Thursday, March 19, 2009

Shop It To Me

Internet usage has increased dramatically in the past few years, which has caused a change in the typical business model. There has been an ongoing shift from traditional freestanding stores to pure play companies that exist solely on the Internet. By using the pure play model, companies have the ability to cut entry and overhead costs dramatically compared to traditional brick and mortar companies. For a company that is just starting off it is easier to break into the market as a pure play company because of the cheaper start up and overhead cost and the exponential room for growth in domestic and international markets.


One such pure play company is Shop It To Me, which is an online company that scours the Internet for sales based on the customer’s shopping criteria and then sends the customer daily or weekly emails with the sale information called salemail. When the customer comes to the welcome screen they must set up an account with their contact information and what sort of the clothing they are interested in purchasing. The customer can choose from a list of specific designers, styles or sizes and how often they would like to be notified about the sales. The customer will receive emails with photos and links to the clothing that matches their criteria. Personally, I love that I don’t have to search through hundreds of websites and categories to find that pair of jeans in my size at a price I can afford. Shop It To Me delivers the information directly to me, which saves me countless hours of browsing. In the busy and chaotic world that many of us live in, we simply don’t have time to shop around for a deal. With Shop It To Me we don’t have to. To the left is a sample of the type of clothes that were sent to me in my weekly salemail letter.

Shop It To Me has partnered with many leading retailers to provide this service free of charge. They feature certain designers that their affiliate department stores carry, in order to promote the sale of the discounted apparel. They have followed the affiliate model for revenue generation. The affiliate model generates revenue from banner exchange, pay per click or revenue sharing. The company may use any combination of the three to make up its revenue. Shop It To Me advertises retailers sale items in exchange for revenue sharing. They make a small profit on the sales that their website directs to their affiliate’s sales. Since the overhead cost is minimal, Shop It To Me is able survive on the profit they make from revenue sharing.

To evaluate their success, Shop It To Me has developed a way to track purchases and customers. The first way that they are able to track performance is by the number of people they have register on the website. Through this registration they are able to see how they are responding to the salemail that is sent to the customer and how often they are actually on the website. Another way that they are able to track success is through customer recommendations. Shop It To Me is marketed purely through word of mouth. Customers are encouraged to invite 10 of their friends to join the website and when these 10 friends actually register the customer will receive a $10 coupon to one of three features stores. The final way that they are able to track their success is through purchases at their affiliate’s websites. They are able to see who is being directed there from their salemail and buying the suggested products.

Pure play companies such as Shop It To Me make it infinitely easier for start up companies to find their place in the market. As a start up company, cash is often tight, but with pure play companies the overhead and marketing cost are limited. They are able to track their success and attract new users at a much lower cost than brick and mortar companies. In the future, pure play companies will continue to thrive in our Internet-focused culture.