TCS: Success Strategies Of The Fastest Growing Internet Retailers

#tcs2017 LinkedIn.com/in/RolandFrasier
Native Commerce & Digital Marketer
Growth Strategies Of
The Top Internet
Retailers

#ccs2016 @your_twitter_handle
Source: InternetRetailer.com

This is a sample of bold
text on a full color slide.
This is good for quotes,stats,
dividers,etc.
Innovative Model

Re-Inventing Models + Markets
• Leesa.com: Avoid mattress shopping awkwardness. Cut out middle-men + lower cost.
• Pharmapacks: Buy 50,000 products from 16 diverters, list on Amazon, win the buy box.
• NakedWines.com: Overcome distributor monopoly, crowdfund new winemakers +
provide wine lovers with high-quality, deep discounted wines.
• Harrys.com: Own manufacturing, eliminate inconvenience + expense of drugstore razor
shopping. Subscription razors + related products.
• Wayfair.com: Long-tail furniture shopping, try-before-you-buy tech + marketplace.

dividers,etc.
What To Do Now…#tcs2017 LinkedIn.com/in/RolandFrasier

Disruption = Applying Different Business Models To Your Industry
• Landlord (Physical/IP)
• Affiliate
• Pay As You Go
• Publisher
• Franchise
• Manufacturer/Sales Rep
• Wholesaler
• Broker
• Reseller/VAR
• Retailer
• Network Marketing
• All you can eat
• Direct Seller
• Subscription

Experiment With Different Pricing Models
• Free (Ad Supported)
• Freemium
• Value Based
• Tiered/Volume
• Feature + Add-Ons
• Low Price
• MSRP/MAP
• Free + Paid Support
• “Cost +” or “x Cost”
• Portfolio/Suite
• Commodity
• Razor + Blade
• Premium/Luxury
• Discount

Naked Wines Product Innovation Mapping
Business Model
Primary Secondary Tertiary
PricingModels
PrimarySecondaryTertiary
Publisher: Winemaker
Pitches NW On New Wine
Paid Support: Winemaker
Receives Advance + Support
Subscription: Crowdfunding
Via “Wine Angels”
Volume: Based On Sales
Value Based: £6 Per Order +
£60 Wine Credit
Discount: “Angels” Pay 40-
60% Less Than Retail
“Wine Bond”Interest @ 7%
or 10% Wine Credits
Direct Seller: Disrupt old
wine distributor model
$40/Month Wine Box
Affiliate

Leesa Product Innovation Mapping
Business Model
PricingModels
Direct Seller: Mattresses Affiliate
“Refer A Friend”
Publisher
Better Sleep Blog
Low Price
Value Based
Give $75/Get $50
Free
Cost + or X Cost: Upsells
to blankets, covers, etc.
List Rentals?
Affiliate Offers?

New Product Innovation Mapping
Business Model
PricingModels

dividers,etc.
Chatbots +
Smart Speakers

Source: activate.com WJSD Tech+Media Outlook 2017

#tcs2017LinkedIn.com/in/RolandFrasier
Holiday Shopping With
Nordstrom.com Chatbot
Asks general questions
which lead to specific
product suggestions

1-800-FLOWERS:
Order flowers for
my wife
UNIQLO Chatbot
Shopping“Tinder
Style”With Swipe-
Til-You-Like-It

Louis Vuitton
Item Finder
Everlane
Order Status

Amazon,Google,Apple + Microsoft “Smart Speaker”Voicebots
#tcs2017 LinkedIn.com/in/RolandFrasierReordering Pens On Echo With Alexa

Most
Voicebots
Don’t Use
Google
Search
Results
Source: WSJD Tech+Media Trends

dividers,etc.
What To Do Now…#tcs2017 facebook.com/RolandFrasierPage

dividers,etc.Partner With
Influencers #tcs2017 LinkedIn.com/in/RolandFrasier

Leesa’s
Influencer
Program
• Send free product
to influencers to try
and review
• Earned media
outreach to
influencers like Tim
Ferris + GQ

Harry’s
Influencer
Program
• Send free product
to influencers to try
out and review
• Earned media
outreach to
influencers like Tim
Ferris + GQ

Ipsy’s
Influencer
Program
• Open Studio: 10,000 ft2
studio for influencers
• 10,000 amateur beauty
vloggers
• Access Open Studio,
apps, publicity, tools
• 300 million social media
impressions

Petco’s
Influencer
Program
• Partnered with
YouTube star Toby
Turner (15 million
YouTube subscribers.
• Video got 595,000
views vs. about 1,000
per video on Petco’s
YouTube commercials

