Marketing on the Internet Plan

By: Trevor LaRose, Jacob Mann, Pam Arbelaez, Doug Levy, Allie Dethmers

Overview

Touch of Modern is a members only website and application that focuses on

selling lifestyle products, men’s fashion accessories, and trend setting technology. Touch

of Modern was was founded by Dennis Liu, Jonathan Wu, Steven Ou, and Jerry Hum in

2010 and launched in 2012 in San Francisco, California. T hree months after launching,

the website achieved $1M in revenue.

In August 2012 Touch of Modern was sued by Fab.com for alledgedly

infringing on Fab.com’s trademarks, trade dress, and copyrights. Fab.com

alleged that Touch of Modern’s website copied their site aesthetic as well has

their visual icons and product descriptions. The lawsuit was settled out of court

for an undisclosed sum in March 2013.

Although almost 1 million people like their Facebook page they have

poor social media engagement for being such a tech savvy company. Their

last post was October 19 (over two months ago). Their instagram has about

58.9k followers and is updated every week to two weeks. They have 11.8k

followers on Twitter but not the latest instagram post. Overall their social

media lacks consistency and timeliness.

Most recently Modern Touch passed the $100 million annual run rate

mark (ARR) in October and their millionth order this past September.

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Goals

1. Increase net-sales

2. increase awareness

3. Improve customer acquisition

4. reduce homepage bounceback rate

5. Increase conversion rate

Competitive Analysis

Touch of Modern has two main competitors. The first competitor, The Gadget

Flow and the second Fab.com.

Gadget Flow was founded in 2012 and has been extremely successful since their

premier. Gadget Flow produces 10 new products every day including weekends and

holidays. Additionally, they have an application that can be downloaded via smartphone

or desktop. Members of Gadget Flow can create a wish list and make it public or private

depending on their preference. Like other social media sites such as pinterest, the

consumer on Touch of Modern is able to customize their newsfeed and favorite product

categories. Furthermore, Gadget Flow’s website design is seamless and extremely

appealing to the modern day web user. The site is very approachable,not overly modern

looking, and can appeal to a wide range audience. (Refer to Appendix C for screen shot)

Fab.com is another company that offers a wide array of products. Fab was

founded in 2010 by Jason Goldberg and Brandford Shellhammer. The site originated as

as social network for gay men and their friends. This soon turned into a way for that

network to see new designs and soon after, sales of those designs. Five months later

fab.com reached 1 million members. In March 2015 PCH International, an Irish custom

design manufacturing company that helps start ups develop, manufacture, and package

products, bought Fab for an undisclosed amount of money. In 2013 Fab had sold over 7

million products since their launch. Fab.com is tailored to a feminine target audience.

Their website is aesthetically pleasing and very easy to navigate. When purchasing an

item on fab.com it is not demanded the consumer becomes a fab member. Overall, the

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products, website, and overall feel of the site appeals to a large target market and is a

strong competitor in the online trendy sales market. (Refer to Appendix D for screen

shot)

Target Audience

Touch of Modern’s main audience is primarily men ages 24-34. These men are just

out of college or moving into their first apartment. Men make up 70% of Touch of

Modern’s app sales. Since Touch of Modern focuses on curation and personalization to

differentiate itself from the competition, their secondary audience is women who are

trendsetters and tech-savvy.

Budget

In order to determine Touch of Modern’s advertising budget researched Fab.com and

Zappos. Touch of Modern uses a similar business model. These companies currently use

about 2% of their revenue for advertising, they are able to have low spending on internet

marketing since, they handle a lot of these affairs internally. This year Touch of Modern

increased its revenue exponentially to 100 Million dollars, resulting in an advertising

budget estimate of approximately $2 Million.

