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."
So in March, JensonUSA took its price match feature a step further by offering the reported lower prices to any customer coming to its Web site, and across all channels. "When a customer submits a price match, we look at the CommercialWare database to see if there are any other identical matches. If there are, it automatically approves it," instantaneously lowering the price across all channels, explains Cachat. "If there aren't [matches], it comes into our customer relations department where they review and verify the information. At that point, a decision is made on whether or not that price is to be offered to everyone else."
Since JensonUSA implemented this strategy, sales have rebounded. "By the end of April, our business had returned to the prior year's levels," says Cachat. "It's made us more competitive."
Instrumental to that process has been the analytics, as well as the real-time product, order status and inventory information, and the real-time transfer of that information between JensonUSA's customers, employees and vendors. Cachat says, "Since we're able to see everything that's going on, we can make decisions quicker and change with the marketplace."