Online marketers stay in constant contact with customers through auto-reorder programs
Nothing keeps customers loyal like continuing to send them items long after they’ve ordered. Auto-replenishment programs, which allow shoppers to opt to have products sent to them periodically, can help keep companies on consumers’ “favorite merchant” lists.
Of course, this won’t work with every product category (Mack trucks come to mind), but areas such as vitamins, drugs, cosmetics and household supplies seem likely contenders.
“Obviously it’s a good way to keep customers,” says direct marketing veteran Lester Wunderman. “Instead of reselling them every month, it’s so much better if you can sell them once and keep supplying them. It’s a form of subscription. Why sell one magazine at a time?”
The Petco.com site run by Petco Animal Supplies Inc., San Diego, has an auto-refill service called Bottomless Bowl. Customers buying products such as food, treats, litter and other staples that need frequent replenishment can set up the system to do so from every one to eight weeks. The system notifies customers by e-mail that the order has been shipped. The credit card is automatically billed (and as a courtesy, Petco.com tells customers if the card is about to expire). Customers can cancel an order by calling or e-mailing.
The service was started by Petopia.com when it launched in 1999. Petco acquired Petopia last December.
About one-third of all Petco.com shoppers participate in the Bottomless Bowl program and the company wants to build that base even further. Don Cowan, Petco’s director of communications, says the company views the program as important to the site’s success.
Petco won’t reveal numbers but Cowan says Bottomless Bowl customers spend more than other shoppers at the site because of the frequency of their orders. Bottomless Bowl customers shop, on average, three times more frequently than those who are not enrolled in the program. Those who set up an account with at least six shipments can save anywhere from 6% to 35% on their orders.
Bottomless Bowl is promoted throughout the site. “It would be difficult for most shoppers to miss the fact that the program is available and offers convenience and value,” says Cowan.
He adds that the service helps Petco with its fulfillment. “It helps better manage needed inventory levels for many of the staple items that people order,” he says. “Projected product needs can be easily determined based on the number of upcoming Bottomless Bowl orders.”
The program isn’t the only one for Petco.com customer management. The site has three newsletters — “Petco Post,” “Petco Cares” and “Bounce Back” — with information and offers.
In its 530 stores, Petco has a customer loyalty program called Petco Animal Lovers Save, or PALS, which has several million members. It provides those members with savings throughout the store, and is designed to provide them offers on products they purchase on a regular basis. The company tracks every purchase members make so it can offer them special discounts on the brands and even the sizes they purchase, Cowan says.
Vitamins and drugs are another good candidate for auto-refill programs. Online pharmacy WebRX.com inherited an auto-reorder service in June 2000, when its parent company, HealthCentral .com, acquired Vitamins.com, which had such a system in place. The service began on WebRX.com in November.
WebRX.com’s site was put together last year after HealthCentral.com made several acquisitions, including Vitamins.com, DrugEmporium.com and More.com, which sells comfort living products such as humidifiers and ergonomic chairs.
Right now, the auto-refill service is only for the WebRX.com products but the company hopes to expand it, says Robin Raborn, director of investor and public relations for HealthCentral.com.
The most popular product types for the service are in the vitamins category, even for WebRX.com customers not coming in through the Vitamins.com customer base or URL. Products include vitamins, multivitamins, sports nutrition, minerals, supplements, specialty formulas, antioxidants and herbal teas.
Other popular items include Gillette Mach 3 razors, L’eggs pantyhose, hair color, contact lens solution, toothpaste, shampoo, soap and nail polish remover.
“Vitamins are probably the number one product for auto-reorder because you can project how much you use,” says Raborn, who adds that it’s hard to measure how much the service has helped sales because “we just started it and haven’t really promoted it.”
WebRX.com offers 25,000 SKUs of vitamins, minerals and supplements; health, beauty and personal care products; maternity, allergy care and back care products; and vision care products. The average order size at the site is $79 and 45% of its orders are from repeat customers.
In another CRM activity, WebRX .com sends out customer-retention e-mails with specials twice a week. (It has e-mail addresses for 1.3 million customers.)
HealthCentral.com, which had $40 million in revenue last year and is projecting $60 million for this year, also operates health information sites HealthCentral.com and RxList.com. HealthCentral sends out topical e-mails on such subjects as allergies, self-care, women’s health, men’s health, family senior health, weight loss and sexual health.
The company was founded by Dr. Dean Edell and James Hornthal in 1996 and it launched its first content site in November 1998. Its own promotions are helped along by Edell’s mentions during “The Dr. Dean Edell Show,” which is heard on more than 400 radio stations. Raborn says the company is beginning to promote WebRX through its own e-mail lists.
Last June, online retailer Egghead.com, Menlo Park, CA, launched its office-supplies site, working with distributor United Stationers. Egghead is branching out from software into other products (its flagship software business now accounts for only 10% of sales).
Merle McIntosh, Egghead.com’s senior vice president of merchandising, says the company is still adding services and by the second quarter of this year it should have an auto-replenishment service up and working. The customers will be able to go in and adjust the lists and frequency at any time, McIntosh says. “The big incentive is efficiency,” he adds.
Other companies do not offer full-fledged auto-refill but do have various reminder services. WebRX competitor Drugstore.com has an auto reminder service for prescriptions and other items. Called Your List, it helps users keep track of their previous orders and favorite products.
GetFirstAid.com, which sells first aid kits according to OSHA requirements for particular industries and company sizes, has an automatic e-mail reminder service for customers to check their kits and reorder what’s needed. The company may broaden the service into a full auto-refill program.
Several office supply companies say they don’t need an auto-replenishment service because they offer next-day delivery.
Tom Graham, president of AtYourOffice.com, Washington, DC, says that in customer research “neither e-mail reminder nor auto replenishment was well received. With next-day delivery you don’t have to worry about it.” He adds that, with products like ink cartridges, the issue of shelf-life is relevant: “We do that storage for them.”
AtYourOffice.com, the office supply sales division of Office.com, which is owned by Winstar and provides content for people who run small businesses, does maintain a system similar to Drugstore.com’s Your List, called Frequent Purchases. The service allows schools, businesses or individual customers to build lists of their favorite items. This way when it’s time to reorder they simply pick items off the list.
Originally the entire list would be put into the shopping cart. But, Graham says, responding to customer feedback the company added an add/remove system so customers could pick and choose.
AtYourOffice relies on other customer contact techniques, most importantly its dividend rewards, a rebate function that puts 2% of the price of a purchase into a set-aside pool that can be applied to the next buy.
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