JensonUSA Plays Matchmaker to Boost Sales
Problem: Bike equipment retailer JensonUSA's sales were slipping.
Solution: Implement a "pricematch" feature on the Web site to dynamically match competitors' advertised prices.
Results: Sales are back up to 2004's levels.
After 12 years in business, bike parts and accessories retailer JensonUSA has grown into a $10-million-a-year business with 20 employees, a retail location, a catalog and a thriving e-commerce site. However, as a provider of products that aren't exclusive to JensonUSA, there's always competition to look out for. And by the beginning of 2005, the Ontario, Calif.-based retailer found its sales were off by 18 percent, with key revenues down 50 percent.
Luckily, the company already was in a position to identify one of the root causes of its sales troubles. Some two years prior, it had implemented CommercialWare's CWDirect—an integrated applications suite that manages the retail transaction lifecycle, including merchandising, fulfillment and customer service—as the backbone of its e-commerce infrastructure.
As part of that process, JensonUSA launched a "Find a Lower Price? Request a Price Match" feature on its Web site. When a customer reported seeing the same product at a lower price elsewhere, the retailer would verify the information and, if valid, honor the lower price for that customer.
Mike Cachat, president and CEO of JensonUSA, explains, "With CommercialWare, the history is stored on each price match that's submitted, so we can run analytic reports to show where these prices are being found." Analyzing that history revealed that much of the retailer's competition was coming from eBay, where retailers undercut manufacturers' minimum advertised pricing. "eBay retailers were selling products at a discount," notes Cachat. "And we're in a very price-sensitive industry, so customers weren't buying from us be-cause we're all selling the same stuff."
Going a Step Further
While the price match feature helped to offset some losses by meeting the competitive prices for those customers who reported a better deal, it wasn't enough. "We realized that a large portion of the population wasn't going to go through the headache of telling us there's a lower price, they're just going to buy [the item]," says Cachat. "It did increase our business slightly, but we didn't see the big increase until we made those prices available to everyone."