TCS: Success Strategies Of The Fastest Growing Internet Retailers

dividers,etc.
Marketplaces #tcs2017 LinkedIn.com/in/RolandFrasier

Wayfair.com
Marketplace
• 7,000 independent
sellers
• Generates income for
Wayfair + expands
product mix
• Reduces need to
inventory drop-ship
items

Pharmapacks.com
Marketplace
• Grew up on
Amazon.com
marketplace, expanded
to others (Ebay,
Overstock + Walmart)
• Sells 50,000 different
products
• Recently opened its
own marketplace

Sell Your Products On Additional Marketplaces
#tcs2017 LinkedIn.com/in/RolandFrasier Source: Internet Retailer 2016 Online Marketplaces Report

Explore Listing
Your Products
On Niche
Focused
Marketplaces
#tcs2017 LinkedIn.com/in/RolandFrasierSource: Internet Retailer 2016 Online Marketplaces Report

#tcs2017 LinkedIn.com/in/RolandFrasierSource: Internet Retailer 2016 Online Marketplaces Report
% Of Consumers
Who Purchased
Items In These
Categories In The
Past Year From A
Marketplace
Should You Be
On This Channel?

Marketplace management solution
when you don’t have Pharmapack’s
“Master Brain”Software

dividers,etc.Make Or Source
More Product #tcs2017 LinkedIn.com/in/RolandFrasier

Ipsy’s Em Cosmetics
• Recently repurchased
from L’Oreal
• Plan to offer through
Ipsy
• Provide higher margins
and greater creative
control

USAutoParts.com
• Increasing its private
label auto parts line
• Kool-Vue
• Sells on
USAutoParts.com site as
well as other auto parts
marketplaces

Pharmapacks.com
• Acquires lower priced
items through diverter
network
• Special family
relationship with
Quality King
• Opening its own vendor
marketplace

Rue21.com
• RueGuy line for men
• RuePlus line for plus
sized women (fair price)
• ETC line of accessories

Create,Source & Sell Owned Branded Products
• GreenChef.com: Grower Contracts To Retail Web
• Leesa.com: Owned Manufacturing To Retail Web
• USAutoParts.com: Sourced Manufacturing To Retail Web
• Honest.com: Sourced Manufacturing To Retail Web + Retail
• Harrys.com: Owned Manufacturing To Retail Web

Selling Your Own Products Improves Margin Measurably
• Our average margin on drop-shipped + branded products is
20% - 30%.
• Our average margin on products we manufacture is between
50% - 70%.
• Vertical integration allows data-driven product development
+ short dev time

How can you use this in your business?
• Own or get exclusives on your raw materials like NakedWines.com
or GreenChef.com
• Source or own manufacturing of your products vs. drop-shipping
like Harrys.com (owned), DollarShaveClub.com (sourced) or make
arrangements with diverters like Pharmapacks.com did
• Create + own your house brand like Honest.com + Wayfair.com

Fill Product Mix Gaps With Your Own Branded
Products
Product Mix Width: # of different product lines carried by the company
Product Mix Depth: # of versions of each product offered in the line
Product Mix Consistency: How closely related are the different product lines
Product Line: Closely related group of products
Product Line Length: # of items in the product line

The Product Line Grid

The Product Mix Canvas
 PRODUCT MIX WIDTH 
 PRODUCT LINE 1 

PRODUCT
MIX
DEPTH

 PRODUCT LINE 2 
Product
Category 1
Product
Category 2
Product
Category 3
Product
Category 1
Product
Category 2
Product
Category 3
Product
Category 4
Product
Name 1
Product
Name 2
Product
Name 3
Product
Name 4
 PRODUCT MIX WIDTH 
 PRODUCT LINE LENGTH   PRODUCT LINE LENGTH 
 PRODUCT CONSISTENCY 

dividers,etc.
Risk-Reversal #tcs2017 LinkedIn.com/in/RolandFrasier

Wayfair’s Fair
View App Lets
You Try Items
In Your Home
Before You Buy

#tcs2017 LinkedIn.com/in/RolandFrasier #tcs2017 LinkedIn.com/in/RolandFrasier

#tcs2017
LinkedIn.com/in/RolandFrasier#tcs2017 LinkedIn.com/in/RolandFrasier

Create Risk-Reversing Offers + Add Risk
Reversing Tech To Your Marketing
Try-Before-You-Buy Programs:
X Days Free Trial (e.g. Warby Parker Try 5 Paris For 5 Days)
Mixed Reality Tech (e.g. Wayfair View, L’Oreal Makeup Genius)
Total Satisfaction Guarantees
Easy Returns
Free Shipping

dividers,etc.
Personalization #tcs2017 facebook.com/RolandFrasierPage

BlueApron.com
subscribers can
choose their
recipes based
on dietary
preferences.

