OverstockArt CEO Critiques Holiday Sales Performance
The holiday selling season is essential for many online merchants. Including David Sasson. He's the founder and CEO of OverstockArt.com, a merchant of replicated oil paintings. The company saw a 25 percent boost in 2010 holiday sales, versus 2009. We talked with Sasson to find out what worked and what did not work for OverstockArt last holiday season.
Practical eCommerce: Give us a little background on OverstockArt.com.
Sasson:"We were set at the end of 2001 and we're located in Wichita, Kansas. We also have an office in China and we have a small office in Israel. I tell people we are a tiny multinational business.
"We deal in handmade oil paintings and frames. We keep all of the product-in-stock in our Wichita facility, and we receive orders through our site and telephone. We try to ship most everything within 24 to 48 hours. Our vacation season is in November and December and it [2010 holiday season] went extremely well."
Our products:
PEC: Can you give us an idea of how big your enterprise?
Sasson:"We have about 1,500 painting pictures in stock and about 15,000 paintings. There are 50,000 to 75,000 options that a client can pick from up to mixing and matching frames and such."
PEC: What kind of internet shopping cart do you use on your website?
Sasson:"We utilize Yahoo! Merchant Solutions. We customize it, but the customization isn't immediately visible unless you are a merchant or someone that is knowledgeable in ecommerce."
PEC: Can you give us some rough metrics on how your company grew during the 2010 holiday season versus 2009?
Sasson:"The 2009 season was remarkable for all of us. We had excellent growth. But during 2010, we climbed from 2009 and so we're expecting plenty of growth. In general, this past [2010] holiday season, we saw growth to approximately 25 percent.
"In the first part of the holiday season, we had amazing growth -- somewhere near 100 percent from the November period. For December, we were really expecting something much stronger than what happened, but we were happy after our breakout season. To still have the ability to grow by 25 percentage we believed was pretty impressive."
PEC: What are a few of the things that you think contributed to the development?
Sasson:"One of those things is inventory management. We manage our inventory to where our bestsellers were in stock during the whole holiday season as opposed to last year where we ran from a whole lot of our bestsellers early on.
"The next issue is improvements throughout the year to our site -- improvement in navigation, improvement in the way a painting is seen, better zoom features, the'view artwork in a space' feature we added -- all these features enhanced the customer experience before buying.
"Next is the customer support we have been providing. It's caused lots of repeat purchases. That's been a motto of ours in the start, and it keeps paying off annually."
PEC: Did your conversion rate increase this year versus last year?
Sasson: "Yes, it did. It increased this year during the year. Virtually each month we were beforehand. Especially, during the holiday season, I feel the conversion speed itself was up 12 percent.
"We do not normally disclose our conversion speed. Quite honestly, it's not so high. It is almost embarrassing. However, the product that we deal in is so visual, and it is not a conventional web-type item, therefore we believe our conversion speed is always likely to be below average. We do not like to give the specific numbers. Through time, we have improved virtually every year, but we have still got a long hill to climb, which we are battling daily."
PEC: Can you name a couple of bestselling products that you'd this holiday season?
Sasson:"Our bestselling painting virtually every month is Van Gogh's'Starry Night,' and it really usually picks up steam throughout the holiday season. It appears to be a very strong December product, beyond the remainder of the year.
"Number 2 is Van Gogh's'Café Terrace,' and really this year for probably the first time it had been ahead in earnings at the end of November -- to the year -- compared to'Starry Night.'
"The next one is Klimt's'The Kiss.' It is a powerful seller day in, day out."
OverstockArt.com home page.
PEC: How much can a replicated painting cost on your website?
Sasson:"A consumer can purchase a painting for somewhere around $100, depending on the combination and depending on the size."
PEC: Are they original oil paintings?
Sasson:"They're handmade oil paintings. We do not use the word'first' because we do not want consumers to confuse it with the first that Van Gogh made. They're produced by one of our artists."
PEC: What type of advertising and SEO campaigns did you use over the holidays?
