on the topic of 'shopping 2.0'. The show was very illuminating about how the Social Web has changed e-commerce and what tactics leading apps use to target their audience and make money. Indeed many of the lessons can and should be used by other forms of business, such as media and technology startups.Yesterday our regular podcast show, RWW Live, was
We have a two-part post summarizing the highlights from the show. In this post we discuss why and how shopping 2.0 sites are targeting very niche customers and how that's helped them increase revenues.
In part 2 tomorrow, we explain how e-commerce has evolved and what web technologies they're deploying nowadays.
We had 4 diverse guests on the podcast: Baynote (collective intelligence platform for online shopping), ModCloth (online retailer of vintage clothing), Retrevo (vertical search for electronics), and Cartfly (social commerce store network).
One of the questions we asked the guests was about the type of audience that their websites attract. I theorized that their companies might reach a wider, more mainstream audience than a lot of the web apps we write about on ReadWriteWeb (Twitter, FriendFeed and the like). However, it turned out that all of the guests viewed themselves as targeting very narrow niches.
Niche Audience Leads to More Detail About Your Users
Eric Koger, CEO of niche clothing retailer ModCloth responded that "the power of ModCloth is that we're not hitting a broad audience, but we're focusing in on a customer with a specific lifestyle" - in their case a specific type of women who buys vintage clothing. Koger explained that having a specific niche audience allows ModCloth to target customers on specific platforms - e.g. perhaps they are on Facebook and these are their interests, and they're on these blogs and looking at these websites. Having this level of detail allows them to "build lifetime value" for their customers and enables them to reach out to them in very targeted ways.
Koger said that "there are a lot of tools on the Internet to tell you where users are going, so if you can hone in on a specific target [audience], then there are ways to follow them across the Internet, understand their habits and really reach out to them where they are and where they're spending their time online".
Know & Support Your Users
Jack Jia, founder and CEO of Baynote, followed up by saying that they have close to 200 websites which they power, and a lot of them are e-commerce. What they've found is that for websites to increase revenue and other site success indicators, site owners have to "get the invisible users of your site working together" - in other words have your audience form community. This makes the site much more sticky.
Kurt Collins, VP of Business Development of Cartfly, agreed and said that they are "hyper-focused on merchants", who are in turn hyper-focused on their own niches. Those merchants "know who to approach, but not necessarily how to approach them". So that is where Cartfly comes in, helping them with sales and marketing. He mentioned that niche music and indie bands accounts for a good portion of their merchants and sales. He said "the mainstream stuff hasn't been doing that well for us, in general, but the long tail stuff has been doing great".
Andrew Eisner, Director of Community and Content, Retrevo, said that the key is to strike the right balance between content and commerce. On Retrevo they have reviews and supporting content, so that their users can be assured they're buying the right product.
Coming up tomorrow, in the second part of our podcast wrapup: How E-commerce Vendors Can Transition to The Social Web. In the meantime you can listen to the entire RWW Live podcast below:
Image: Giorgio Montersino