The Fragrance Outlet built its business on outlet malls, but with mall traffic declining it is looking elsewhere for new growth.
The discount perfume retailer has 108 locations and all but three are in outlet centers. As outlet mall traffic—and thus Fragrance Outlet’s traffic—has steadily declined, the retailer is following a new path that involves more e-commerce and digital marketing, says CEO Scott Kanter.
“Over the past 12 months, we’ve seen a reduction in [store] traffic of about 5-10%, and that’s been happening over the past few years,” Kanter says.
The e-retailer launched its first e-commerce site a year ago and at the beginning of September deployed beacons at 97 of its stores to keep up with consumers’ preferences and as a way to bolster sales.
The beacons—small transmitters that can sense a smartphone’s location—are a way to drive in-store traffic, Kanter says. The beacons are linked to shopping deals app Shopkick Inc., which has 23 million monthly active users, Shopkick CEO Bill Demas says. Integrating with Shopkick allows Fragrance Outlet to send messages to consumers, have its promotions displayed in the Shopkick app and reward shoppers for visiting the store and purchasing.
A shopper who has the Shopkick app will receive 35 “kicks,” or points, for walking into a Fragrance Outlet. The beacon, which is placed at the entrance of every store, will sense that the consumer entered the store and automatically load points into her Shopkick app. The shopper can redeem the points in Shopkick for gift cards to the more than 100 retailers in the app.
To encourage consumers to purchase more, when a shopper walks in the store the beacon sends the message, “Earn Kicks at Fragrance Outlet when you purchase with a linked credit card” to the lock screen of her smartphone. In the app a consumer can save her MasterCard or Visa credit card information, linking it to her account. Shopkick is not compatible with other credit cards. If she uses that credit card to buy something in the store, she will earn points for every dollar she spends. She also will receive bonus points if she spends a certain dollar amount, such as 150 points if she spends $50.
Fragrance Outlet features its promotions in the app’s news feed that consumers scroll though. The app uses geolocation technology to determine where the shopper is, and only consumers that are within a certain distance, such as 50 miles, of a Fragrance Outlet will see its promotions.
Fragrance Outlet expects a “sizable” increase in sales and conversion because of the beacon program, Kanter says, without revealing specifics. The retailer pays $100,000 to $200,000 annually for the Shopkick integration, Kanter says. It took less than two months to start the deployment, and Fragrance Outlet did not hire additional employees for the project.
Fragrance Outlet is letting consumers know about the Shopkick app via social media, its email newsletter and in-store signs.
The pilot is still new, so Fragrance Outlet has not yet tapped into all of the features. For example, the retailer could program the beacon to send a message to shoppers in the parking lot to encourage them to come into the store.
Shoppers do not receive Shopkick points for shopping on FragranceOutlet.com, as the tool markets only to in-store consumers, Kanter says.
E-commerce, however, is still key to Fragrance Outlet’s growth. In less than 12 months, FragranceOutlet.com has become the retailer’s largest store, generating more sales than any one of Fragrance Outlet’s physical locations, Kanter says.
E-commerce is 6% of Fragrance Outlet’s annual sales, says Cataldo De Franco, the retailer’s director of e-commerce. 26% of its online shoppers are repeat shoppers, he says.
The goal is to have 15-20% of sales be online by 2020, De Franco says. He is working to do that via social media marketing, such has having buyable pins on Pinterest, and search marketing, such as via Google Inc.’s product listing ads—the listings that show a product’s image, price and the retailer selling it prominently in Google results for product-related searches.
In the U.S., 58,706 consumers visited FragranceOutlet.com each month, on average, between June and August, according to data from digital analytics firm SimilarWeb. In that period, 88% of site traffic stemmed from smartphones and tablets, according to SimilarWeb data.Favorite