July 9, 2008, 12:00 AM

Cymax Stores web sales up despite the housing downturn

Store-based merchants are seeing less foot traffic and sales because of a weak housing market, but by prudently finding new niches Cymax expects to grow web sales by 38% in 2008.

The sub-prime mortgage meltdown and slowing general housing marketing certainly aren’t taking a toll on niche retailer Cymax Stores Inc.

In fact, while store-based merchants in the home furnishings and housewares space are seeing less foot traffic and slower sales because of a weaker economy, Cymax, No. 247 in the Internet Retailer Top 500 Guide, is expanding. A year ago Cymax had 30 or so niche sites, a number that has since grown to about 112.

By December, Cymax could be operating as many as 200 stores. Sales in 2008 also are forecast to rise by about 38% to $45 million from $32.5 million. In the last month, Cymax has launched seven new niche sites aimed at buyers of patio furniture and by September will launch 15 more stores targeting consumer electronics and appliance shoppers.

Niche retailers count on drop-shipping arrangements, a common e-commerce platform and basic storefronts to quickly launch more e-commerce and microsites. The drawback to that approach is that customers often have to settle for a basic and straightforward shopping experience.

But Cymax, which carries an online inventory of about 5,000 products and has relationships with about 1,000 manufacturers, is taking measures to introduce more value-added features to its e-commerce platform and storefronts. “Once you have the infrastructure in place you can make even complicated changes easier to implement,” says Cymax CEO Arash Fasihi.

Cymax recently updated its site search application from Mercado Software to include more attribute-based search functionality and added customer reviews technology from PowerReviews Inc. So far Cymax has posted about 5,000 customer-generated reviews. The niche retailer is also in the process of manually reviewing all of its product images and upgrading each image to at least 1,000 by 1,000 pixels.

“We are increasing the total size of our image file to at least 50 gigabytes,” Fasihi says. “You can’t cut back on the customer experience. Whether it’s one web site or 112, customers expect to find plenty of product information, crisp images and to locate merchandise quickly.”

Cymax, which is based in Vancouver, British Colombia, sells most of its merchandise in the U.S. But a recently launched Canadian version of its e-commerce sites also is generating more sales. Since the Canadian web sites went live in spring, Cymax has increased sales from Canadian shoppers from about $50,000 per month to between $300,000 and $400,000, Fasihi says.

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