Buy.com Inc. is spending $3 million on a promotional giveaway timed with the video and DVD release of the latest James Bond movie, “The World Is Not Enough.” The DVD is available in stores now. Visitors who enter the sweepstakes, which runs through June 30, are eligible to win the grand prize — a $39,470 BMW X5 sports activity vehicle — or other prizes including $10,000, $5,000 or $1,500 worth of merchandise. The promo coincides with the opening of a special Bond section within the buy.com video store.
“It's bigger than just selling on video [and DVD],” said John Herr, buy.com's vice president of advertising and marketing. “The idea is to really get hold of our demographics, which tends to be a very tech-savvy, advanced Internet user.”
A major lure of the sweepstakes is the daily prizes, which include Bond DVDs and gadgets such as Nikon Limited Edition digital cameras, JVC digital camcorders and Sega Dreamcast systems.
The whole idea is to attract people to the site and convert them from browser to buyer.
“We think when someone becomes a member, it's a very small step before they become a buyer,” Herr said.
The new Bond store stocks the entire catalog of the 007 franchise, including videos, DVDs, books and music soundtracks.
As a special touch, actor Jason Connery, son of original 007 Sean Connery, will lend his voice to the radio spots that publicize the sweepstakes. Besides radio, the media plan includes print and online ads. This will be supported by e-mails to opted-in customers.
“The idea here,” Herr said, “is how do you pull all that together around a theme that would drive traffic to your site and sales to the checkout line?”
Based in Aliso Viejo, CA, the three-year-old buy.com offers more than 850,000 products and services in categories such as games, music, travel, clearance equipment, consumer electronics, books, videos, golf, computer hardware and software and DVDs.
Earlier this year the retailer dumped its low-price strategy that promised the lowest prices on the Internet.
Buy.com lost $130.2 million on revenue of $596.9 million last year. Courtesy of the new pricing strategy, it recorded higher first-quarter 2000 revenue of $207.6 million, up 92 percent from the same period last year. But net losses widened to $32.8 million, from $19.3 million in the same first quarter last year.
But the gross margins in first-quarter 2000 grew to 4.3 percent, up from -0.8 percent in the fourth quarter of last year. Operating margins for the same period improved to -15.3 percent, up from -24.5 percent in the last quarter of 1999.
A lot rides on the new Bond promotion, the first of many the company plans this year across its myriad product categories.
“This is really going to affect second quarter but I do think it'll help us garner a lot of new customers that will carry momentum in Q3 and then we'll do some additional things in Q3,” Herr said. “The major focus of looking forward is to really gear up for Q4.”
