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Product diversity counts in a recession–just ask niche retailer Cymax Stores, which operates 120 niche storefronts. Cymax posted Q4 web sales of $16 million while total 2008 revenue grew by 54% to $50 million.
Product diversity counts in a recession–just ask Cymax Stores Inc., a niche web retailer of housewares, furniture, home furnishings and electronics.
With a portfolio of about 120 niche storefronts and a wide range of merchandise, Cymax, No. 247 in the Internet Retailer Top 500 Guide, was able to grow its web sales by 60% to $16 million in the fourth quarter of 2008 from $10 million in Q4 of 2007. For the year, Cymax also posted a healthy gain in revenue with 2008 web sales of $50 million, an increase of 53.9% from 2007 e-commerce revenue of $32.5 million.
It was a tough fourth quarter and holiday shopping season for many online retailers that sold big-ticket items such as furniture. But Cymax operates a diverse retailing business. The company specializes in building individual sites, each with its own web address, for niches like sofas at EverySofa.com, game tables at FoosballSelect.com and dining chairs at MoreDiningChairs.com.
It was product diversity and doing a better job with marketing, particularly with highly segmented weekly e-mail blasts, that helped Cymax grow its Q4 numbers, says Cymax CEO Arash Fasihi. “We did a better job with marketing and paid attention to the basics,” says Fasihi. “Our product diversity definitely helped and we didn’t have all of our eggs in just one basket.”
Cymax uses information about the products customers search for as a basis for developing new niche sites, which included the launch of about 30 microsites in 2008.
In recent years, Cymax had planned to add up to 200 microsites, but current economic conditions are prompting the company to scale back and look only at a few targeted niches.
Late in 2008 Cymax launched a new baby products store with an inventory of 3,000 products. This year Cymax will expand its line of baby products and add as many as 17,000 items. “We found this niche the way we do most others: our customers began asking for it,” says Fasihi.