Reflect.com Customer Service Differentiates Site From "Malls Online" - Exec

Reflect.com's customer-oriented experience will allow the Web site to survive in the ever-changing online beauty market, Chief Design & Marketing Officer Richard Gerstein said at an IQPC-sponsored Beauty Online meeting in San Francisco April 26-27.

An "unprecedented experience and level of delight" is the central way to drive loyalty, and successful customer service is the key to building a loyal consumer base, he said.

"The true test of loyalty is not if someone comes back and buys, it is someone who is an evangelist talking about your brand, telling friends," Gerstein said. Loyalty built by instilling delight in customers' experiences "will differentiate survivors in e-commerce," he predicted.

A newly-developed "tell-a-friend" program has shown that 94% of reflect customers tell at least one friend about the site and 11% tell 10 or more.

Reflect.com has instituted a number of policies to ensure customers, Gerstein explained. The site, for example, does not charge for shipping. One of the "top five reasons people don't buy is shipping cost" because it makes "people feel nickel and dimed," he maintained. To make up the difference, the firm incorporates the shipping cost into the price of the product.

To keep an element of surprise in Web shopping, a consumer that customizes a reflect product on the site but does not complete the purchase process will receive a sample of her abandoned product.

Reflect.com was fully launched in March through a joint venture with Procter & Gamble and RedPoint Ventures (¹ (Also see "Reflect.com Web Site Adjusts To User's Personality; March Launch Set" - HBW Insight, 22 Nov, 1999.)). Products sold on the site are completely customized by the user, down to the fragrance and packaging.

"We think of ourselves as a branded service because in the end of the process, the woman is the brand," Gerstein told the Beauty Online audience. Reflect takes a minimal role in the development of the product, he said, maintaining that the customer "is the future of the product because the lineup is just for her."

The reflect.com exec outlined other measures the Web company uses to attract and retain customers. Direct mail "is one of our most successful pieces for marketing the brand," he maintained.

Sending "special" mailings to consumers sets it sets apart, Gerstein said. For example, consumers receive an orchid following every purchase, Starbucks certificates if a mistake is made and Godiva chocolates if a mistake is "really bad." Beautifully wrapped gift certificates will be available starting the week of May 8.

This kind of follow-up completes the cycle of "delight" at all levels of the shopping experience, Gerstein said. "If you delight them with a product, they will tell 10 friends. After they get the orchid, they tell 100."

Responding to a question about the high cost of sending customers such luxuries, Gerstein maintained that since the cost of acquiring a customer is so high, the cost of retaining her is comparatively small. "When you are talking about acquisition costs of $50 [to] $200 per user, it is peanuts in the end to cement that relationship."

Besides being the only customized beauty Web site on the market, reflect.com differentiates itself from other sites by supplying little editorial content and no advertising on the site.

The company also notes it provides consumers with different services and product benefits from retail stores, while the "malls online" sites focus only on providing an alternative distribution channel.

While reflect.com plans to remain in the market as a customized beauty site, many e-tailers either have been consolidated into better-endowed companies or are expanding their sites into multi-product destinations.

For example, one beauty Web site, eve.com, will enter the jewelry market in a month and a half, Co-Founder and Co-President Mariam Naficy announced. Eve.com will further expand to leather goods and accessories, scarves and ties in the future. "We think of it as the Barneys New York first floor," she said.

The expansion follows eve.com's sale of a controlling stake in its business to Internet business firm idealab! on April 18. As part of the agreement, idealab! Chairman Bill Gross becomes chairman of eve.com, while Naficy oversees marketing and business development activities.

Eve co-founder Varsha Rao will head merchandising and new category development efforts. Idealab! also hired three former Barneys New York execs to operate its conglomerate of Internet businesses, including eve.com. Idealab!, which is said to be worth $10 bil., plans to go public depending on when the market is ready.