The Affiliated Future

Affiliate marketing, first popularized by Amazon.com Inc. some years back, continues to grow at a breakneck pace.

Total revenues from these “cost-for-performance” programs are now topping $6 billion annually and growing at a 40 percent rate, according to Forrester Research Inc., a technology research company based in Cambridge, Mass.

In fact, affiliate programs are expected to drive half of online retail sales by 2005, industry experts said in a recent report by Forrester’s TechStrategy.

Now that Amazon.com has developed apparel as a major merchandise category, retailers and manufacturers participating in the program—including Target Corp., Nordstrom, Levi Strauss & Co., Gap Inc., OshKosh B’Gosh, Guess? Inc. and many others—are enjoying added revenues from sales originated from the site’s fashion portal.

According to the E-Commerce Times, Amazon.com’s apparel-and-accessories category became “the fastest-growing store in terms of units sold in the first 60 days after it opened.”

If you are new to the concept of affiliate marketing, here is how it works:

Say you are on a Web site, and you see a banner or text link for a book related to the topic of that Web site. You click on the banner or link and jump to Amazon.com, where ordering that book—and, of course, other related merchandise— is encouraged. If you actually purchase that book or anything else from Amazon.com, the original Web site is credited for that sale. Amazon.com receives 7 percent of the sales total. Other affiliate programs take from 5 to 20 percent of sales totals.

The HTML coding that tracks and monitors these sales is so sophisticated it can identify you when you visit Amazon.com in the future. If you return in a few days or weeks (with Amazon.com and most others, the time limit is 30 days) to place an order, the Web site that brought you to Amazon.com is still credited for the sale, even if you did not go through that site on your second visit.

Amazon.com, of course, is big enough to run its own affiliate program using its own proprietary software. But most merchants are not. That is why the real growth and innovation in affiliate marketing of late has occurred through specialized intermediaries that offer affiliate programs to anybody with a Web site.

The biggest players are New York–based LinkShare Corp., www.linkshare.com, and Santa Barbara, Calif.–based Commission Junction Inc., www.cj.com. LinkShare offers affiliations to Delia*s Corp., Lands’ End Inc., Nordstrom, Paul Fredrick and International Male, among others. Commission Junction’s affiliations include Danskin, Patagonia Inc., Blair, Jockey International Inc., Big Dog Sportswear and Elisabeth by Liz Claiborne.

As you might expect, merchants invest a considerable amount of money—usually several thousand dollars—to join one of these systems. They must provide a selection of banners and text links to affiliate members, who get to choose the merchants they want to feature on their Web sites. Merchants have the right to refuse to be on any site.

The efficacy of the system is that affiliate members gain new revenue streams for their Web sites. The revenue can be significant if members carefully choose banners and links to enhance their sites’ visitor experience and appeal to their desired demographics.

Merchants also get new revenue streams and efficient ways to sell their goods and dispose of remainders, overruns or other nonselling items. Also, if merchants choose affiliate sites well, they can convert a percentage of new customers gained from those sites into direct customers.

The rapid emergence of affiliate programs such as LinkShare, and the equally rapid advancement of technological and security improvements in the World Wide Web present marketing tools that big and small manufacturers and retailers cannot ignore.

Site Review: SizeAppeal

It may take awhile for the Flash animations of SizeAppeal, www.sizeappeal.com, to load on your computer if you do not have a broadband connection. But if you are shopping for women’s plus-size clothing, it’s worth the wait.

With “Curvy women rule!” as its motto, the Santa Monica, Calif.–based site started by Caron Kovoloff spells it out: “For 62 percent of American women, and 75 percent of women in Europe, finding that perfectly fitting, fashion-forward, nicely priced little item warrants nothing short of guerilla tactics. Why? Because they are size 14 and up. SizeAppeal offers the world’s curvy women something they’ve never had before: shopping nirvana.”

SizeAppeal’s founders may just be right. The groovy site has just the right amount of animation and is nicely color-coordinated and very navigable.

Cleverly structured into five convenient categories—sex appeal (sexy clothing), chic appeal (classic eveningwear), bare appeal (lingerie: “coming soon”), extra appeal (accessories) and steal appeal (bargain merchandise)— this great collection of moderately priced garments for larger-sized women is well-presented.