E-retailers dig out from another big winter storm
February 2, 2015 05:15 PM
Wintry weather from Nebraska to New England forced some online retailers to cancel deliveries and close warehouses again this weekend, following similar weather-related disruptions last week. But the big snowstorms have not been bad news for all web merchants.
A random sampling of online retailer clients in area impacted by this weekend’s storm shows their traffic and sales were down in a range of 7-25% Saturday and Sunday, says MarketLive Inc., a provider of e-commerce software. However, IBM says online sales appear to have increased in the Northeast on Monday as the winter storm reached that region. 24.6% of online sales for IBM clients came from the Northeast on Monday, Feb. 2, versus 19.7% on the previous Monday, while the West Coast's share of web purchases declined from 24.7% on Monday, Jan. 26, to 23.3% this past Monday.
As for the other big event Sunday—the Super Bowl—it changed when consumers shopped, but not how much, says Adobe Systems Inc., based on data from its e-retailer clients. Online shopping was slightly higher than normal before the game began just after 6:30 p.m. Eastern time, then 15% lower during the game. “The net effect on online sales during the day was statistically zero,” Adobe says. “The Super Bowl seems to have changed when people shopped, but it didn’t stop them from shopping.”
Among the retailers hit hard by the winter storm was Peapod, the online grocer that is No. 61 the 2014 Internet Retailer Top 500 Guide. The web-only retailer canceled deliveries today in Chicago and other Midwest markets it serves from Indianapolis to southern Wisconsin, and in most of New England. That followed delivery cancellations last Tuesday and Wednesday in many areas as a result of last week’s big snowstorm along the East Coast.
When Peapod sees a storm coming it e-mails customers 24 to 36 hours in advance of their expected deliveries telling them there is a chance Peapod will not be able to deliver, a spokeswoman says. “We want to make sure they can get to the store if they need milk or eggs and not wait to the last minute to tell them we’re not going to get there,” she says.
When it sees it’s not going to be able to make deliveries, Peapod also encourages customers to push back their orders for a few days, the spokeswoman says. She says many do, and that Peapod added capacity late last week to handle the added orders, for example, delivering on Saturday afternoon and evening when it does not normally deliver. She says Peapod does lose business during these storms, though she would not say how much.
She adds that Peapod, which has been operating since 1989 and is the oldest retailer in the Top 500, is used to dealing with bad weather. “Having a lot of delivery locations in New England, it’s an occupational hazard,” she says.
Chicago endured its fifth-heaviest snowstorm on record on Sunday, leading web-only T-shirt retailer Threadless.com, No. 361 in the Top 500, to close its warehouse, which is located in the city. The impact is limited because Threadless enjoyed a strong holiday season, which left it with little inventory, and thus has not been running major clearance sales recently, says Jason Macatangay, vice president of finance. Orders that were placed last week will still be shipped Tuesday morning when the warehouse reopens, so consumers should see little effect from the storm, he says.
PromarkOffroad.com sells snow plows that fit onto all-terrain vehicles, a product that might figure to be in demand during winter storms. But sales have not picked up, says John Ostman, vice president of sales and marketing at Probus Online Inc., No. 685 in the Internet Retailer Second 500, which operates the site and six other online stores. Most of the country has been drier than usual this winter he says, and that’s kept sales down. “Even with a big storm, people seem to have decided to invest in a shovel,” Ostman says.
One e-retailer that’s benefited from the recent wintry weather is Dungarees.net, which sells work clothes and boots, including parkas and thermal underwear. The e-retailer, No. 521 in the Second 500, has an automated system for sending out e-mail with winter-related messaging to customers in areas hit by snowstorms, says Darren Baldwin, e-commerce manager.
“Last week’s e-mail messaging was specific to a blizzard,” he says. “The key word is blizzard, blizzard, blizzard.” The e-mail messages featured warm clothing and a link to a blog posted on the retailer’s web site on how to survive a blizzard. He says the open rates on those e-mails were about 20% higher than normal, roughly 25% versus the usual 18%.
The beauty of these weather-triggered e-mails is they go out automatically with predesigned messaging to areas impacted by severe weather, Baldwin says. He says Dungarees.net uses the Skymosity technology from Email Aptitude LLC to automatically send out e-mail to in customers in areas hit by a storm. The Skymosity technology is linked to the e-retailer’s e-mail service provider, Bronto Software.
Forest Bronzan, CEO of Email Aptitude, says the Skymosity technology lets clients target consumers in each of the 42,000 ZIP codes in the United States. Once they set up the rules, he says, a client can, for example, send out an automated e-mail offering cold-weather gear to every customer in a ZIP code where the weather is below 15 degrees and dropped 10 degrees in the past 24 hours. Or, he says, a restaurant in an area where the weekend forecast is for beautiful weather can automatically send out an e-mail touting its patio seating.
He says Skymosity, which was introduced last year, has created links to nearly 10 e-mail service providers. He says the fee for the service varies according to many factors, including the size of a retailer’s list, frequency of messaging and the complexity of segmentation, and that a typical midsized retailer might pay thousands, rather than hundreds of dollars, a month for the service.
While Bronzan could not provide details, he says his client retailers typically see sales go up when bad weather hits. “You’re reducing some of the friction points of people being out and about,” he says. “They’re more likely to be in front of a computer.”
And those sitting in front of a computer apparently could access most retail web sites, according to Keynote LLC. The company, which monitors the performance of web sites, says it saw no signs that consumers in Chicago or Boston would have seen much slower web site performance over the weekend.