Tuesday, April 03, 2007

Here's an idea: referrals

SXSW had more than just good techie panels and fun parties -- I was surprised to stumble across a thought provoking idea for online clothing retailers in one of the panels. Amelia G, of blueblood.net, asked the question "why don't clothing retailers refer people to each other's sites?" Amelia is in the adult content business, and there, if a customer does not buy from you they are referred to a competitor. "A competitor? Why?" I hear you say. Because the competitor will pay you a referral fee of around $15, and it's better to make $15 off of someone than nothing.

What does this have to do with Dressr? Part of what I think about is how Dressr, the web, and various technologies will change the retail clothing business. And this was a great insight into something that it makes sense to do -- but retailers are stuck in "business as usual" trains of thought and aren't there yet. (I'll point out they've been doing this offline for years. The next time you're in a mall, notice how 2 or 3 stores of a similar type will cluster together to draw customers from each other.)

Sharing customers works in the real world. No one buys all of their clothes from just one store. It could work in the online world, too. If the incentive was high enough, retailers would send people to the "right" place. As Amelia said "if I buy an interesting T-shirt from one place, why wouldn't I be interested in buying a different T-shirt from another site?"

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