Boca Raton-based company has healthy outlook [The Palm Beach Post, Fla.]
(Palm Beach Post (FL) Via Acquire Media NewsEdge) Jan. 27--Vitacost.com transformed itself from a catalog vitamin company to a major Internet player in the health and wellness industry in the past couple of years, and held its own with the big boys in a recent customer satisfaction survey.
Vitacost (NASDAQ: VITC) ranked third behind Amazon.com and LLBean.com (and tied with QVC.com) on a ForeSee holiday shopping survey of Internet retailers. The company has been headquartered in South Florida for years, first in Boynton Beach, and since 2007 in Boca Raton where 130 are employed.
"We basically sell great products at great prices," Chief Marketing Officer David Zucker said. "That's a really easy thing to go to market."
He's worked hard to overhaul the company's website and honed the focus on customer service for an easier buying experience. And the company is rewarding customers with a discount for referring friends.
ForeSee, which broadened its survey in December to the top 100 e-retailers, said some large companies like Apple and Dell lost ground. Vitacost got 84 points on a 100-point scale in a survey that asked 24,000 people about their holiday e-commerce experiences. That's a big deal for a company that stopped sending catalogs less than two years ago and boosted sales 36 percent between 2009 and 2011 to $260.5 million. For the first three quarters of 2012, sales were up 27 percent over the same period in 2011, according to SEC documents.
However, the bottom line shows the company is spending much more on overhead costs (warehousing supplies, equipment, employees, rent) and sales and marketing, and has operated at a loss since 2010. Its market capitalization is $235.9 million.
CEO Jeffrey Horowitz took over in mid-2010, after accounting questions caused the ouster of founder Ira Kerker. Horowitz previously founded Vitamin Shoppe, so has extensive experience in the industry.
"You can't do really good customer-focused marketing unless it comes from the top," Zucker said.
Zucker, previously with Gilt Group, Dell and the Home Shopping Network, joined in August 2011. Despite no formal experience in the nutraceutical industry, Zucker is an iron man competitor and avid user of health and wellness products.
The game plan since then has been to broaden the company's image from a vitamin company to a health food company.
Vitacost added about 8,000 items for an array of 40,000 products, and most of the additions are in food and drugstore categories, because the company already offered almost everything available in vitamins, supplements and herbs. It adds 150 to 300 new items each week, but discards products that don't sell.
The company revamped its website after marketing research showed that the categories were confusing and the website didn't have a reputable vibe, Zucker said.
The colors changed, the layout changed. That improved the user experience, Zucker said. Now a customer looking for fish oil tablets can go to the vitamins, supplements and herbs category, which before were separate categories.
Customer service is the mantra for the executive team and call center too, Zucker said. In fact, the executive team gets an email each morning with details on every customer comment, good and bad.
Zucker keeps a special phone on his desk that allows him to listen to customer calls at any moment, so he hears the customer experience directly. His marketing team spends 30 minutes a week listening to customer calls.
In 2013, Zucker said the company will continue to develop its mobile accessibility and be more aggressive with mobile marketing. And the company plans to expand its global footprint beyond the 42 countries it currently serves.
2012 (as of 9/30) $245.7 million
2011 $260.5 million
2010 $220.7 million
2009 $191.8 million
Source: Securities and Exchange Commission documents
(c)2013 The Palm Beach Post (West Palm Beach, Fla.)
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