What Works? Price and Value! Big retail brands - especially at the high end - are struggling; often as a result of their own discount strategies. Consumers who've cozied up to deep discounts won't buy anything at full price. Oddly enough, consumers are seeking the two things they've always looked for...price and value. Result: Retailers with a business model based on affordable quality are seeing sales rise. A few are even knocking it out of the park. Those selling exclusively online have another advantage; less overhead, meaning the savings can be passed along.
What Works for Business came across three examples of web-based retailers that are seeing big revenue jumps they attribute to a marked consumer shift toward better value:
The Tie Bar: Since the site launched in 2004, The Tie Bar has been selling department-store quality 100% silk ties that typically retail for $50-$80 for around $15 each. In 2008, one of the worst years for retailers in a generation or more, The Tie Bar says that its sales rose 55%. What's more, the online tie retailer reports an astounding 70% sales increase so far in 2009, making it one of the largest necktie brands on the Internet.
Coastal Contacts: Now one of the web's fastest-growing vision care suppliers, Coastal Contacts sells designer eyewear (from names such as Gucci and Christian Dior) at 50-70% off prices seen on these items elsewhere. Over the past year, Costal captured sales of $31.3 million, an increase of 24 % from a year earlier.
Wine Chateau: An online wine and spirits retailer, Wine Chateau sells wine from its huge selection at up to 50% off retail prices of brick and mortar wine stores. The site often features promotions such as 10 bottles of wine for under $10; or 15 bottles under $15. Wine Chateau reports sales of $15 million for 2008, a 250 percent increase from 2007.