SWOT

I. Strength

● Unique products

● Low overhead

● Brand appeal

● Great SEO

● Free marketing by “Word of mouth”

II. Weakness

● Website design

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● Log in requirement

● Short duration per individual offer

● Lack of strong social media presence

● Lack of consumer engagement

● Expensive shipping

III. Opportunities

● Large and growing target market

● High social media engagement amongst target market

● Strengthening economy

● Impending transfer of wealth to target market

● Consumer demand for stronger customer service

IV. Threats

● Already established competitors

● Local competition with unique goods

● Increased rate of cyber-crime

● Fickle customer loyalty

Recommendations

Recommendation I: Remove log-in requirement

Presently, Touch of Modern does not even give customers an option to navigate

past the homepage and view inventory without registering for an account. This presents

an unnecessary barrier to entry and turns away potential customers. Though the

registration process is fairly simple, some customers may only intend to make a one-time

purchase. Also, many people demand instant gratification and don’t register unless they

see something they want to buy. Though Touch of Modern gives you the option to log-in

using your Facebook, many millennials may feel uncomfortable sharing their data.

Removing the log-in requirement to view the online store would allow people to browse

Touch of Modern’s inventory without registering, reducing the bounceback rate.

Removing the registration requirement to check out would result in more conversions.

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A new UX and customer journey would be created for customers who wished to

make a purchase without registering. The home page would also be populated with

offers and promotions fed by the search retargeting of a recognized user. The existing

website would be preserved for customers who wished to create an account. This

implementation is the gold standard for eCommerce and is used on websites such

newegg.com. Additionally, to encourage customers to register, Touch of Modern should

offer incentives such as customer loyalty programs (outlined later) and access to other

promotions tailored to their browsing history.

The best way to evaluate the success of removing the log-in requirement to view

the online store would be to track bounce back rates from the homepage. The best way

to evaluate the efficacy of removing the registration requirement for check-out would be

to track the amount of conversions made by customers who were recognized but not

authenticated. Pure sales figures would be the best financial measure of overall success.

Furthermore, we could look at our monthly customer acquisition rate and compare the

amount of new authenticated customers vs. new recognized customers, who checked

out as a guest. This would allow us to see if this initiative increased customer acquisition,

as well as seeing if the option to check out as a guest was cannibalizing users who would

have made an account. In that case, we recommend that additional incentives to register

be offered.

Recommendation II

Our second recommendation is to increase advertising on Instagram. This can be

done in numerous ways and will improve sales and increase awareness. We found our

target demographic to be especially avid users of Instagram. Advertisements on

Instagram for Touch of Modern would have a lot of reach. An example of an effective

Instagram campaign was executed by the brand Fancy. Fancy is similar to Touch of

Modern and showcases beautiful photos of their products to advertise on instagram.

This increases awareness of the brand and improves sales dramatically. Advertising on

Instagram is also economical and permitted by our budget. In addition, marketing

communications on Instagram are dynamic, which will allow us to update new deals on

products accordingly. Consumers would be inclined to visit Touch of Modern if they see

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sponsored content on Instagram. To assess our success, we plan to conduct statistical

research; tracking hits on a specific landing page to see how many came from Instagram.

We aim to have a 25% increase in sales within the first two months of these campaigns.

Recommendation III

With a stunning array of products for anyone looking for something contemporary

or unique, the Touch of Modern website’s usability should reflect their modern inventory.

The current formatting of the website can be somewhat confusing, even to an

internet-savvy user. Simply put, the website lacks certain industry standard features that

are expected and necessary. Adding a search bar, more effective and descriptive

categories, placing site navigation at the top along with social media links, and adding a

context button would lead to a much more intuitive website that would drive sales. The

features that we recommend be implemented make the website more user-friendly,

easier to navigate, and to encourage more frequent sales.

To match the very appealing inventory and cutting-edge feel of Touch of Modern,

the website should be updated to reflect other e-commerce sites and bring the best,

easiest-to-use navigation features to allow users to experience everything the brand has

to offer. Currently, their website lacks simple, expected features such a search bar,

clearly defined and navigable categories, and a “context button” which would allow users

to easily see the sites navigation and information such as social media links and contact

information. According to Alex O’Byrne and Piers Thorogood (2011) in their article they

state, “Creating a web site navigation feature that resonate with the target audience is

recommended instead of focusing more on company structure...The integration with

other social networking web sites such as Twitter and Facebook can be beneficial in the

promotion of web content to others.” Clearly linking their website to social media would

allow for natural promotion across different media as well as allow for consumers to

share their content and get word-of-mouth advertising at low effort. Currently, their links

to social media are at the very bottom of the page that requires much scrolling to reach.

