One Online Retailer's Experience With Bitcoin
In January, we asked Is 2014 the Year of Bitcoin for Ecommerce?
Since then, we’ve seen the likes of NewEgg, Tiger Direct, Dell, Dish Network, Lord and Taylor and BloomNation jump on board with Bitcoin. Even PayPal is dropping big hints that it will support Bitcoin soon, which could help the cryptocurrency’s mainstream adoption.
The founders of BloomNation (think Etsy for flowers – a marketplace that connects consumers directly with local florists) reached out to Get Elastic to share the results of its foray into Bitcoin acceptance since its launch pre-Valentine’s Day.
Why did BloomNation decide to add Bitcoin as a payment method?
BloomNation Co-Founder, David Daneshgar says:
"As a startup, we believe in being innovators in our industry. The online floral industry has been somewhat inefficient, especially with companies like 1-800-Flowers and FTD being enormous clearinghouses in-between the flower buyer and the florist. Their model has not really evolved and we feel like we can be faster to adopt innovative solutions. Bitcoin is a great example of that and we wanted to reach a new demographic of flower buyers that globally may never have known of some of our local florists otherwise. Those who use Bitcoin tend to be much more tech savvy and really love marketplace businesses that are disrupting antiquated incumbents."
What, if any, challenges did you face with Bitcoin integration?
"There were no major challenges in the integration since we worked with Coinbase to accept payments. The user is prompted to pay with Bitcoin (in a manner very similar to how they would use PayPal) or credit card upon checkout. Coinbase also converts the money instantaneously to the dollar to help us with mitigating the risks associated with Bitcoin volatility."
How will you determine whether to continue with Bitcoin as a payment method or abandon it?
"We look at certain metrics to evaluate how effective Bitcoin is for BloomNation and all have so far passed with flying colors- Bitcoin has increased sales, increased average order size, lowered our average processing fee and attracted a new buyer segment to our marketplace."
Has BloomNation tested its presentation of the option in checkout?
"Yes, we have tested it, and it has done really well for us. One surprising finding is that the average Bitcoin user spent 50% more per order than the average credit card user."
Are you doing anything to target new Bitcoin customers?
Co-Founder and COO, Gregg Weisstein says:
"Our Bitcoin marketing efforts rely on passionate Bitcoin users spreading the word through forums, articles and social media that it is now possible to send flowers from over 2,500 local florists with Bitcoin."
Is Bitcoin right for your ecommerce site?
Despite the successes reported by the handful that accept Bitcoin, less than 1% of consumers use Bitcoin (Forrester Research).
But if you’re an early adopter, tapping into that 1% can pay off, especially if you cater to the Bitcoin segment. Bitcoin users tend to be:
“Those who use Bitcoin tend to be much more tech savvy and really love marketplace businesses that are disrupting antiquated incumbents,” as quoted above.
TigerDirect recognized it could tap into an existing customer segment that was already using the site to buy components used to mine Bitcoin. “With individuals building their own high-powered PCs with parts offered on our site to mine Bitcoins, it’s a logical fit" says Steven Leeds, Director of Corporate Marketing at TigerDirect.
95% of Bitcoin owners are male.
BloomNation CEO Farbod Shoraka says "men purchase during Valentine's Day, and Bitcoin is heavily used by men."
White, affluent, libertarian
Bitcoin enthusiasts are also predominantly white, affluent and libertarian. If this sounds like your typical customer, accepting Bitcoin may pay off for you.
What are Bitcoiners actually burning their BTC on? The top category is gifts and donations. BloomNation and other gift sites (that are typically bought by men) are a great fit, as are non-profits.
For more information on how Bitcoin works and whether it's right for your online store, check out: