Groupon says its focus is on the bottom line, rather than top-line growth.
More regional retail chains are selling online, often with the personal touch that’s kept many of them in business for generations.
In every city there are stores all the locals know, that for decades have been selling shoes or clothes, cameras or jewelry. Often passed on from one generation to the next, these stores are run by business owners who know their market and their product category.
Increasingly, they’re coming to know the Internet.
Small bricks-and-mortar businesses typically have been slow to embrace the web-only 44% of them even have a web site, according to a recent survey by online marketing firm WebVisible Inc. and research firm Nielsen Online. But each year more regional retailers begin selling online.
They do it because they see changes in consumer behavior. That’s what prompted Jeff Corey, president of New England jewelry store chain Day’s Jewelers, to step up his investment in e-commerce two years ago.
Tradition not working
“Our traditional advertising was not working as effectively as it had in the past,” Corey says. “And we were finding a lot more of our customers were shopping online before coming into a jewelry store.” Corey was aware of industry data showing 22% of consumers had researched online before shopping in a jewelry store in 2006, and expected that percentage would rise; in fact by 2008, it was up to 50%, he says.
Relatively recent converts like Day’s join another category of local, bricks-and-mortar merchants that began selling online in a big way in the 1990s, often migrating existing print catalogs to the web. New or old, they face the same dilemma: how do they compete not only against major retail chains like Wal-Mart, Best Buy and Gap, but also against web-only powerhouses like Amazon, Newegg and Zappos?
Such local merchants can have an advantage, especially when it comes to relatively expensive, considered purchases, such as furniture or carpeting, says Carl Prindle, president and CEO of e-commerce technology provider Blueport Commerce.
“Maybe it’s not as important if you’re buying a book or a DVD, but for those things where there’s a level of risk in the mind of the consumer it’s helpful to have someone down the street to let you touch and feel it, someone who’s a trusted source and who usually can deliver quickly,” Prindle says.
Some regional chains, like Day’s, do try to turn their multichannel profile into an advantage, using the web site to build trust and drive traffic to stores. But others’ web strategies focus on selling to out-of-market consumers. If there are common themes, they are a focus on offering deep selection and expert advice-and that there’s still a lot of experimenting going on.
How these local retailers fare online will be important, and not only for similar retailers considering entering e-commerce themselves. It also could affect the ability of web-only merchants to compete, particularly in selling higher-end merchandise that consumers often want to see before buying.
Day’s is a prime example of a retailer seeking to draw in customers who want to see and feel, and perhaps try on, a piece of jewelry before buying.
A special problem Day’s faced was that many of the 20,000 SKUs it sells are unique items only in stock in one store. A woman in Manchester, N.H., who goes into the local Day’s store looking for the diamond tennis bracelet she saw at DaysJewelers.com is likely to be disappointed to learn that the only piece is at the Day’s shop in Bangor, Maine, 184 miles to the north.
The Day’s web site addresses that issue by putting a form on product pages that asks, “Would you like to see this in a Day’s store?” A consumer is asked for her name, e-mail address and a daytime phone number, and which Day’s store she would like to visit to see the item and when.
“We get right back to the customer and say, ‘Yes, we have the item. We’ll set it aside under your name so when you come in you can be 100% guaranteed it’s there,’” Corey says. “If the item is in another store, we’ll transfer it.”
And it leads to sales-nearly 70% of the customers who reserve an item on the web site then come in to the store and make a purchase, says Corey. “I just sold a $4,000 ring myself,” he says. “A fellow had seen it on our site. He had never been into Day’s before.”
A new platform
That feature was one of several upgrades to the Day’s web site in the last two years, including a move to a new e-commerce platform from MarketLive Inc.
The company hired experienced jewelry photographers to shoot each of the items it sells online, and crafted descriptions of each product, says Ross Lasley, supervisor of e-commerce. The company began encouraging store associates to ask for customers’ e-mail addresses, and now has a list of 12,000 names, up from 2,500 early in 2008. Lasley says site content has been enriched with an eye to bringing Day’s up higher in search results for regional terms, such as “Maine jewelry store.”
The retailer now is producing biographies of each of the company’s 140 employees, which will be posted in the store locator section of the site. Corey figures consumers will be more likely to trust Whitney, the diamond specialist at the Bangor store, if they know about her training and certification. And including Whitney’s preference for Elle brand jewelry can help raise the Day’s site in natural search for that product, Corey says.
Day’s efforts are paying off. The DaysJewelers.com site attracted 80,000 unique visitors in the first four months of 2009, a 70% increase from last year. Web sales represent 2% of company revenue this year, double the percentage of last year.
Perhaps most important, store traffic is up this year and store sales are about the same as last year, good results given the hard times in the jewelry industry-17% of jewelry stores have gone out of business in the past 15 months, Corey says. What’s more, Day’s has reduced its spending on traditional advertising by 75% this year. “DaysJewelers.com has taken the position of the primary traffic driver to our stores,” Corey says.