Use Personalization To Increase Conversions + Retention
Ipsy.com
visitors take a
survey to help
personalize
their monthly
Glam Bag
offering

Use Personalization To Increase Conversions + Retention
Ipsy.com subscribers can
personalize their monthly
Glam Bag offering

#tcs2017 linkedin.com/in/RolandFrasier

The Neiman Marcus Memory Mirror
lets you send pics to friends on social
networks to get their advice.

Wayfair has custom software that
personalizes your online experience
based on behavior + analytics.
• 15 –25 A/B split and multi-
variant tests per month
• Increased LTV,repeat buying
• Reduced churn
• Orignally used Sitespect.com
tool for this
http://engineering.wayfair.com

Custom software sends
1 million + different
variations of the daily
email
$64 CAC / $342 LTV

Sitespect.com

What Personalized Experience Can You Deliver?
• Survey your market to learn more about them and deliver
personalized experiences based on their answers.
• Allow customers to create their own customized version of your
product. (Rayban did this and it now composes 40% of sales.)
• Use on-site behavior, buying history or aggregated data to serve the
most relevant offers, content and experience to your customers.
(Wayfair did this with SiteSpect before going custom.)

dividers,etc.
O2O #tcs2017 LinkedIn.com/in/RolandFrasier

O2O: Use Pop-up Stores To Test + Connect
• MichaelKors.com: Multiple pop-up stores.
• Casper.com: Pop-up store mobile truck with beds
• Amazon launch of 100 pop-up stores
• Honest.com: Pop-up stores, stands, kiosks.

#tcs2017 LinkedIn.com/in/RolandFrasierTheStoreFront.com

dividers,etc.
Transparency #tcs2017 LinkedIn.com/in/RolandFrasier

Add Transparency In Your Marketing + Site
• Provide a list of raw materials + sources
• Showcase manufacturer and their processes
• Share your product create costs
• Provide competitor price comparisons
Source: Pixlee.com | boast.io |3DCart #tcs2017 LinkedIn.com/in/RolandFrasier

dividers,etc.
Social #tcs2017 facebook.com/RolandFrasierPage

Social Commerce + UGC = Higher Conversions
Shoppers who interact with a UGC photo are 2x more likely to
purchase.
UGC photos get 4X higher CTR than branded ads.
UGC photos raise on-site conversion by 74%
71% of respondents say they trust UGC more than those taken by a
manufacturer or seller
Source: Pixlee.com | boast.io |3DCart #tcs2017 LinkedIn.com/in/RolandFrasier

BlueApron.com customers
post pics of their creations
on BA’s Facebook page
Encourages customers to post
meals they made using BA kits
with hashtag #blueapron.
UGC photos increase engagement
+ amplify your brand.
UGC photos raise on-site
conversion by 12%.
tcs2017 LinkedIn.com/in/RolandFrasier

BlueApron.com holds
multiple user photo
contests to build UGC
First contest began in
2013.
Contests span multiple
social media platforms
including Facebook +
Instagram

Ipsy.com provides
vloggers OpenStudio to
build UGC
Free use of the Santa Monica
studio’s equipment.
Photo shoots and earned
media opportunities
Wants to own 100% of beauty
vlogger market

MichaelKors.com builds
UGC with Social Media
Hashtag Campaigns
#SidewalkSpotted with links to
product on MK site
Consistently creates social
campaigns lending themselves
to UGC, from #JetSetSelma to
#WhatsInYourKors

Shop For Cosmetics With Snapchat Shoppable Stories

Fastest Growing E-Retailers Drive Traffic With Social
• BlueApron.com: 7% Of Total Traffic From Social
• DollarShaveClub.com: 9.3% Of Total Traffic From Social
• Casper.com: 11% Of Total Trafic From Social
• Everlane.com: 11.73% Of Total Traffic From Social

CharlotteRusse.com drives social commerce with Curalate

Source: Jay Baer #tcs2017 LinkedIn.com/in/RolandFrasier
Direct Your Ad Spend To Channels
Convert Best For Your Offers + Products

Instagram:
#LinkInProfile +
#LinkInBio
Instagram: Add a link
from your brand’s bio to
a shoppable gallery of
your brand’s Instagram
pictures. Use “Shop
Now” ads.

