EBizInsider

Read the About Us page on many e-commerce websites and you may be surprised to learn the business has been open for three generations, perhaps longer. The ‘net hasn’t been around that long. How is it possible?

Family shops are expanding, moving from Main Street, USA to a second location: everywhere. Now, someone’s favorite local boutique can also become the online favorite of someone else living 3000 miles away. In this article we’ll examine how brick-and-mortar stores blend the two channels together for success.

Three Companies That Did It and Did It Well

BlairCandy.com

Pam Macharola and her brothers took their Altoona, Pennsylvania-based Blair Candy Company online in 2001; however, the family business has been open 69 years. In 1938, Macharola’s grandfather opened a small newsstand. After noticing interest in his candy, he increased the selection of sweets. Eventually the retail store branched into wholesale, supplying candy to regional businesses. Since adding dot-com to their name, BlairCandy.com has picked up wholesale accounts and new individual customers across the country.

Macharola suggested trying the Internet simply because she enjoyed buying online herself.

“Why can’t we put this candy online and see what happens?” she pondered with her brothers, neither of whom had experience in computers or the web. Macharola initially figured the website would be more of a hobby with occasional sales.

“(The web) is a major part of business now. It’s amazing!” she said of the wild success. “We were missing a ton of sales.”

Since going online, Macharola discovered other parts of the country aren’t as candy-rich as her home state. Orders have exploded since out-of-state shoppers discovered a place to buy their hard-to-find favorites.

TheTrickShop.com

Sam Blankenship and his wife, Tracy opened their brick-and-mortar magic shop and online store simultaneously. Based in Temecula, Ca., TheTrickShop.com offers magic tricks, magician supplies, balloons, juggling items and lots of gag and novelty products. Blankenship says he first got into magic as a child. Still intrigued with magic as an adult, while traveling across the US for work he’d always make time to visit the local magic shops.

“Magic shops were going out of business all over the globe. There were two reasons for it: one is that their sales were being taken by the new generation of online magic dealers. The second is that the shop was usually run by someone who loved magic, but didn’t have a solid business background. They managed to put themselves out of business,” explained Blankenship.

He always wanted to open his own magic shop, but since there was already one nearby, he didn’t think it would be fair. In 2004 he learned that shop was closing and the couple took the cyber-plunge.

“Basically, we wanted to prove that you could successfully run a magic shop that wouldn’t go out of business. It was really strange the amount of people that bet we wouldn’t be around longer than 12 months. We’ve just started our fourth year in business,” he said.

Initially Blankenship started the online portion of the business just to cover all the bases. Only recently did he decide to really invest in TheTrickShop.com.

“I realize that we would have had much more volume had we spent a bit more time on maintaining our website. We settled for a ‘not so great’ design and didn’t do things like updating our item mix with the newest and hottest items. Sadly, we underestimated the power of our online model and I hate to think about the dollars that we lost over the last few years,” he said.

BedBathStore.com

After putting up an online store for a college project in 2001, Mike Reichman decided his family’s Lynbrook, Long Island, NY retail store should also enter cyberspace. So, he and his father launched BedBathStore.com and while they continue to get a good amount of foot traffic, their primary focus has been the website.

“Revenues have increased and we have grown into more of a warehouse and shipping operation as opposed to a walk-in store,” he said. “The reach that you have by being online is 1000-fold to the walk-in traffic you may or may not receive. You can market to people anywhere in the country; that would never happen with just the walk-in store.”

Reichman says the growth has been tremendous over the past few years and they are looking to branch out into many other home and garden sectors as well.

Learning to Navigate in the New

“We went into this thing with our eyes closed. It was by trial and error at first, but finding the right developer, that took us from ten orders a day to 100 a day,” said Macharola, adding that her first stab online was with a developer that did not “get” the obvious concept of a novelty candy business.

“Candy is silly and the original developer made a corporate-looking site,” she said. “We found a web site developer who made it fun!”

As the Blankenships took TheTrickShop.com more seriously, they went to their web developer to learn.

“I also made a personal commitment to myself to learn more about the strength of the features of the Yahoo! Store so I would be better about keeping the site fresh,” said Sam Blankenship.

While his new site is in development, he’s implemented changes to his current site and is seeing dramatic results.

“In the last eight weeks, our business has skyrocketed. Our customers wanted to see new items and more frequent updates to our website… there have been days when we’ve done more volume online than we’ve done in our store. We think we’ll see an even bigger growth following implementation of the redesign and new features,” he said.

Reichman and his father also continue to learn about the latest trends in e-commerce to help BedBathStore.com.

“We attend conferences, webinars, subscribe to newsletters and periodicals and try to keep up with the Web 2.0 affiliations and social networks,” he said.

Attracting Customers: Smoke & Mirrors Allow Competition with “The Big Dogs”

Macharola explains that one of the coolest things about going online is the amount and caliber of customers who have found her. In addition to picking up numerous new accounts, big names have discovered the online store. A Hollywood producer contacted her for a movie prop. Cooking show goddess Rachel Ray stumbled upon BlairCandy.com and this January, Macharola and her football-shaped candy will be featured in Everyday with Rachel Ray. None of this would have happened if she were not teamed with professional Internet marketers.

