YOUR CUSTOMERS ARE SHOPPING ONLINE. The U.S. Commerce Department reports that online sales rose 3 percent in the second quarter of 2011 and accounted for 4.6 percent of total U.S. sales; offline sales rose just 1.1 percent. Affluent consumers account for the largest chunk of eCommerce growth, and they expect good deals, quality assurance and flawless customer service.
Clementine Illanes, a retail strategist and expert on multichannel commerce at global management consulting firm Kurt Salmon in New York City, advocates eCommerce for retailers but urges a “crawl/walk/run” approach. Plan carefully, she says: “Ultimately, the goal is building brand loyalty and repeat sales. One way small retailers go wrong is by creating high expectations for service and not delivering on that promise. It’s critical to have all operational pieces strategized up front.”
Here’s how four local retailers are doing it right.
SARASOTA FINE WINE & TASTINGS
Open only since July, Sarasota Fine Wine & Tastings (sarasotafinewine.com) at 4333 S. Tamiami Trail is an extension of owner Steve Koch’s passion and experience as the director of food and beverage operations for a French restaurant in Washington, D.C. Having a robust eCommerce site was never in doubt. “We knew we had to make it easy for customers to find what they were looking for when they visited,” Koch says. “I spent a lot of time on the search engine as well as the checkout process to ensure the experience was simple, easy and secure.”
Online sales are exceeding his expectations. “The website will account for almost 70 percent of all sales by the end of our second year,” he estimates.
High-end wine collectors often use the Internet to search for rare bottles and vintages. On Koch’s website, their average purchase is more than $100 a bottle. Walk-in sales, by contrast, are in the $10 to $20 per item range. The website is used to harvest email addresses for weekly enewsletters and targeted eblasts with exclusive offers. Koch also uses Facebook, Twitter, blogs, special events and value-added features such as timely news articles, suggested wine pairings and recipes with keywords that enhance his website’s SEO.
There are caveats. “It’s very easy to get off track when building a site,” Koch warns. “Visit other sites and take the best ideas from each of them. If you lose your focus, you can spend a lot of time and money for something with no depth or personality. We make sure everything on our site is inviting and the inventory is accurate. All questions and concerns are addressed in a timely manner, and sales are shipped exactly as requested.”
UPFRONT COST: $300-$500 (included web template, support, dedicated server); monthly cost for shopping cart and website is approximately $50.
STAFFING FOR ONLINE BUSINESS: one (Steven Koch). “It’s a daily undertaking to keep the inventory accurate,” says Koch.
ONLINE SALES AS A PERCENTAGE OF TOTAL SALES: Expected to be 70 percent in 2013
Trent Young and his brother, Troy, opened their men’s resort wear shop, Captains Landing (captainslanding.com) in Punta Gorda in 1995. The Venice location at 243 W. Venice Ave. debuted in 2005. The brothers launched online sales in 2008 and within two years had to invest in significant updates.
Success comes from strong brand identity and customer knowledge. “We do our best to reproduce our culture by building a site that reflects the warm and inviting feeling customers get when in our stores,” Trent Young says. “We know we have to be engaging and offer customer service that’s above and beyond anything they’ve come across, just as if they were right here in front of us.”
And their experience in running an established store has been critical, he adds. “We know our products, and that knowledge comes across to the customer through the Internet experience.”
The Youngs keep up with new technology, online trends and the constantly changing indexing and search algorithms of Google, Bing and Yahoo. Captains Landing employs an in-house team to produce fresh product images and graphics but outsources the coding, design and architecture of the website. “Any business today can’t remain 2D,” Trent Young says. “Internet sales make us 3D and put us in front of a whole new audience.”
One third of the stores’ Internet sales come from California. Some are niche customers who may have visited and liked the store; others are people searching out the particular style of shirts, shorts, slacks, swimwear, gifts and accessories that Captains Landing features. ECommerce gives Young’s seasonal buyers a chance to shop throughout the year. “It has definitely kept our heads well above the water during the recession,” Young says. “A lot of management, logistics and time go into it. It’s not just clicking a button and watching money go straight into the bank.”