Create A Facebook Social Storefront

Twitter: Tweet a URLTo Take Users To Your Product Page Or
Collection

Pinterest: Use Buyable Pins,Shop-The-Look + Promoted Videos

Snapchat: Use
Shoppable Stories

dividers,etc.
Search
#tcs2017 facebook.com/RolandFrasierPage

The 25 Fastest Growing Retailers
Spend 4x More On Paid Search
#tcs2017 LinkedIn.com/in/RolandFrasierSource: InternetRetailer/AdGooroo

Top Retailers Are Increasing Paid
Search Spending + The Amount Of
Paid Search Traffic To Their Sites

How Do Small Retailers Compete With Top IR’s Spend?
• Use long-tail keyword research with content + paid ads to
own keywords the big companies miss (SEONick.com)
• Go where they are not (pop-ups, print ads, trade shows)
• Create unique, compelling content they are not
• Focus on your story and sell products they are not

dividers,etc.
Recurring Revenue#tcs2017 facebook.com/RolandFrasierPage

Fastest Growing Companies With Subscription Revenue
• BlueApron.com: Food/Recipe Bundles
• DollarShaveClub.com: Razors + Other Bathroom Products
• Ipsy.com: Make-up
• Honest.com: Diapers + Other Bundles
• NakedWines.com: Wine boxes

Subscription Revenue
• Predictable cash flow
• Predictable inventory needs
• Higher valuation multiples
• Biggest Challenge = Churn
Use Welcome, Consumption + Win-back Campaigns

What Is Your Recurring Revenue Plan
• Do you have a recurring revenue component to your business
model?
• What can you do to incorporate recurring revenue and
encourage retention to reduce voluntary churn?
• Can you start a subscription box? Ttwo good resources are…
SubscriptionCommerceInsider.com + CrateJoy.com/Box-Insider

dividers,etc.
Be On-Trend#tcs2017LinkedIn.com/in/RolandFrasier

Are You Riding Current Trends
• Leesa.com, Casper.com + Saatva.com: Mattress market disruption
• Honest.com: Natural products + Monthly boxes
• Etailz.com: Eco-Responsible products
• GreenChef + BlueApron: Cooking/Chef TV shows + Monthly boxes
• Trendwatching.com: Track trends

Is Your Business Model“On Trend?”
• What are the major trends are taking place in your current
market? See TrendWatching.com / TrendHunter.com
• What major trends apply to your target audience?
• Does your current business model and product lineup
match up to one or more of these trends?

dividers,etc.
Customer
Focused#tcs2017 LinkedIn.com/in/RolandFrasier

Pharmapcks.com: Provide Value + Get Valuable Feedback
• 284,000 Customer Reviews: With a 4.9 star average rating on Amazon
• Micro-Advocacy With Amazon Seller-Support Group (“ASSG”): 16
dedicated customer service reps monitor customer complaints and write
back within 24 hours (key metric for Amazon). Resolve all customer
complaints then appeal to ASSG to remove reviews. Over 3,300 removed
in a single year.
• Software To Monitor Poor Reviews: TrustPilot scans through all 1 to 3 star
reviews and elevates to 2 CSRs for resolution.
#tcs2017 LinkedIn.com/in/RolandFrasierSource: Inc.Magazine Interview

Continually Iterating Data-Driven Products
• Pharmapacks.com: “Master Brain” identifies products
customers want + custom pricing algorithm identifies
pricing to win the Amazon Buy Box.
• Wayfair.com: Custom analytics software watches customer
behavior and delivers content + offers tailored per buyer.
• SurvivalLife.com: Knives sell better than most products

TrustPilot.com

Intelligent, dynamic pricing solution
when you don’t have Pharmapack’s
“Master Brain”Software

How Is Your Customer Feedback Loop?
• Let customers update account info, post reviews, leave
opinions.
• Offer live chat, telephone support and a help-desk?
• Monitoring customer feedback on the web?
• Building customer preference/taste profiles to personalize
the app + web experience?

dividers,etc.Bundling

The Benefits Of Bundling…
• Personalized customer experience (choose your adventure).
• Avoid decision fatigue and increase conversion rates.
• Valuable customer data + feedback for future product dev.
• Increase immediate average order value and Lifetime
Customer Value by increasing order size + price.

What product and/or service bundles can you create?
• Products that go together like DollarShaveClub.com does
with razors and shave butters and gels?
• Products that complement one another like Honest.com
does with diapers and baby wipes
• Increasing quantity + selection like TouchOfModern.com
does.

dividers,etc.
Strong Referral
Program

Referral Programs
• Drive 5% - 30% of total acquisition
• Average CPA is $3
• Display + PPC CPA averages $40
• Retargeting CPA averages $10
Source: FriendBuy.com #tcs2017 LinkedIn.com/in/RolandFrasier

Source: RetentionScience.com#tcs2017 LinkedIn.com/in/RolandFrasier

dividers,etc.Unified Commerce
Vs.Omni-Channel #tcs2017 LinkedIn.com/in/RolandFrasier

Source: Boston Retail Partners #tcs2017 LinkedIn.com/in/RolandFrasier

dividers,etc.

dividers,etc.
Thank You
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TCS: Success Strategies Of The Fastest Growing Internet Retailers

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TCS: Success Strategies Of The Fastest Growing Internet Retailers