Drugstore.com Claims Success With Pre-Sales
Amazon.com Inc., part owner of drugstore.com and a common user of the pre-sell tactics for popular books, was the inspiration behind this effort for P&G's dental whitening strips.
"You're basically putting a reservation in for an item that is not yet in the market," said Mike Concannon, vice president of merchandising and pharmacy at drugstore.com, Bellevue, WA.
The pre-sell for the over-the-counter whitening strips took place April 15 through May 7. Drugstore.com accounted for almost one of every five Crest Whitestrips units sold to consumers May 7-21, when products were shipped.
Drugstore.com would not release the number of Crest Whitestrips units sold during the entire pre-sell period. But Concannon said the response was encouraging for a $40 product that promised whiter teeth, P&G's answer to an increasingly popular trend.
"For the average consumer product company, Wal-Mart does at least 20 percent of your consumption, some brands 30 percent, some it's even more," Concannon said. "So we were selling at a rate equivalent to Wal-Mart for a couple of weeks."
To generate demand, the product was allotted valuable real estate on drugstore.com's home page. Accompanying information sold the concept of regularly using strips to whiten teeth instead of costly visits to dentists.
"Most consumer products are line extensions, they're either $5 or $8 items, so this item was uniquely suited for [pre-sell] because it was a $40 to $44 item," Concannon said. "People are a little more predisposed to put down money.
"You probably wouldn't pre-order the 50th version of Tylenol that's coming out that costs six bucks," he said. "But with the Crest Whitestrips, you're taking a process -- going to a dentist, it costs anywhere from $250 to $400 -- and reducing the cost to $40."
Drugstore.com's task was getting across this value proposition to consumers, "so it makes sense for you to put your credit card out there early," Concannon said.
To place orders, consumers were required to complete the steps associated with a regular transaction. As an incentive, free shipping and a free small tube of Crest Whitening toothpaste were offered to early-bird orders placed during the pre-sell period.
"The [Crest] Whitestrip is ... not a toothpaste," Concannon said. "It's a treatment regimen, so it does not supplant having to brush your teeth. Plus it's an incremental purchase."
Once consumers bought the item, drugstore.com advised them about the product's expected shipping and delivery dates. After P&G dispatched products for fulfilling orders, drugstore.com sent customers another reminder of their order status.
Outbound messages played a key role in driving demand. In the first two weeks of April, an estimated 200,000 e-mails dropped to selected customers culled from drugstore.com's database. Mentions of the new Crest product also ran in the company's biweekly online newsletters to the entire database.
"Basically, no customer at drugstore.com was left untouched, but the target audience had more specific communications," Concannon said.
Amazon pitched in with mentions on its home page, possibly some of the most valuable real estate in Internet retail.
P&G's move to pre-sell -- also initiated on the corporate pg.com site, but as a kind of sampling effort -- is part of a trend in the health, beauty and wellness category. Marketers now are seeking to hike prices with the launch of premium items.
Concannon pointed to skin care as an example, "where everybody has taken the price point from $6 to $10 to taking it to $20. From Roc to Olay Effects to Neutrogena Visibly Firm, everybody is introducing higher price points. You see Crest with Whitestrips, you see Gillette introducing the Venus razor for women.
"Everybody is trying to really introduce premium products because the financials are just superior," he said.
But while pre-sell may be new to the health, beauty and wellness category online or even the drug segment, it has been done before.
Amazon is a frequent user of that tactic, particularly for the Harry Potter line of children's books. Garden.com, a defunct Austin, TX, retailer of plants and gardening equipment, was another proponent. It accepted orders of plants three months in advance of shipment.
"It's a technique that companies use to control their inventory levels as well as use it as an avenue for increased revenue," said Anne Dooley, formerly at garden.com and now direct marketing manager at nFusion Inc., an Austin direct agency.
"Using online marketing," she added, "marketers will be able to gauge interest in the product, look at the burn rate for their inventory, and it'll probably also give them an opportunity to test messaging and techniques in order to sell this particular product."