Google Algorithm Changes Create Ecommerce Opportunity

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The February 2011 Google penalty for large online retailers including JC Penney (NYSE: JCP) and Overstock (NASDAQ: OSTK) has created space for competitors including Stage Stores (NYSE: SSI) to capture market share through ecommerce and SEO.

Stage Store

We’re more enthusiastic than ever about reaching new and loyal customers across the country through ecommerce.

Large online retailers including JC Penney and Overstock were penalized by Google in February 2011. The JCPenney.com drop in rankings from page 1 of Google to pages 5 and 6 for many relevant keywords has opened up new opportunities for up-and-coming competitors in ecommerce such as Stage Stores.

JC Penney has approximately 1,100 department stores in the US and Puerto Rico. In contrast, Stage Stores has approximately 800 department stores in the US selling moderately priced, nationally recognized apparel, accessories, cosmetics, and footwear for the entire family. Stage Stores operates its stores under the name plates Bealls, Goody’s, Palais Royal, Peebles and Stage. Widely known in 39 states, the ecommerce channel extends their reach to the remaining 11 states and the District of Columbia.

Stage Stores launched their first ecommerce website in November 2010. Originally a pilot program, their online store shop.stagestores.com, has quickly become a new profit center for the company. With the possibility for aggressive Search Engine Optimization (SEO), affiliate marketing and other traffic sources, Stage Stores is positioned well to become an Internet Retailer Top 500 website in 2012. Such a possibility becomes more likely as retail giants like JC Penney have been bumped from the top of page 1 of Google, freeing space for Stage Stores and other companies selling related products.

“We’re more enthusiastic than ever about reaching new and loyal customers across the country through ecommerce,” said Steven Hunter, Chief Information Officer of Stage Stores. “Having an ecommerce presence is important for our future growth.”

Ecommerce solution provider ECommerce Partners developed the ecommerce website as a proof of concept that has grown into a successful profit center earlier than expected. The initial phase of development focused on website architecture optimized for speed and information technology to handle high traffic volume and efficient order processing. Next steps would logically include a redesign and increased effort on SEO.

“Stage Stores has made excellent decisions in their online strategy that include fully optimized information architecture,” said Gil Levy, Managing Partner of ECommerce Partners. “As this strategy reaches fruition through enhancements in User Interface design to optimize for conversion, SEO for significantly increased rankings on Google and segmented email marketing, we expect major growth in revenue, traffic and customer retention.”

About Stage Stores: Formed in 1988 through the merger of two family-owned retail companies, both of which were originally founded in the 1920’s, now continues its remarkable growth. Its stores operate under Bealls, Goody’s, Palais Royal, Peebles and Stage names, all of which honor the motto, “5 Great Names. 1 Great Concept.” Today, with close to 800 stores in 39 states, and employing some 13,500 people, Stage Stores is looking to open 35-40 new B&M stores in 2011 and to expand their ecommerce presence. These dynamic ambitions support the company’s mission: “To be America’s leading small town and neighborhood retailer.”

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Elana Birnbaum
ECommerce Partners
(212) 334-3390 x230
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