Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
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PetsUnited, which specializes in building enthusiast-oriented stores and online communities based on strong domain names (Dog.com, Horse.com, et al.), has about half a dozen thriving ventures and hopes to build its niches up to the same numbers as CSN Stores, says Greg Patterson, senior vice president of marketing. “Our sites would be bigger and more complex, but it would be a model similar to CSN,” he says. “Once your infrastructure is in place, it’s just plugging in new pieces. It’s a good strong model, like owning a diversified stock portfolio. In a downturn, some divisions will feel the impact more than others.”
A stable of strong domain names seems as if it would be essential to the success of CSN Stores’ strategy and indeed, Conine says they’re always on the lookout for deals on good names. Of the 200-odd that CSN Stores has up currently, only about 20 fall into the strongest category, Shah estimates. They include AirHockeyTables.com, Bakeware.com, ReplacementChina.com, Upholstery.com, and Waterbeds.com. The others are compromises of various kinds: AllAirBeds.com, CSNArmoires.com, EveryToaster.com, JustKidsRugs.com.
Topping the charts?
But some of these compromise names are strong enough to pop up early in Google and Yahoo searches, while some of the so-called stronger ones don’t even make the first page of results, which just shows that making search engines happy is more art than science.
Werlin of Downtown E-commerce admires CSN Stores’ knack for search engine optimization. “The CSN Stores link takes you to a directory of all their sites, and then Google can find all the other stores,” he says. “It definitely tips the playing field in their favor.”
Nonetheless, paid search far outstrips natural search as a source of customers, says Shah, and most of the company’s marketing is a standard mix of paid search, comparison shopping sites, and e-mail. CSN Stores has yet to retire any of its domain names, but it will rachet down advertising expenditures for those that don’t perform.
Conine says the next step is to strengthen the brand recognition of CSN Stores itself. “We’re starting to market more as CSN Stores through e-mail outreach programs and some advertising,” he says. “If people had a good experience at one store, it benefits us if they know the others are similar.”
And the real key to success is customer service and product selection. “A generic domain name will help you for sure, but you need a great site to go with it,” Shah says.
To that end, he and Conine have put a great deal of time and energy into developing and managing vendor relationships so that their customers can expect dependable drop shipping. “We’ve learned how to get better at managing that process over the past six years,” Shah says. “It’s much more difficult than shipping out of our own stock. But if you do a good job, you have a much bigger selection available to the consumer. Wal-Mart and Costco are doing the same thing. They’re not trying to have the selection we have, but they want something broader than they have in the stores.”
Own best customers
CSN Stores has outsourced its entire supply chain, except for a small warehouse that accepts returns and either resells them at substantial markdowns or donates them to charity. But one thing it will never outsource is customer service, Shah says. The company hired its first employee in 2003 and is now at about 500, virtually all in its offices in Boston’s Prudential Tower. While some work on marketing, vendor relations and technology, the bulk answer customer calls and e-mails.
Both Shah and Conine are at the stage of life where furnishing their houses is a preoccupation and as a result, they are two of their own best customers. Shah is a fan of AllModern.com, their site for modern furniture, and EveryFaucet.com, which supplied much more than faucets to help him redo his bathroom.
Conine recently bought a mattress. “I had the darnedest time convincing myself to do it,” he says. “It was a good way to understand our customers’ point of view. But I thought, ‘I run this business-I really have to do it.’ In the worst case, I would just return it and try a different one.”
The mattress worked out fine, even though he hadn’t been able to lie on it before buying. “I’ve been to a lot of mattress shows, and I think lying on them is overrated,” he says.
Elizabeth Gardner is a Riverside, Ill.-based freelance business writer.