Analysts predicted that online shopping would increase 20 percent over the last holiday season. Don’t they know that you should never underestimate the (spending) power of a woman?
There is no denying that female shoppers are flexing a lot more monetary muscle on the Internet these days. E-commerce experts are reporting that this demographic was a major factor in the 2004 online holiday shopping season that soared to a 25 percent year-over-year increase to total US$23 billion in revenues.
Indeed, women’s marketplace dominance is clear. Women are responsible for 83 percent of all consumer purchases, according to Marty Barletta, author of Marketing to Women.
Specifically, women are responsible for 94 percent of home furnishing decisions, 92 percent of vacation decisions and 91 percent of home buying decisions. Moreover, Barletta’s research shows that women open 89 percent of all new bank accounts and are responsible for over two-thirds of all health care spending.
However, this comes as no surprise to Overstock.com. The company has always targeted women shoppers. The E-Commerce Times caught up with Overstock.com President Patrick Bayren to discuss this powerful demographic and how one of the most popular online retailers approaches it.
ECT: How did the 2004 holiday shopping season shape up for Overstock.com?
Bayren: This was our busiest holiday shopping season ever.
ECT: Do you have any stats available on year-over-year holiday shopping increases?
Bayren: We don’t give guidance or projections and we’ll be reporting our fourth quarter numbers at the end of the month, so I can’t get too specific. However, I can tell you that a report came out saying that the online retailing industry as a whole grew 25 percent this holiday season compared to last year. Overstock’s growth over the holiday season will be quite a bit higher than that.
ECT: What factors do you think contributed to that success?
Bayren: People are discovering that we have the lowest prices online, and aside from loyal word of mouth among our customers, we are seeing a favorable return in our advertising.
ECT: How much of your success this holiday season do you attribute to female shoppers?
Bayren: Female shoppers are flexing a lot more of their spending power online now. That has been great for Overstock.com because our customer base is two-thirds women.
ECT: Why are females such a force in online retail these days?
Bayren: There are two facts that, taken together, explain why females have become such a powerful force in online retailing this year. First, women surpassed men in Internet usage around 2001 and, second, we know that it takes about three years of using the Internet before people are comfortable shopping online. Therefore, this is really the first holiday season where female shoppers will be shopping on the Internet in full force.
ECT: Have you always targeted women shoppers? Or did it become apparent to you at some point that you needed to exploit what was becoming a profitable segment?
Bayren: Since its launch in 1999, Overstock.com has always targeted women. In fact, we did extensive research and designed our entire Web site around what women want when shopping online.
ECT: I notice on your home page, your “about us” page and other pages, the images of people are all women. Have you done this on purpose? Do those images reflect your typical customer, the young, savvy woman who is looking for great deals?
Bayren: Yes, absolutely. Our customers tend to be savvy female shoppers who recognize a great deal when they see one.
ECT: Being as one-third of your customers are males, do you make any special effort to reach out to them?
Bayren: Not really. Our advertising and marketing are targeted primarily toward female shoppers, and our Web site is geared toward female shoppers.
ECT: Why do you feel your site appeals to female shoppers so much? Is it the products you sell? The deep discounts?
Bayren: I think Overstock appeals to female shoppers for several reasons: For a lot of women, shopping is like a sport; they shop frequently and thus are keenly aware of prices and inventory cycles. Women know that paying retail is foolish. I think they also enjoy the thrill of the hunt and sense of pride/accomplishment in finding that red hot deal that few others will have discovered, too. Since everything on our site is priced 40 to 80 percent below retail, they’re guaranteed to find nothing but red hot deals.
ECT: What are the elements that contribute to the attraction for females? For example, have you created special design features or functionalities that women are known to like?
Bayren: Based on extensive research, we’ve focused on the things that matter most to female shoppers: flat-rate shipping, no hidden fees at checkout, fast Web site performance, easy navigation and search, fair, straight-forward returns policy, customer service 24/7, name brands.
ECT: You said earlier that you had seen a favorable return on your advertising. How do you market the site, and does that marketing specifically target females?
Bayren: We do a lot of online advertising, and in September 2003, we launched our first national advertising campaign. We also rely heavily on word of mouth. We’re finding that our customers like to share where they find great bargains.
ECT: What are women buying on your site? What are the most popular categories?
Bayren: For competitive reasons, I can’t disclose our most popular categories or how much a category contributes to our business. I can tell you that our apparel category has experienced tremendous growth, and our accessories and jewelry categories have always done well.
ECT: How do you think the 2004 holiday season will shake out? Will we learn that many, many sites saw females flex a lot more spending power on the Internet this year?
Bayren: Most industry analysts were predicting 20 percent growth for the industry over the holidays, but once all the receipts are counted, I believe actual growth will be closer to 30 percent. Analysts simply underestimated the impact female shoppers would have on online spending this holiday season.
ECT: What do you expect in the year to come? Will online retailers begin to cater more toward women?
Bayren: I anticipate that online retailing will continue to take a bigger chunk of sales away from bricks-and-mortar retailers. Female shoppers will be the driving force behind that trend. And yes, I do believe online retailers will start catering more toward women.