Web Malls Can Help Small Local Retailers Look Big
They need a smart look and fresh merchandise to prosper just as they do on Main Street
Q: My start-up E-commerce company wants to establish a virtual shopping mall
working with a group of local retailers to carry their products online. Can
we compete with large retailers such as the Gap, Macy's, and Nordstrom's?
--C.L., Los Angeles
A: A recent Forrester research study paints a dismaying picture of local retailers'
prospects for online business: It predicted their online market share would shrink to
about 6% by 2003 from 9% currently. Face it: Most small retailers don't have the technical
resources or personnel to run a first-rate interactive site with full E-commerce capabilities,
nor do they have that "gap.com" brand recognition.
That's where E-malls come in. They provide a chance for small retailers to get their
products on the Web for a monthly rental fee or a percentage of online revenues. By banding
together, they gain collective marketing power and increased Web traffic.
You'll need to fill a niche, appealing to a certain market segment like teenagers or
working moms. Make sure your collaborators share a common vision, commit for a specified
duration to being part of the mall, and all pay the same "rent," says
Karen Glotzer, strategic alliance manager for New York City-based SmallOffice.com, an
online resource for entrepreneurs in the Soho market. To ease retailers' fears about being
lumped in with competitors, profile each store separately. Make your site directory clear
and specific, and offer participants access to the technology so they can update their
product listings periodically, add new pictures, or promote specials themselves.
Your mall will lose customers if it doesn't provide technical support to keep the site
working well. Like brick-and-mortar stores, retail sites need to be refreshed with new
merchandise or promotions. Otherwise, customers will see little reason to return, says
Evie Black Dykeman, a Forrester analyst specializing in consumer E-commerce. Perhaps you
can negotiate online customer discounts. Or you can emphasize convenience so that customers
can select merchandise from various stores and then purchase everything in one transaction.
Good search-engine positioning is key, so hire a Web-positioning firm or buy a program
like WebPosition (www.webposition.com) and design your site to optimize its placement on
search engines, says Frank Howard, owner of NH Internet Marketing Specialists
(www.imspweb.com) of Manchester, N.H. To get the word out about your site, buy opt-in
E-mail lists (where subscribers choose to be included, so they don't regard your message
as spam) from places like postmasterdirect.com. Opt-in lists have been shown to pull 10% to
20% response rates, vs. the 1% or less that banner ads bring in. Subscribe to Internet
marketing newsletters for more tips.
It takes creativity to get noticed on the Web. Clarence Wooten, founder and CEO of Web
site superstore ImageCafe, suggests auctioning a product from one of your retailers on
eBay.com once a week or once a month and including the URL to your site underneath the product
listing. "It's a way to link into the eBay community to find buyers who are interested in
what you're selling," Wooten says. How do you make your site "sticky" so your visitors will
return? Foster an online community: Schedule chat sessions or moderated discussions with an
expert in your niche. Offer fashion tips and news from fashion capitals if you're selling
apparel, for instance.
Make sure that your mall and its stores look good -- people won't trust your retailers
if their online store design is amateurish. Fortunately, attractive Web sites are becoming
more affordable. Small-business owners who don't have technical skills can create one through
companies like ImageCafe.com and e-BIZweb.com, which offer a selection of templates that can
be customized for less than it would cost to build a site from scratch.
"If you think of yourself as local, you'll remain local. But if you think of yourself as
international, you'll aspire to that and eventually get there. Don't set your sights too
low," says Jonathan B. Spira, founder of Basex Group Inc., a new technology research firm
based in New York. In other words, don't let the big guys get you down.
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