Groupon says its focus is on the bottom line, rather than top-line growth.
You can’t blame the fading of Main Street merchants on the Internet. After all, the corner five-and-dime has been disappearing for years, thanks to discounters and changing demographics. But there are plenty of spunky survivors. And as online giants like Amazon.com compete with new product lines-its latest is kitchen appliances-small retailers are making their own online moves via community portals.
Primarily outlets for local news and weather, community portals are adding malls that help local merchants with both existing and new business. “We are retaining local customers because the site makes it easier for them to deal with us,” says Bud Matto, owner of Matto Cycle in Pottsville, Pa., a Harley Davidson dealer who has put his store in a community portal on the Web. “We’re also getting new customers from outside our business area. We have shipped items as far away as Australia.”
Along with bringing global sales into the picture, community portals allow local merchants to offer goods on their sites that they don’t have room to stock and display in their stores. And just as they do with other Internet stores, customers use local sites to research items they ultimately buy offline. Visitors to mattocycle.com can gather data on motorcycles and negotiate a price via e-mail before making an in-store purchase. “It’s a big time saver for customers in today’s hectic world,” says Matto, whose site also generates 30 to 40 sales of parts and accessories each month.
Technologically, community portals make it easy for local merchants to establish a Web presence because third-party companies that operate the portals also build the sites in their cyber malls. These companies include Koz.com of Raleigh, N.C., and Azcentral.com, Phoenix. Koz.com has built about 500 community portals, six of them featuring retail malls with local merchants.
“Associating with a pre-established site relieves merchants of a lot of infrastructure responsibilities,” says Kim Lenta, e-commerce analyst at Current Analysis, Sterling, Va.
Lenta and other observers say they’re unsure how many community portals exist. But setting up an electronic storefront is just one option for local merchants. They also can use community portals to launch ad campaigns to drive physical store traffic.
Azcentral.com sells space in its mall as advertising. Retailers can put links to their sites next to related content from the Arizona Republic, the daily newspaper in Phoenix. “We can set up ad programs to build brands or drive traffic,” says Mike Huber, new media sales director for Azcentral, which had a record 12 million page views in March. “We can relate an ad to content and provide broader exposure, since 200 newspaper sites around the country access our site.”