Small Firms Sharpen Sites, Reap Gains In Online Sales

Merchants are adding online stores and packing them with information and features that make finding and purchasing a product easier

By Ann Meyer
Special to the Tribune
Published November 29, 2004

If the phones at Sam's Wines & Spirits in Chicago don't ring quite as often this holiday season as last year, that's OK.

A growing number of Sam's customers are turning to the company's Web site for product information or to place orders, said President Darryl Rosen. What's more, the number of customers who have opted to receive the company's e-mails now exceeds 100,000.

It amounts to incremental sales and more satisfied customers, Rosen said, noting that together e-mails and the Web site are generating 10 percent of the company's sales.

Increasingly, independent brick-and-mortar merchants who traditionally have served a local market are broadening their reach and appealing to customers' growing reliance on the Internet by offering more sophisticated Web sites. The rudimentary brochure-type sites of yesteryear are giving way to more comprehensive online stores heavy on product information and features that make finding and purchasing a product easier, experts say.

"Many merchants have five to seven Christmases under their belt, and that sets the tone. They're more experienced," said Lauren Freedman, president of The E-tailing Group Inc., Chicago-based e-commerce consultants.

"Everybody has a Web site," said Rosen. But the trick is to offer one that is both visually inviting and easy to use, he said.

Sam's, which also has a store in Downers Grove, launched its Web site about eight years ago and has upgraded it continuously. Soon the site will offer a "my account" feature, where customers will be able to call up their purchase history and re-order without retyping their information, Rosen said. It's a feature many larger e-tailers already offer.

While the largest e-tailers continue to innovate, experts say, new software and e-commerce services are making it easier for even the smallest merchants to climb on the bandwagon.

"The barriers to entry continue to get lower," said Scott Silverman, executive director of Shop.org, a division of the National Retail Federation in Washington.

If small merchants don't have a Web site, they are missing out.

"The Internet is becoming ubiquitous as a shopping tool," Silverman said. "That's where your customers are. If you're not there, they're not going to see you."

As e-tailing has evolved, so has the way many brick-and-mortar merchants regard the online space. Gone is the "us-versus-them" mind-set of a decade ago. Increasingly, it's become obvious the two are one and the same. Even the most tech-savvy consumers spend far more offline than they do online, according to Forrester Research, a Cambridge, Mass., research firm.

"We were a bit concerned initially that we would cannibalize on our local business, because we like to consider ourselves a destination," said Jon Abt, who oversees electronic commerce at Abt Electronics in Glenview, which launched Abt.com in 1996.

But those early fears have proven false. In fact, 95 percent of Abt's online sales have come from outside the local area, Abt said.

"We really consider it a second store," he said. "It has given us more of a national presence."

Abt sees no limit to the opportunities for Abt.com, which now offers about 6,000 products, attracts about 50 million hits a month and generates 15 percent of the company's sales, he said.

But sales alone don't tell the whole story. Far more people use the Internet as a research and window-shopping tool than actually purchase online. Forrester Research suggests 65 percent of consumers "cross channels" by researching a product online then purchasing it offline. At Abt, some customers arrive at the Glenview store with computer printouts in hand, Abt said.

At the same time, consumers' online expectations are higher today than just a few years ago, Freedman said. They expect a site that's easy to shop.

Features like order confirmation and shipping status are now standard, Freedman said, and "my account" purchase histories are increasingly common.

Still, many merchants continue to make simple errors, like omitting or burying their telephone numbers. The navigation of some sites remains unclear. And sometimes, buttons simply don't work.

Online promotions also are changing. While a decade ago many of the first dot-coms seemed willing to give away the store to get a sale, merchants today are more prudent.

While many e-tailers still use online promotions, they tend to run for only a short time and may apply only to certain customers, Freedman said. Free shipping continues to be popular because it drives sales, according to Shop.org.

But this year, the free-shipping offer often comes with a condition, such as on orders over a certain dollar amount, or placed before a certain date. Nearly two-thirds of online merchants surveyed plan some free shipping offer, but only one in five will offer free shipping with no conditions, according to Shop.org.

Smaller independent merchants in particular may be less likely to push promotions such as free-shipping because they don't have the volume to justify it, experts said. Instead, they are spending more time and money to make sure their Web sites are more useful.

But convenience continues to be a top lure of online shopping, merchants say. Online shoppers never get a busy signal, notes Rosen.

Sam's Wines & Spirits (www.samswine.com) receives "a couple hundred orders every day," Rosen said. "It's hard to keep up with them. We have a lot of people pulling product from the shelves."

Still, it beats having to place callers on hold.

"From a customer service standpoint, it helps us," he said. "It makes for better service."