Sasson:"We sent out a postcard -- a direct mail piece -- which worked really well for us. [We sent a postcard to] everyone that bought from us in the last couple of years. Thus, it is a list of our own clients. It's a really clean list and the answer was very good. We do not do that quite often, but we decided to do it in November and the return was exceptional. It is one of the things we are going to improve for next year, really.
"Our search engine optimization has gone quite well. We have seen improvement in conversions and advancement in visitors, largely from Google. That is where we put the vast majority of the effort. But we have definitely seen improvement and we utilize eXclusive Concepts for that. They handle our search engine optimization.
"Our cost-per-click marketing (bulk from Google AdWords) is the only component of our marketing that didn't perform well. We have seen an increase in traffic and a huge drop in conversion."
PEC: Did pay-per-click perform better the year before?
Sasson: "Yes, it did. But, we think that we have had click fraud. We have a threat from a competitor who said,'If you do not stop using our name into your advertisements or as one of your key words, we'll hire a click farm business in India which will click on each one your ads.' We believe we have had click fraud in December.
"Google is exploring it and there are no results yet, so I do not understand. However, with the low performance and the danger that we obtained, we're fairly confident. If you believe what click fraud may perform, not only are you paying for bogus traffic, but you are not appearing later in the day since they squeezed out your whole budget for the day. Thus, it's very serious.
"We feel that that's part of the reason that cost-per-click advertising didn't function, though I will need to also mention that CPC hasn't been a fantastic performer for us. The gain in the cost of clicks and the aggressive nature of it -- it has been worth doing but it had not been a really successful marketing strategy for us before [the click fraud]. December was very disappointing due to the click fraud, but we were not completely happy with the results even before it. Let's put it like that."
PEC: Do you have a printed catalogue?
Sasson: "Yes. We send a catalogue to people who've visited our site and requested a catalogue. In addition, we send a catalog with our merchandise, but we do not just drop a catalogue to a mass population. We do not feel as the return on investment will be there for us to do so. But it's been a powerful tool to reach out to clients and to reach out to individuals who wish to be clients."
PEC: What's OverstockArt doing on the social networking kingdom, and how is it doing for you?
Sasson:"We do a great deal in social networking. We've got our own Facebook page. We also constructed artist Fan pages on Facebook. We assembled a (http://www.facebook.com/GustavKlimtPaintings), and for different artists that we take. We handle all these different Facebook possessions and we see all of the communications between the various fans of the webpage or another artists' fan pages. There's a whole lot of activity. It's a fantastic place for communicating and for folks to get to know us.
"We also have our very own blog which we post interesting articles on, a few we write, some that other individuals write. And we certainly have quite a lot of traffic from people who are interested in information about décor or about art or about artists and art history.
"Up to productivity, so far as direct sales dollars, it [social media] is marginal at the moment. It is not something that makes us lots of money. Traffic [on our Facebook pages] has become about 800 percent in the holiday season this year compared to last year. Now, it seems really impressive at the traffic amounts, but it was not very large this past year and thus it was not that huge even though it grew a lot. But the close ratio is extremely low. It looks like the manner that the people are in when they are on Facebook isn't so much purchasing mode, it is a communication mode. It's a fantastic place to network and have an open, uncontrolled communication with our clients, but at the exact same time we don't find a enormous effect on direct sales.
"We also attempted Facebook advertisements but the results weren't great so we stopped."
PEC: Anything else on your mind today for our readers?
Sasson:"The number one information I have for every individual building an ecommerce company is your best asset is your title. The clients regard your name for a brand so look after the customer.
"It seems so basic and so simple, however we have a program we call devotion toward happiness. We want our customers to be happy with the artwork they buy and that dedication is what brings customers back to us. We have had over 50 percent of repeat purchases during the holiday season and we are not a naturally repeat business. However, because we take such great care of our customers, that is why we're seeing repeats.
"You can spend a great deal of cash on cost-per-click ads and such, but if you do not look after your customers, they don't come back, I am unable to see how a company can grow. If I could give just one advice, I would say just care for your customer."
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