Retail Excellence : Newegg.com: The Power of MarketingAugust 8, 2012
NewEgg.com grabbed the industry’s attention last year by launching its national “Take it From a Geek” multimedia advertising campaigns, and ultimately compelling Best Buy to issue a cease-and-desist order for a television commercial that parodied its Geek Squad.
But the campaign had the opposite effect on consumers who flocked to Newegg.com where they increased the company’s registered user base by 20 percent, from 16 million to about 20 million; contributed to 2.5 million product reviews; and helped the company maintain its status as one of the top online destinations for IT, gaming and consumer electronic products.
The e-tailer is now tracking double-digit growth from $2.5 billion in 2011, which was up about 8.7 percent from 2010, according to Bob Bellack, the company’s former CFO. Bellack was was named North American CEO in February.
“The marketing and branding was a big benefit,” Bellack said. “More people now know what NewEgg is: We have one of the broadest selections in the IT space, great delivery times and great service. The promotion was very helpful in building more relations.”
That type of success generates more resources for the company, which translates to higher goals and a lot more work for everyone. During the last year, NewEgg rebuilt its management team, adding a new CFO and a head of logistics who, along with Bellack, are focused on increasing efficiencies and developing other improvements in every step of the supply chain.
Those efforts also include working closer with vendors for more customer incentives and promotional support, as well as improving all logistics and cracking down on fraud. The company also hired a new head of product and technology who’s in charge of product selection and fulfillment in each customer segment.
“It’s a never-ending process to get better and better,” Bellack said. “We’re making headway, but it’s going to be a ‘forever’ kind of thing.”
Newegg is also continuing a strong focus on customer acquisition and improving customer service in each of its silos. The company divides its core audience into four segments: small- and medium-size businesses, gamers, DIY’ers and deal-oriented consumers. The goal now is to learn more about each customer, hone the different marketing strategies to each segment and attract the right customers.