On-Line Marketing - A Matter Of Survival
Kathy Vass, Marketing Editor
extile and apparel makers have been selling directly to the consumer for years through
discount retail outlets that offer seconds and odd lots from the mill. But in today’s tough retail
environment, many manufacturers are pursuing end-users on-line with first-quality goods to help
maintain their margins and gain the volume of growth they need to survive.
A major challenge facing manufacturers is building a brand and then making consumers aware of it. Unlike a retail store or retail website, which pull in regular traffic and sales with a range of products and brands, a brand-specific site pulls in visitors only when they are in the frame of mind to research or buy a certain product. When that need is satisfied, they may not visit or buy from that site again for some time.
Potential e-retailers need to remember that Internet business includes ongoing overhead for fulfillment, marketing and customer support.
Rice Mills Goes Live
In an attempt to stave off the fate experienced by other apparel makers around the United
States, Rice Mills Inc., Belton, S.C., developed an on-line program to market and sell its own
brand, Fleece by Rice, direct to the consumer. Offerings at www.fleecebyrice.com include jackets,
hoodies, pajamas and bathrobes for children; and jackets, robes and socks for adults.
“Retail margins get tighter and tighter, and price pressures are greater and greater every year,” said Gene Clinkscales, CEO, Rice Mills. “It’s no secret that to keep our doors open, we moved a portion of our manufacturing offshore a few years ago, but we won’t be able to go but just so low and stay in business. Based on the trends we’ve seen with our retail customers, we need our on-line program to be our dominant business two years from now.”
The Right Idea
Rice was first introduced to the idea of direct-to-consumer Internet marketing by Jack Stone,
CEO of Simpsonville, S.C.-based Stone International LLC. Stone formed the Mauldin, S.C.-based South
Carolina Apparel Cluster — a loose coalition of apparel companies in South Carolina that share
ideas and strategies on selling direct to the consumer via the Internet.
The cluster has a website, www.s2c-apparel.com, that offers concepts and ideas on getting started with e-commerce. As Stone sees it, South Carolina’s rich heritage of providing unique, high-quality and high-value apparel is being challenged. One way manufacturers can respond is to bypass the giant retailers that are buying most of their apparel overseas and set their sights on a growing on-line apparel market that is projected to hit $13.3 billion in sales by 2009.
Making It Work
While e-commerce was a new concept for Rice, company officials believed successful programs
developed for its retail customers — such as quality assurance and on-time delivery — would serve
them well in the on-line world.
“Marketing on-line is a completely different ball game, but we felt good about our strength as a retail provider and our ability to apply our manufacturing and delivery concepts direct to the end-user,” Clinkscales said.
One big difference with e-commerce, according to Clinkscales, is the need to build the brand with marketing and advertising. “We’ve never advertised in our lives,” he said.
“But it’s not enough just to launch a website. You’ve got to commit the resources to drive
customers to the site.”
Rice is doing that with a marketing mix that includes print ads in parenting magazines of larger metropolitan areas like Atlanta, Charlotte and Philadelphia; and search-engine manipulation. Closer to home, Fleece By Rice ads appeared on billboards along nearby interstates and were heard on local radio stations during the holiday shopping season. The company also implemented a public relations program that resulted in several television and newspaper features.
“We initially underestimated the need for local advertising,” Clinkscales said. “We quickly realized we needed to build our brand in our own backyard. When we began doing that, we saw more immediate results from our marketing and advertising. There was a spike in orders after local TV and newspaper stories … of about three times our normal activity, and our baseline orders are now much higher.”
To date, on-line orders at the website have come from 32 states; hits have come from as far away
as South America, Moscow and China.
Children’s apparel heads the list of on-line purchases, which is consistent with Rice’s retail business over the past several years.
So how do retail partners feel about manufacturers launching their own branded websites?
When brand manufacturers started offering direct sales via the Internet about five years ago, the initial reaction from retailers was alarm. Despite those initial concerns, the percentage of sales from a brand manufacturer’s site remains small compared to sales driven through retail stores and retailer websites, according to industry watchers.
For example, Rice Mills saw a marked increase in its JCPenney business during 2005, primarily due to the retailer’s own Internet business, Clinkscales said.
“We can’t outspend JCPenney or Sears, but we have to put programs in place to identify and develop new markets. This is a story of survival for a small-town apparel manufacturer and a community that needs it.”
Search Engine Manipulation:
A Winning Ingredient In The Marketing Mix
When Rice Mills CEO Gene Clinkscales entered the world of e-commerce, he was amazed at how much
he didn’t know. A few months after the company’s website went live, Clinkscales admittedly is still
a novice, but he’s convinced of one thing: Search-engine manipulation is extremely important when
“Not only is it important to build the right type of website for your industry and your audience, but you’ve got to commit the resources to market it,” said Clinkscales. “In my opinion, you’re wasting your time and money to launch a website on the cheap and just see how it does.”
Rice Mills is using an impressive mix of marketing mediums, but search-engine manipulation has revealed itself as the more aggressive marketing tool.
Search-engine marketing — the practice of buying key words on search engines such as Google or using language and design elements on a website in order to appear at the top of the results of Internet searches — is touted by many e-retailers as the best way to drive traffic to a site.
Of the 343 e-retailers surveyed early last year by multimedia publisher Internet Retailer, more than half of all respondents use search-engine marketing to drive traffic to their sites and boost on-line sales. The survey also showed this form of marketing is still relatively new, with the idea just now starting to catch on among on-line marketers that were slower to log on to the Internet, such as retail chains.
However, retail chains now spend the most on search-engine marketing, followed by catalogers, website-only marketers and manufacturers, according to the survey.
The Internet Retailer survey also asked e-retailers whether they preferred paid key-word or natural-language searches; how many key-word searches they manage; whether they manage search-engine marketing in-house or rely on outside vendors; how much they pay on average for key-word searches; and which search engine produced the best results.
Fifty-seven percent of respondents said they use both paid key-word and natural-language searches. The rest were split evenly, with those using natural-language-search marketing only reporting a higher level of on-line sales.
With regard to the number of key words managed, 21 percent of respondents said search engines contribute to more than 60 percent of sales when they manage 5,000 or more key words. The most popular level of spending on a key word is 10 to 25 cents per click, according to the survey. Interestingly, those who spent more per click — some as much as $1 — did not significantly increase their sales.
Those respondents that manage their search programs in-house, such as Rice Mills, tend to outperform other e-retailers that rely on outside vendors for search-engine management.
So what is the best search engine, according to the Internet Retailer survey? Google is number one because it has such a commanding share of the overall search market — almost 73 percent of respondents said Google is the best search engine when it comes to producing on-line sales. Yahoo/ Overture comes in a distant second at 21 percent; with MSN, AOL and LookSmart preferred by three percent or fewer.