By placing them at the top they would receive much more attention and ultimately, more

interaction. The website currently has a very interesting navigation feature that allows

the user to select a certain category of person to shop for such as: “the adventurer,” “the

gadgeter,” and “the watch aficionado.” However, the placement of this section is

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confusing, mixed among products and content, making it easy for users to simply skip

over it while scrolling without even realizing. By placing this at the top, it would increase

visibility and make it easier to find gifts for someone, which would ultimately lead to an

increase in sales. With the implementation of these website design features, they would

solve the problem of bounce by users becoming frustrated by an unintuitive layout. A

user may want to search for something they want or something they had seen

previously, but there is currently no way to do that. To measure the success of these

improvements, the time spent on the page, number of pages visited on the site, and

bounce could be looked at to see how they have changed after they have been

implemented. An increase in sales and more frequent page visits would also come from a

more intuitive website as users would be able to more easily find what they are looking

for and will have a more pleasurable shopping experience.

Recommendation IV

Posting more frequently on social media outlets such as Facebook and Twitter

would be another great way to grow the brand, establish open communication with their

followers, increase engagement and better communicate special offers to customers.

With flash sales and striking products, social media is the perfect medium to advertise

products and encourage engagement with the company. Currently, the brand posts on

social media sporadically, sometimes going months between posts. We feel that they are

leaving money on the table by ignoring the tremendous power of social media. We

recommend that the brand post on social media at least weekly to share their flash sales

and to demonstrate their sleek, eye-catching product line.

With social media use so prevalent amongst our target market on all platforms,

not using this media to the fullest is a waste of potential communication and conversion

opportunities. The Touch of Modern business model and product line aligns perfectly

with our customer base. Frequently updating social media with vibrant, striking images

would lead to more sales, increased interest, and more discussion among brand loyal

followers and the general public that sees the posts. Joshua Brennick (2014) explains in

his article the importance of using images to increase awareness on social media when

he says, “With the demand for quality, visually stimulating content growing, becoming

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familiar with the importance of including images in your social content should be part of

your online marketing strategy. Photo posts on Facebook have been shown to average

53 percent more ‘likes’ than a typical post, further indicating that perfecting your visual

strategy will allow you to increase the presence of your brand and gain the attention of

potential customers.” This would help solve the problem of infrequent and poor

communication with brand followers. It would allow for more open discussion about

products and sentiments about the brand itself. The effectiveness of this strategy would

be measured by sales increase, social media engagement, and overall sentiment which

could be measured on a site such as Trackur. More positive sentiments about the brand

would be representative of consumers engaging with the brand in an effective way that

makes them feel heard. Consumers will engage with the brand, making them feel heard.

Consumers will also be more encouraged to share positive sentiments about the brand.

Social media will allow customers to express their feelings about the large array of

stunning products Touch of Modern has to offer, boosting engagement.

Recommendation V

Currently, our client uses a guerilla style marketing tactic via email. Touch of

Modern bombards its subscribers with more than three emails a day. This style of

reaching out to its consumers can have its benefits but mostly will have negative effects

for multiple reasons. Firstly, this tactic can be very aggravating for a consumer and they

could unsubscribe. The other main reason is that we don’t want the customer to become

accustomed to the emails and begin ignoring them. As a result, we recommend

minimizing the amount of emails sent to two emails per week. This will allow the email

to have more of an impact on the consumer. The emails won’t be spam to them but

instead, valuable information that the consumer can use to take advantage of a great

sale. We would also like to allocate funds to track what our consumers’ purchase and

what they view on the website. This will allow us to send emails that will best correlate to

the consumers needs and wants. Companies such as Percolate perform research and

statistics marketing strategies, strategies that can help Touch of Modern target

consumers on an individual basis.

