Businessmodel of Art.com

Customer Segments

Art.com has a segmented market business model, with customer groups that have slightly different needs. The company targets its offerings at individuals and businesses (primarily offices, hotels/spas, restaurants/cafes/bars, medical/dental facilities, and designers/architects).

Value Proposition

Art.com offers five primary value propositions: accessibility, convenience, customization, cost reduction, and brand/status.

The company creates accessibility by providing a wide variety of options. It sells art prints, wall murals/decals/signs/tapestries/mirrors, framing services, and movie, sports, and music posters.  It has acquired a number of firms since its founding, including Zenfolio and ArtSelect. This strategy has enabled it to diversify its portfolio. Through Zenfolio it offers a solution for photographers to display and sell their work online.

The company offers convenience by making life simpler for customers. It enables visitors to create an account on its website through which they can track their orders. It also provides a set of interactive visualization tools that allows them to see how art will appear in different settings and a suite of mobile apps that allow them to browse curated collections on the go. After customers make a purchase, Art.com lets them to return it within 30 days if they are not satisfied. They receive either a full refund or a free replacement.

The company enables customization through personalization capabilities. It allows customers to search for art on its site using filters such as artist, subject, and product type.

The company reduces costs in a variety of ways. It features a “Clearance” section on its website that provides daily discounts and offers exclusive offers and deals through an e-mail newsletter. It also offers businesses special pricing packages.

The company has established a powerful brand due to its success. It bills itself as the world’s largest online specialty retailer of high-quality wall art and complementary décor, with over three million unique images. It serves over 19 million customers (including over 500,000 business customers) in 150 countries, and operates 25 localized sites across the U.S., Canada, Europe, Japan, Australia, Mexico, and South America. Lastly, it has won a number of honors, including the following:

• Two Gold Advertising Ogilvy Awards from the Advertising Research Foundation
• Recognition as a Hot 100 Best Retail Web Site by com
• Recognition of its Zenfolio brand as Best Photo Service at the 2015 TIPA Awards
• Recognition of its Zenfolio brand as Best Professional Customer Service, Best Professional Product, and Best Professional Website Provider at the Societies Trade Awards
• Recognition of its Zenfolio brand as Best Website Provider at the Advanced Photographer Awards ### Channels

Art.com’s main channel is its website, through which it acquires most customers. It also sells products through its seasonal online catalog and uses its direct sales team to sell items to businesses. The company promotes its offerings through its website, social media pages, and advertising.

Customer Relationships

Art.com’s customer relationship is primarily of a self-service, automated nature. Customers utilize its website while having limited interaction with employees. The site offers a number of useful resources, including a blog that provides home décor tips, access to an e-mail newsletter, and answers to frequently asked questions.

Despite this orientation, there is a personal assistance component in the form of phone, e-mail, and live online chat support. The company also operates the Art.com Business & Trade Program through which it provides business customers with a free art consultation.

Key Activities

Art.com’s business model entails maintaining and updating its platform for customers. The platform includes its website and suite of mobile apps.

Key Partners

Art.com’s key partners are the suppliers that provide it with the products and services it needs to run its operations. It also maintains an affiliate program through which it invites third parties to promote its offerings on their platforms (websites, mobile apps, etc.) in exchange for a commission.

Key Resources

Art.com’s main resource is its online platform, which serves 19 million customers.

It depends on human resources in the form of the technology employees that maintain its platform, the sales employees that promote it, the experts that provide art consultations, and the customer service workers that provide support. It has an important physical resource in the form of its distribution center in Lockbourne, OH that occupies 175,000 square feet.

Lastly, as a startup it has relied heavily on funding from outside parties, raising $56.2 million from five investors as of January 2013.

Cost Structure

Art.com has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely transaction expenses, a fixed cost. Other major drivers are in the areas of customer support/operations and sales/marketing, both fixed costs.

Revenue Streams

Art.com has one revenue stream: revenues it generates from commissions it earns on sales of art products to customers on its websites.