New E-Shop Brings the Store to Customers, Already Has 1,000 Retailers on Roster

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A Silicon Valley firm slated to open shop this week wants to install shopping areas on small sites across the Web. And the company kicks off with an advantage that would make most Internet start-ups drool: More than 1,000 cyber-retailers already have signed on to do business through the company.


Granted, most of the merchants linked up with Affinia Inc. are small players - one specializes in refrigerator magnets - but the Mountain View, CA, company has deals with Amazon.com, Barnesandnoble.com, eToys, PlanetRx and other large players. Affinia CEO Kris Hagerman wants to link those retailers' stores to the Web locales where their customers lurk.


"We don't force the consumer to go to a new store. We bring the store to them," Hagerman told DM News.


That mantra - "take the store to the traffic" - is one gaining momentum on the Internet, especially as businesses begin to hawk their wares through interactive banner advertisements that let Net surfers buy what they want without clicking through to a virtual store.


Affinia's approach is different. People who publish small Web destinations such as community sites or topic pages register at www.affinia.com. As part of that process, publishers type in three words of their choosing that describe their site's content. Affinia uses those words to suggest merchants and products for a virtual store the publishers can link to their sites. Those merchants are Affinia's clients.


The company might, for example, put the products of a guitar retailer and related merchants in a virtual storefront on a chat site for rock musicians - presumably the best customer prospects. Shoppers who want more information on an item are sent directly to virtual merchants' main retail sites. Affinia plans to charge merchants an average of between 5 cents and 20 cents for each shopper it delivers, and the company will pay half the referral fee to the content publisher.


Hagerman does not expect interactive rich media banners to slide into oblivion any time soon, but he is betting Affinia's strategy of delivering many retailers' products to many sites will persevere over banners that push one retailer at a time.


"We're really confident that the trend of the Web is toward decentralization, not centralization," he said, adding that many businesses like the idea of getting away from banners altogether.


Affinia signed its first merchant client in May. Executives pitched big players like Amazon face-to-face, and then used patent-pending software to sign up the smaller sites. Affinia designed crawler technology that scours the Web for virtual stores and automatically copies their product information to a database. The company then promotes their service to the cyber-stores electronically.


"We send an e-mail [to the store] that might say, 'Hey, wouldn't like more traffic to your accordion site?'" Hagerman said. He noted that Affinia does not plan to license its software to other companies.


A staff of Affinia "cybrarians" reviews the product descriptions gathered by the crawler and categorizes them. Retailers such as the refrigerator magnet site might have products with several different themes - NASCAR magnets and golfing magnets, for example - that Affinia recommends individually to appropriate content sites.


The cybrarians are part of Affinia's mission to help with marketing decisions that fall beyond the expertise of small Web merchants, said John McCrea, the company's vice president of business development and corporate marketing.


"These guys don't know how to merchandise," he said, to which CEO Hagerman quickly added, "And they don't really want to learn."


Online stores might be squeamish about paying for leads rather than conversions, and Affinia executives conceded that sites that can track the sources of their traffic usually want to pay by transaction. McCrea said only about 400 Web merchants track their traffic - usually sites with affiliate programs. Affinia will charge those clients by transactions but still will pay content sites on a referral basis.


To attract content sites, Affinia is in talks with companies like personal home page builders that perform services for Web sites. Affinia seeks co-branding agreements with such firms.


In June, Affinia inked a $12 million funding deal with four investment firms, among them the venture arm of database software company Oracle Corp.
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