Holiday Prep: Sierra Trading Post targets impulse buyers

This is the second in a series of stories about retailers bolstering their Web sites in time for the 2005 holiday shopping season. Read about how Hammacher Schlemmer is using speech recognition to handle customer calls, and stay tuned for more retailers’ stories.

Displays that flank the checkout aisles in brick-and-mortar stores are filled with items retailers hope shoppers won’t be able to resist adding to their carts. Enticing people to make such impulse buys isn’t as easy to do in the online world, but there are tools that can help.

This holiday season, Sierra Trading Post is using software from Offermatica to put product suggestions in front of Web shoppers. Offermatica provides hosted testing and optimization services aimed at helping retailers improve their online marketing and merchandising efforts and sell more goods.

On Sierra Trading Post’s Web site, shoppers are shown top-selling items — as determined by Offermatica’s metrics — as they navigate different departments, such as women’s sweaters or men’s pants. If a shopper clicks on a specific product, the Offermatica technology finds three related items that show up on the product page as items that Sierra Trading Post recommends.

“If you drill down to the product level, what you see are three products that are basically in the same department, automated by Offermatica,” says Chris Lange, Web operations manager at Sierra Trading Post, which sells overstock and closeout items from name brand vendors. The Cheyenne, Wyo., retailer operates three retail stores, a Web site and its catalog business.

If inventory runs low on any of the related items, Offermatica knows to stop recommending it to shoppers, Lange says.

Sierra Trading Post also is using Offermatica’s technology to drive last-minute purchases from its shopping cart page. The retailer suspected that offering impulse shopping suggestions on the shopping cart page would boost sales, and it’s using Offermatica’s technology to run a series of tests that compare shoppers’ reactions to impulse-buy items at different price points, such as under $10 and over $25.

When shoppers go to the checkout page, they see three impulse shopping items, culled from among the retailer’s top sellers. The products displayed on the checkout page are rotated — there are three different groups of suggested items, or “recipes,” that vary by price point.

Sierra Trading Post uses Offermatica’s optimization tool to test the most popular impulse buys at checkout and see which recipes drive the most increased sales, Lange says. “It gives you a real quick snapshot view of which one is doing a higher average order value.”

Just how effective are these impulse-oriented campaigns? In general, when shoppers click from the checkout page onto a specific impulse shopping suggestion, they don’t necessarily wind up buying the item they clicked on, Lange says. But they do tend to buy something else.

“What we have found is that people who click on those items, those impulse buys, usually do go and purchase something,” Lange says. It might not be the item they first clicked on from the checkout page, but they’ve often added an additional item to their shopping cart before they check out, he says.

Over the last several months, Sierra Trading Post has increased revenue-per-visitor by between 1% and nearly 5% with the checkout-placed suggestions, Lange says.