“We were wasting a ton of money trying to advertise online (ourselves). We save money now. That’s the truth- that’s why my days are now 14 hour days now,” she joked.

Reichman agrees; he too uses a professional Internet marketing firm for BedBathStore.com.

“Having a successful website involved a lot of hard work. You have to really be savvy and look more in depth into marketing than anything else. PPC campaigns and other marketing campaigns will eat up your budget if you don’t know what you are doing,” he said.

Many online businesses fail because owners assume having a website means instant traffic and sales. They shouldn’t. Considerable traditional advertising accompanies the opening of a brick-and-mortar store. It can include everything from ads to promos to ribbon-cuttings. Successful e-commerce operators understand the marketing efforts (paid) and public relations (free) tactics required to gain and sustain customers.

Blankenship adds that an advantage of being online is that it can be a level playing field. TheTrickShop.com may look small next to a larger store, online they’re all the same size.

“It allows you to compete with ANY size competitor. It’s hard online to tell how ‘big’ you are. We’re a small, family operated business but have converted customers from our online competitors because our item mix is the same as our biggest online competitor, whose sales are gigantic compared to ours, but customer service is more personalized and we offer a better overall experience,” said Blankenship.

Like Blankenship, Reichman says customer service has been the main focus of BedBathStore.com.

“We constantly innovate and are becoming more customer-centric. We enlisted a call center which helps us enhance our customer service, with longer hours and direct contact with employees,” he said.

Since a brick-and-mortar store that’s been part of a community for years is still new to online shoppers, building credibility starts over with the new audience. A solid About Us page can help. When people learn BlairCandy.com has been in business 69 years, BedBathStore.com for 30 and that TheTrickShop.com is run by real magic experts, they are more likely to buy.

Building and sustaining relationships can also be done by communication with clients, which TheTrickShop.com does through blogs and newsletters.

“We use our blog as a way to communicate in between e-mail newsletters and will often try to talk about a subject that is not sales-related. Then, we’ll sneak in a bullet point about something we have for sale. It’s kind of a soft-sell as opposed to our hard-sell that we do with our e-mails. Also, we think the blog is often read by those customers that have not, for one reason or another, given us permission to communicate with them via e-mail yet,” said Blankenship.

Synergy Between Your Brick & Mortar and E-commerce Site

Michigan State University released a study, “Integrating Brick and Mortar Locations with E-Commerce: Understanding Synergy Opportunities,” which examined brick & mortars that went online. The researchers concluded that regardless of the size of the business, having a physical location builds trust for three reasons: Reduced consumer risk, the ability to leverage brand awareness, and also an affiliation with a local social and business network.

Having an online business can also grow the brick-and-mortar business. A physical presence allows business owners to create personal relationships, gain more foot traffic and even become a tourist attraction. Macharola says that several loyal online customers have asked if they had a store they could visit. Of course they do; that’s their roots.

“Picture walking into a grocery store, but its all candy,” said Pam. “People have come from hours away to visit.”

The MSU study also found that having an online presence strengthens relationships with existing physical customers. Even though a customer may have preference in shopping in person, having an e-commerce channel can help business owners stay in touch with customers and encourage them to buy online when they don’t have time to shop. Blankenship says many of his customers research products online, then buy in person. So, the website can also become a tool to improve and/or streamline the in-store shopping experience.

In addition to search engine marketing efforts to reach a wide audience, implementing the e-commerce element with local advertising efforts is seamless: just add the URL to ads and promo products.

E-commerce allows people to virtually find unique products that aren’t available locally, or to continue giving business to companies when they can no longer visit physically. The MSU study looked at a family-owned specialty gift store in a tourist location. Despite being small, the store has become a top online retailer for niche Christmas items. Going online allowed the company to reach the masses, as well as create repeat online customers out of people who shopped in the store on vacation, but may not return in person.

The MSU study mentions some trends common to the companies they studied: online coupons, in-store pick-up/returns and in-store events listed on the website. Blankenship utilizes his blog and e-mail blasts to highlight in-store magic demos, which in turn brings in foot traffic. When there isn’t a live demo, customers are treated to a looped DVD, hosted by the Blankenships’ teenage son Chris. The demos also play online.

Another trend the MSU study reveals is the use of in-store Internet kiosks. This works for brick-and-mortar stores who may sell additional products exclusively online, such as if they use a drop shipper. The kiosk allows in-person shoppers access to those items, too.

Summing Up

There is a new day dawning in the world of commerce, embodied by the stories above. More and more e-commerce operators are turning warehouses to showrooms, while nearly every established brick-and-mortar store is examining the Internet. The reasons are obvious. Each type of commerce complements the other. Only in a real store can you touch it and feel it; only the Internet lets you shop at 3AM in your pajamas without leaving the house. The future is clear. Businesses will not do business in real space or cyberspace. They’ll do both if they want to flourish.

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