.

By calling the features “wish lists,” retailers can make the idea more acceptable. “It’s helping to reduce the social stigma,” says Peter Fader, associate professor of marketing at the University of Pennsylvania. And some consumers say they appreciate having an idea of just what their family members and friends would like for gifts.

As younger consumers move from their parents’ homes to dorm rooms, apartments, and new houses, they’re likely to increase their use of registries. This presents retailers with a way to capture their loyalties early on. “That group represents an enormous opportunity for e-tailers looking to target potential ‘lifetime’ consumers,” says the Jupiter report.

Karen M. Kroll is a freelance writer based in Minnetonka, MN.

The Cybercritic Visits Online Registries

If you are or ever have been a New Yorker, you’ve signed up with or bought a gift from the Bloomingdale’s gift registry at least once. So The Cybercritic felt compelled to check out the department store’s online registry. It’s cobranded with WeddingChannel.com, and the latter must have provided the helpful editorial — articles about what exactly to register for, how to measure for a tablecloth, the differences between aluminum and anodized aluminum, that sort of thing.

To register, I had to open an account with WeddingChannel. The application gave the option of not displaying my address on the public portion of your registry. For some reason, it also asked how many guests I was planning to have at my wedding.

That done, I was directed back to the registry store. The selection wasn’t huge: only 13 brands of everyday dinnerware and 17 of fine china, for instance. But I could search for items by brand or by style, and the product photos had a zoom-in feature. On the right side of each product page were links to complementary items.

After registering for the Casa Azul tablecloth and napkins, I clicked the link on the side of the page to the Casa Azul dinnerware. But the product copy was quite confusing, and only four of the five patterns were even depicted.

I added a few plates to my registery, then hit the link to view the report of what I’d requested so far. Up popped a page telling me that the page I’d requested couldn’t be found. I was then directed to the WeddingChannel home page, which featured flashing logos of other companies that offer registries via WeddingChannel, including Crate & Barrel, Williams-Sonoma, and Restoration Hardware. Not a great way to promote the Bloomingdale’s brand.

Next up, Pottery Barn. The cataloger/retailer offered a great inducement for registering: If after the wedding/birthday/housewarming/other event, I hadn’t received everything I’d requested, I’d receive 10% off a one-time purchase of as many of those items as I wanted, so long as I made that purchase within a year.

Thanks to its serene site design (all light earth tones and clutter-free layouts), registering at Pottery Barn was a pleasure. The application was only two pages, and I could select to provide prospective gift-givers with unlimited online access to my wish lift, password-only online access, or store-only access. The editorial copy wasn’t as extensive as that of Bloomingdale’s/WeddingChannel, but the photos were great. In addition to the zoom-in function, Pottery Barn provided alternative “in use” photos of the products. All in all, if you like Pottery Barn’s products, you’ll love its gift registry.

If you need a broad selection of brands, however, you’d probably want to hop over to a site like that of Michael C. Fina. Another New York institution, Fina is renowned for its broad selection, discount prices, and savvy staff.

The site offered a page of reasons to register with Fina, including 15% off items purchased during the registrant’s birthday month, $50 off the price of wedding bands, and 10% off all purchases for one year. A disclaimer on the bottom, however, noted that the discounts were not available for online purchases; you’d have to call the toll-free number (or presumably visit the store) to avail yourself of them.

The application was similar to that of the other Websites, and its editorial the most entertaining. But no closeup photos were available of the products, nor were there product descriptions. Worse, not everything available in the store was posted online. For instance, only nine kitchenware items were available, although the store carries full lines of numerous brands. When I searched for a particular brand on the site, I was told, in effect, Nyah nyah, you’ll have to come to the store for that. Now, is that any way to treat a bride- or groom-to-be?

Universal Wish Lists

Some service providers, such as WishList.com, also offer universal wish lists. These enable consumers to go to one site to create wish lists that include gifts from more than one retailer.

A marketer starting with WishList can expect to spend about $600 for the Merchant software package plus a $50 monthly service fee. This allows the marketer to capture information about customers who use the registry function, such as names and e-mail addresses. It also enables the i.merchant to personalize the wish-list function with its name and logo.

In addition, the retailer pays a per-use charge that typically ranges from $0.02 to $0.05, depending on volume. A “use” consists of any interaction a shopper has with the registry, such as e-mailing a wish list to a friend or purchasing an item from the list, says Dan Spitzer, vice president of marketing and sales with Marina Del Ray, CA-based WishList.

Some question the benefit to retailers of using a universal wish list, where their competitors are likely to be listed right alongside them. “We don’t live in a vacuum,” counters Spitzer, adding that consumers can just as easily click from one site to another. He contends that appearing on a universal site can expose a marketer to additional prospects.
— KMK