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Recommendation VI

We believe that a good way to keep revenue stable and retain customers would be

to implement the option for a subscription driven, customer loyalty program. Since the

items on Touch of Modern are only on sale for a short time, this results in customers

missing out on certain items and requires customers to constantly check out the website,

a burden customers won’t always have time for. We propose a loyalty subscription

based program that is divided into different tiers depending on how much the consumer

would like to spend ranging from $200 to $20 monthly. The monthly items will be tailored

to the consumer based on his or her past purchases and a quiz taken at the time of

subscription. One benefit of having a subscription for the consumer will be that the items

they receive, will range up to a price higher than they are paying for it. We will assess the

success of this plan by seeing how many people subscribe to the plans and seeing if

there is a growth on the amount of money they spend and items they buy. Buyers will

still have the option to purchase items without being part of the loyalty club and we will

also measure how many purchases they make in addition to the club. Another function

we plan to offer is for buyers to be able to do a one time upgrade to the next tier if they

prefer an item that is offered on a different tier. In order to execute this plan we advise

to have a 3 month trial period. During this trial period we recommend that this option

only be available to selective customers that are representative of the target market we

hope to reach. Overall this plan will create loyal customers, steady revenue, and a

customized interaction with the consumer.

Conclusion

With a burgeoning target market about to have access to more disposable income, Touch of Modern has the perfect opportunity to grow their sales. Their customers are always looking for the next big thing, demand high quality, and are willing to pay for it. Touch of Modern’s inventory differentiates it, but its website log-in requirement prevents many customers from ever seeing it.

Touch of Modern also has an abysmal social media presence, often times going

months between posts. They are missing out on a very cost-effective way of reaching

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their target market, who are especially avid users of social media. Additionally, Touch of

Modern uses antiquated web design with cumbersome navigational elements. Instead of

a streamlined interface with readily apparent navigation, Touch of Modern buries the

option to sort merchandise categorically below the fold and deep within other content.

Touch of Modern further aggravates its customers with e-mail reaching spam

proportions, often sending over three e-mail promotions a day. This results in customers

unsubscribing from the e-mail list. Customers who don’t unsubscribe may get lost in the

noise and filter out promotions that might be relevant to them.

Implementing a subscription based business model is another opportunity for

Touch of Modern to grow their sales among already loyal customers, who will be the first

invited to participate. Subscription based business models have the advantage of

providing continual, monthly income. Selling customers a subscription eliminates some

of the need to encourage consumers to repurchase. If they continue to receive a box in

the mail, they will continually be reminded of our brand when they enjoy the products.

Many customers also often forget to unsubscribe from such services.

We believe that implementing these suggestions will immediately make Touch of

Modern more profitable, with very little upfront cost. Removing the log-in requirement

from the website will reduce Touch of Modern’s bounceback rate, as well as increasing

page views on their store. This solution will cost very little to implement. Social Media in

particular will be a driver of higher margins, as it will increase sales and decrease the

overall cost of sales. Social media’s only cost is production. Costs can be restrained by

relying upon social media interns and user generated content. Reducing the amount of

spam e-mails sent out to customers will decrease the cost of producing said content, as

well as increase the efficacy of the promotions that we do send. A subscription based

model will cost little to implement, immediately increase sales and allow revenue to be

projected ahead. Implementing our plan will increase impressions, increase sales,

reduce the average cost of a sale and increase the total amount of customers, all cost

effectively and for relatively little upfront cost.

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Appendix

A

B

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C

D

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References

Brandon, J. (2015, August 7). Traction Watch: The smart decisions leading Touch of

Modern to $100M in sales. Retrieved December 9, 2015.

Brennick, J. (2014). Add a Visual Element to Your Social Media Strategy. ABA Bank

Marketing & Sales , 46(3), 43.

O'Byrne, A., & Thorogood, P. (2011). Website mistakes: the 10 to avoid. Bookseller, (5487),

22-23.

Zmuda, N. (2008, October 17). Zappos. Retrieved December 9, 2015