Swanson Health Products, a leading natural health retailer, took a different approach to the Black Friday-Cyber Monday selling period this year, resulting in a 12% increase in the companys on-line revenue over last year; versus the declines reported in the financial press. Cyber Monday is traditionally Swanson's second largest day of the year; the Monday following New Year's is the largest.
This year, we realized the real opportunity was to use the large increase in overall web traffic and the shopping frenzy psychology to generate a significant increase in sales, said Ken Harris, CEO of Swanson. Our objective was to capture the natural increase in web traffic and turn it into higher margin sales unlike other retailers who gave away the store to get sales or started the deep discounting earlier to get a jump on competition.
Swanson also realized that Google's cost per click fee would skyrocket during the period and decided to cut back on web advertising and instead concentrate on email marketing to its customer base. The Swanson promotional strategy this year was 20% off Swanson Brand products, which carries the highest gross margin, plus $.99 shipping with free shipping over $50 in purchases. Last year, Swanson offered 13 percent off everything and free shipping for more than $50 in purchases.
The new strategy worked well for Swanson: website visits were up 33 percent; website orders were up 28 percent; website sales were up 12 percent and the gross margin increased 170 basis points (1.7% pts).
We have a strong loyal customer base, which accounted for 74 percent of the sales, said Harris. While our customers were online buying holiday gifts, they took that opportunity to save money stocking up on Swanson products they use every day.
Headquartered in Fargo, ND, Swanson continues to outdistance its main competitors, VitaCost and NBTY's Puritan's Pride and is posting stronger sales growth than Vitamin Shoppe and GNC. Swanson is the largest privately held on-line seller of vitamins and supplements with revenues in excess of $300 million.
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