E-Tailers Try New Holiday Tricks

Darcey Howard needed an idea. The Seattle image consultant wanted to find a
business gift she could give clients-something stylish, yet appropriate for
more than one person. So she went to Judysbook.com, a social-networking site
that lets people stay in touch with friends or business associates, and asked
for input from the members of her network, mostly other marketing pros. They
recommended the Dangle, a $35 portable handbag holder that sits on a tabletop,
letting women avoid plopping their Coach and Gucci bags on the floor. Howard was
sold-on the Dangle and on using the Net for smarter shopping. "You can
spend a lot of time there, reading things and finding stuff," she says.

It’s not only a merry Christmas on the Web this year, it’s
also an innovative one. Forrester Research says that online retail sales this
holiday will surge 25%, to $18 bn. The increasingly strong profitability of Net
commerce is giving retailers the chance to experiment with a stockingful of new
sales and marketing tactics. They’re tapping into technologies such as blogs,
social networking, and wireless phones to draw shoppers to their sites.
"There are a host of new ways to reach out that are more innovative,"
says Forrester analyst, Carrie Johnson.

The experiments are coming from startups to Web giants alike.
Yahoo! is testing Shoposphere, a networking site within Yahoo! Shopping that
offers thousands of reviews, blogs, and shopping lists generated by members. Rob
Solomon, a vice-president at Yahoo! Shopping, says relying on users lets Yahoo
serve markets too small to command space on its front pages.

Sometimes the experiments aren’t about closing sales online
but about finding new ways to market to harried holiday shoppers. Blog
DailyCandy.com offers fashion and beauty tips to the young and hip in eight
cities. This fall it launched a newsletter alerting members to deals in their
areas. Now companies from Apple Computer to Levi Strauss, are lining up to be
included in the online mailing, offering DailyCandy members discounts of up to

Perhaps the biggest potential lies in ventures that want to
tie e-commerce to local commerce, which still accounts for about 95% of retail
sales. Drawing most of the attention is Google Base, a database service from
Google that lets people and businesses advertise almost any product or service
in a city or region. Already, 14.5 mn products are listed on Google Base.

Shop Around the Corner
The search giant is but one of many players in the field,
however. Startup Cairo.com rounds up local advertising circulars and puts them
online to let shoppers know which physical stores in their area offer the best
sales. ShopLocal LLC has the same sort of circular information on its site, plus
what it claims is the first service for comparing prices at online retailers
with those of local merchants. ShopLocal’s chief marketing officer, Dave Hamel
says the site has prices from as many as 700 local stores in some cities.

New York’s GPShopper, with its S’Lifter service, has
attracted attention from retailers as large as Foot Locker S’Lifter lets
people use their cell phones to compare prices at nearby stores and get notices
of local sales. By next year, the company plans to let consumers fill out wish
lists, then use satellite technology to flag them when they walk past a store
that has one of the items on sale. "We want to find out how many of these
places are being used by our customers," says Raul Vasquez, vice-president
for marketing at Wal-Mart.com. "We’ll work with several of them."

No one pretends to know how much business the new
technologies can help Web merchants capture. Still, the experimentation this
season is striking, after years when what passed for innovation was bigger
pictures of products. The changes are starting small. But if they work, look for
a lot more like them for Christmas 2006 and beyond.

By Timothy J. Mullaney

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