A new forecast from Forrester Research credits greater online spending by Canadians, lower shipping costs and more selection for the spending increase.
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Relationship marketing is key for many extreme niche retailers because selling such specific and obscure products requires connecting more closely with customers than mass marketing allows. Some send personal e-mails, some send marketing e-mails and some-like GarlandGirl-even travel to events to meet potential customers. In the end, it’s the grassroots effort that distinguishes these niche players from their larger and more mainstream counterparts, Duncan says.
When it launched its site, Music For Little People took advantage of its customer relationships by offering a 10% discount to catalog customers who bought online. Since then, the company has been building up its relationship marketing muscle. Music For Little People sends e-mails to half of its 10,000 customers at least once a month and gets response rates of 2% to 3%. And the site, which incorporates Flash technology as well as streaming audio, gives customers a pop-up window that allows them to sign up for online newsletters. Sherman says the site gets 10 to 50 orders per day and existing customers visit the site four times per month. She says 25% to 35% of customers are repeat buyers.
GarlandGirl takes the customer relationship marketing to the extreme, which it can do, filling such a narrow niche. While the site undergoes a two-month make-over, staff is busy traveling throughout the U.S. and Canada to heritage festivals, state fairs and other celebrations from Western chili cook-offs to Scottish highland games. “We learn so much about what customers want from talking to them at festivals,” says Bashoor, who has added product lines based on such conversations. This type of hands-on research is helping GarlandGirl find new occasions for which to create products, including Italian, Norwegian and even Mardi Gras celebrations.
Finding Ms. Right
Mar-Beck has a little more difficult time creating customer relationship marketing since its products are not the kinds of things that people build relationships over. And so it does a different kind of relationship marketing: It develops relationships with manufacturers and retailers of the products for which Mar-Beck sells replacement parts.
When customers ask retailers where they can find a new mixer bowl, say, the retailers can refer them to the Mar-Beck web site. The company also works hard to get manufacturers to put links to the Mar-Beck site on their home pages. Regalware, Eureka Vacuums, Bemis Humidifier and Norelco Shavers so far have included the Mar-Beck button on their sites. “Consumers contact the manufacturer to ask where they can find unusual parts. We are having some success with that,” Wheeler says. Mar-Beck also has links on major appliance parts sellers’ pages, such as Marcone, from which they can refer questions about smaller appliance parts to Mar-Beck.
Mar-Beck does capitalize on customer relationships in one way, though: It runs an auction site for closeout merchandise, which accounts for 60% of Mar-Beck’s online business. It cross-sells parts to auction buyers. Between the auction and the parts sites, the company is on track to do $1.2 million via the web this year, Wheeler says. Furthermore, Mar-Beck plans to combine its repair service with its online sales effort, by adding a button on the site that can give customers repair quotes.
Once established, niche retailers online face the same reality that big retailers face: keeping the customer happy is a big part of keeping them as customers. Excellent customer service may be among the reasons customers seek out the smaller players. But once they have a customer, these extreme niche retailers are grateful and look for ways to ensure the customer experience on the web site is positive, from a design standpoint as well as function.
At the same time, though, these extreme niche retailers must keep a close eye on costs. “We put a lot of sweat equity into building our online store with less than a $10,000 expenditure,” says Music For Little People’s Sherman. “The challenge was to make the site look individual and not like any other stores online.”
Sherman created an advisory group of employees, including herself, the web designer and the publicity director to develop the web site. The group researched other popular web sites to determine which features, content and storefront they should use. They also researched placement on search engines. She saved money by hiring a part-time web designer who was also the town’s dental hygienist. Music For Little People integrated its catalog online and has relied on customer feedback for improvements. Sherman says she reads every single one of the 10 to 20 e-mails the company receives each week.
Down to the basics
In Mar-Beck’s case, catering to its demographic was an important consideration when building its web site. Luckily, keeping costs down fell into step with those plans. Like Music For Little People, the company spent $10,000 to build its site and also went with a local designer to do the job. “The obvious concern with our site is the fact that we have 1,000 SKUs to deal with and they are fairly low value. So we couldn’t have an expensive site,” Wheeler says. “In our four stores we have knowledgeable salespeople to help customers find what they need. The web site had to find a way to let customers shop for themselves. And we wanted it to look more like the pages of a parts catalog because our average customer is about 55 and we felt they would be annoyed with sites that substituted look for function.” Mar-Beck’s web site is stripped down with no fancy visuals. But customers can find what they need by searching the site’s list of manufacturers and parts.
Small retailers, however, can learn from the big guys. VacuumBags was motivated to have good service by early online retailers. “Our main thrust has been to get fast service,” says McClellan. “What got me started on being service oriented is that I ordered products from Egghead.com and they got it to me within a day or two. I said, ‘This is what I have to do.’”