Merchants Use Online Retail to Pull in More Customers

By Bzdega, Sarah

Since Tanya Keith launched a Web site a year ago to accompany her Simply for Giggles store in the East Village, sales online have at least doubled each month. The Web site also has attracted more customers who research her products online before going to the store to buy them, and it has happened without her having to market the Web site.

Although online sales remain a small portion of her total sales, Keith, along with several other local retailers, realizes that a Web site can be a powerful marketmg tool and business growth initiative.

“It’s essential to what we’re doing, because I feel people take us much more seriously and it’s important to them,” she said.

Many online retailers will continue to benefit from consumers’ ever-growing use of the Internet, especially this holiday season.

According to a National Retail Federation survey, shoppers plan to use the Internet for more than onefourth (28.9 percent) of their holiday shopping. Nearly half of those surveyed plan to make at least one holiday purchase online, up 36 percent from three years ago, and 88.7 percent regularly or occasionally examine products on the Internet before buying them in a store.

On the flip side, online retailers are seeing an exponential boost in online sales. According to another NRF survey taken Nov. 29- 30, holiday retail sales were 50 percent higher for one-fourth of online retailers than the same time last year and 26 percent of retailers have had a 25 to 49 percent boost in sales compared with last year.

Although online retail continues to have double-digit growth, Kenneth Stone, a retired economics professor from Iowa State University, points out that online sales are only about 5 percent of all retail sales.

But retailers like Keith have learned that a Web site can also drive traffic to the store. Ten percent of Keith’s total sales are online, but she said customers often mention that they looked at her Web site before visiting the store.

Although 60 to 65 percent of total sales occur in November and December, the Chocolate Storybook’s Web site also has become a useful tool to boost sales throughout the year, said Meg Shearer, co- owner of the store. Sales have increased every year since she launched her Web site four years ago.

“For us, it’s not so much the percentage of sales as it is the number of people visiting the site, getting their ideas and calling us from there,” she said.

Her actual online sales are probably around 5 to 10 percent of her total sales, she said, but the traffic to the store makes the $6,000 investment in revamping the site worth it.

Melissa Lare, owner of Dam Good Soaps, sells her homemade soap and candle products at craft shows and wholesale to retailers, but hopes her Web site, www.darngoodsoaps.com, will handle most of her sales in the future. She said online sales this year are about 18 percent of her total sales and are up from 11 percent last year.

To drive online sales, many online retailers are offering exclusive discounts, such as a percent off purchases or free shipping. According to a NRF survey, 83 percent of retailers surveyed offer free shipping compared with only 64 percent two years ago.

Local retailers have tried some exclusive online deals as well. Many offer free shipping for orders over a certain amount. Chocolate Storybook just started an e-mail newsletter that comes out a few times a year; customers who sign up receive a 30 percent off coupon.

But for many local retailers, the Web site is a complement to their store, not the future of it. “We’re a boutique with a Web site,” said Keith. “We don’t want to become an online discounter.”

Copyright Business Publications Incorporated Dec 18, 2006

(c) 2006 Des Moines Business Record. Provided by ProQuest Information and Learning. All rights Reserved.