How to Win Customers and Influence Browsers
By
Bernice Hurst, Contributing Editor, RetailWire
Quite
openly declaring itself “the creator of ‘Entertainment Shopping’ on
the internet,” Swoopo is dedicated to enticing customers with what
appear to be irresistibly tempting bargains. Since launching on German
television in 2005 as Telebid, Swoopo has evolved into an auction website
available to customers in the U.S., Germany, Britain, Spain, Austria
and Canada.
Unlike
some other shopping sites, Swoopo has a formula that appears to offer
customers extremely low prices while simultaneously ensuring that the
site’s owners get a hefty fee for their services.
Put
simply, each time someone bids – and this can be in increments of as
little as a penny – the bidder pays for the privilege (60 cents on
the American site). So customers are paying twice if they win the auction
but are paying to bid even if they don’t eventually get what they’re
after. One example cited by The
Washington Post is
a MacBook Pro sold for $35.86. According to the paper, “Swoopo lists
its suggested retail price at $1,799. But then look at what the bidding
fee does. For each ‘bid’, the price of the computer goes up by a penny,
and Swoopo collects 60 cents. To get up to $35.86, it takes a stunning
3,585 bids — and Swoopo gets its fee for each. That means that before
selling this computer, Swoopo took in $2,151 in bidding fees.” Journalist
Mark Gimein at the Post declares
himself addicted in spite of doing the math.
Another
site, www.very.co.uk,
specializes in tempting potential customers by laying on opinions about
the suitability of potential purposes. Combining celebrity points of
view with those of a panel of “real” shoppers, the site’s magazine
format complements its sales efforts to
help consumers with
the difficult task of decision-making. “Very” describes
itself as a network, a place where people can swap ideas and opinions,
knowledge, experiences and advice
with celebrities, experts and “people just like you.”
More
than simple shopfronts, these two sites have devised ways to entice
customers to feel good about spending their money. What better reason
can there be?
Discussion
questions: What is your reaction to the different formats used by Swoopo
and Very? What do you see as the strengths and weakness of each in
attracting consumers and moving them to purchase?
I just looked at Swoopo and found myself transfixed on the timer counting down as the bids went up. This site is a classic example of how we as humans love to be caught up in the rush of something exciting (or that at least appears to be). Especially when is comes to spending and getting.
Good for Swoopo. I have a hunch this site will become the next big thing.
It would appear that Swoopo has found a way to generate revenue from its site and offer a unique opportunity to its shoppers. As long as the products are appealing and the buyer is satisfied, I imagined Swoopo will enjoy a healthy business. If a competitive site offers the same products and service without the incremental cost, consumers will explore it. I doubt the shopper will stay away because Swoopo is earning money on each bid.
Very appeals for a different reason entirely. I would imagine that some of the same people who follow their celebrities on Twitter will be interested in their recommendations regarding products. It’s why we see paid-for endorsements in advertising. This is just another target audience with a special interest. As long as the products and perceived value pan out, this segment will stay with Very.
There are many websites offering discounted products and discounted luxury products at that. The appeal is fundamentally about buying something of greater value for less money. As long as that desire is fulfilled the websites will continue to attract new customers and retain their existing clientele.
Ok, just landed on Swoopo and I have to say this is the best auction/online merchant I have seen in a long time. The real-time countdown on the splash page is really engaging. Graphics and layout are crisp and clean. This is a very user-friendly website. Very has some good use of flash buttons. I always like sites that are more interactive when trying to sell you something.
Reaction: You get scary scoops from Very and a 60 cent booto with each Swoopo. Meanwhile the artful dodgers among the enterprising entrepreneurs thrive. What’s next, folks?
I’m impressed with the clean look and easy of using Swoopo. I wonder how many bills that do not result in buying a product a customer will be prepared to accept before quitting the site. The site does have addicting qualities which benefit the owners. It reminds me of being in a Las Vegas casino with all of the lights flashing and faux excitement, all designed to get you to visit a slot machine or gaming table. Stop for a second and look around…is anyone smiling? Swoopo had that same effect on me. Unless the prices are ridiculously low for the winning bidder, why bother to pay to play?
My father used to call lotteries “a tax on the mathematically challenged” and it seems to me that Swoopo is truly more of a lottery than a legitimate means of shopping. Considering that it took upwards of 3,500 bids to capture one notebook computer, shopping on Swoopo seems more a matter of playing the odds than a buying experience.
In true entrepreneurial fashion, I’m sure someone will set up a computer program that auto-bids on hundreds of items simultaneously, killing the fun for the average bidder.
As for Very; I think it’s very cool. Combining a celeb magazine format with an online shopping channel is brilliant. They’ve done a great job of identifying two things their target market enjoys (celebrities and shopping) and married them up. I’d look for more of this in the future.
Thanks to these sites for bringing some excitement into online retailing. Conventional retailers have a great deal to learn from them.
Most retailers are totally absorbed in the next best thing. They tend to neglect the enormous value they potentially bring to the customer as they shop. The opportunities are enormous to enhance the shopping experience though a blend of brick and mortar and information presentation. The consumer is always asking the same questions.
Does this go with what I already own? What did other shoppers think of it when they bought it? Has it been reviewed by an expert? How does it compare to alternatives? How do I care for it? Will it be available when I want it? How low a price can I get?
If answering these questions is always entertaining to their shoppers and leads to sales, why don’t retailers answer them?
Do you recall when everyone talked about being addicted to eBay? The addiction has been kicked, and to most people, eBay is yesterday’s news. I have to believe that the same thing will happen with these sites. In the meantime, they are fun, and engaging, but eventually people will realize that the economics don’t make a lot of sense, and will stop utilizing these sites.
I’m with Max. But I’d say it’s more like a carnival booth. Sure looks easy but darn if the rings don’t keep plinking off the bottles. Sometimes you plunk down $2 and win the giant green panda the first time; sometimes you spend $100 before giving up. I find it maddening but I guess there’s never a shortage of people who will go for this sort of thing.
First of all, thanks Bernice for always enriching our retail brains with infusions of non-US concepts. I was transfixed by Swoopo; they did a wonderful job creating excitement without resorting to convoluted complexity. It appears that even an escalating bidding war wouldn’t put you out more that a tenner on Swoopo. Then again, if you lost that war, you’d be in negative territory with nothing to show for it. I think it warrants further investigation…once I get to the hotel high speed!