UPFRONT COST: $45,000
STAFFING FOR ONLINE BUSINESS: One full-time and two part-time in-house staff
ONLINE SALES AS A PERCENTAGE OF TOTAL SALES: 33 percent in 2010
KEETON’S OFFICE & ART SUPPLY
Cole Hoopingarner, marketing coordinator of the family-run Keeton’s Office & Art Supply (keetonsonline.com), at 817 Manatee Ave. W. in Bradenton since 1951, works with his systems administrator, Ed Copeland, to keep their 11-year-old eCommerce site a profitable adjunct to the store. The main website markets in-store-only merchandise, such as art supplies and office furniture. But regular clients can log onto their personal accounts to order a huge variety of merchandise with free shipping, no minimum orders and easy access to their buying history. For the store’s recent 60th anniversary, the website featured 60 days of product giveaways donated by some of Keeton’s vendors.
Supply chain management is crucial to successful eCommerce. Keeton’s merchandise is delivered to the company and then distributed in the company’s own trucks to customers, 98 percent of whom are local. That thoughtful, face-to-face interaction keeps customers coming back. Hoopingarner says 52 percent of the store’s commercial business is now transacted online.
Social media and emails reinforce the brand promise of ease of shopping and personal service. Mistakes happen, but the store fixes them quickly and keeps communicating with disgruntled customers. “Our world is moving so fast now that if someone has a bad online experience you are lucky to get a second chance,” warns Hoopingarner. “The Internet has shown customers that they can go to a lot of other places. So listen and make appropriate changes. Make your site and customer experience as topnotch as they can be.”
UPFRONT COST: Several thousand. Keeton received a discounted rate since the company was the first office supply dealer to use another company’s web services.
STAFFING FOR ONLINE BUSINESS: One (Ed Copeland)
ONLINE SALES AS A PERCENTAGE OF TOTAL SALES: 52 percent
JUNO AND JOVE
Olivia Bono of Sarasota’s Juno and Jove (junoandjove.com) runs a socially conscious high-end fashion business, selling trendy apparel, shoes, accessories and home products for men, women and their pets. Her products are eco-friendly—which, in Bono’s world, means organic, free trade, recycled, repurposed, locally sourced when possible, and even vegan.
Her store, at 1425 First St., is beautiful, but a well-designed web presence was always part of her business plan. “We definitely considered Sarasota a jumping off point for a web store,” Bono says of her five-year-old company. “With this being such a resort community, we knew we’d have the opportunity to talk to people from all over the world from our home base. They’d be introduced to our store and then we’d maintain a relationship with them later.”
With a blog, Facebook sweepstakes, exclusive online offers and free shipping on orders over $250, Juno and Jove targets affluent shoppers who are environmentally conscious. Bono uses LightSpeed, a Canadian company’s Mac-based software, to co-manage inventory, streamline shipping and simplify fulfillment. She’s been invited to be one of the trendsetting curators on the “digital discovery destination” AHAlife.com, a site which features one very select item recommended by a chosen “curator” every 24 hours in fashion, food, beauty, accessories, home decor, travel and tech. She's also looking at the possibility of teaming up with über couponer Living Social and ideeli (a deep discount, upscale shopping community) this season. These collaborations yield exposure to a vast new customer base that may never actually visit Juno and Jove in Sarasota.
ONLINE SALES AS A PERCENTAGE OF TOTAL SALES: 18 percent ( expected to be between 22-25 percent by summer 2012)
BIGGEST ONLINE ORDER: $2,200 to a customer in Sweden. “She bought a variety of my favorite designers,” says Bono. “It was as if she had sauntered through our brick-and-mortar and styled everything in person!”
BIGGEST CHALLENGE: “Without a background in programming and computer languages, managing the dynamic nature of eCommerce can be overwhelming,” says Bono.
Before You Launch Online
Choose your online strategy.
Do you want to create buzz, drive people to your store, or sell merchandise online?
Decide on the merchandise mix.
Will the website offer the same inventory as found in-store, online exclusives, or a combination of the two? Will prices be promotional or at par with competitors?
How will the business infrastructure meet customer expectations and fulfill orders? Will the merchant elect to inventory and ship product or utilize a third-party shipper?
Check in with customers.
Retailers must continually query their clientele: Do you care about apps, mobile sites, QR codes and coupons? Do you want to be engaged on Facebook, Twitter, YouTube, Google + and whatever comes next?
Is it worth the investment?
What are the metrics for measuring ROI and success? How will you know if it is time to pull the plug?
For more eCommerce tips, go to register.com/learningcenter/news.