Christmas Wishes -- Part 2

E-tailers are reviewing everything from packaging to marketing and sales strategies. In uncertain times, nothing can be left to chance

By Karen E. Klein

With consumers distracted and normal shopping patterns noticeably disrupted this fall, what does this economic slowdown portend for the holiday shopping season -- particularly for small e-tailers? "Smart Answers" recently checked with online retail experts and small-business owners who operate their own Web sites to see how they are preparing for the holidays. They offered the following advice.

Target last year's customers with creative marketing opportunities that encourage repeat business.

Robby Stanley, whose company GetHighTech repairs and resells personal digital assistants, plans to send a special edition of his e-mail newsletter to the 3,500 customers on his mailing list. He'll be pushing holiday specials and also offering tips and new-product reviews. By including the how-to information, he makes the newsletter more than just an ad and insures that it will be well read, forwarded to online PDA-users groups, and printed out and passed around by techies.

"I get up to a 50% response rate on the newsletter, which is phenomenal," says Stanley, of Morgan Hill, Calif. Along with the newsletter, Stanley is introducing new gift items for the holidays and has stepped up his online advertising. "I'm expecting a 70% increase in sales this year over last Christmas," he says.

Ken Harris, CEO of online gift-basket firm Mrs. Beasley's, is mailing his customers copies of their previous gift lists so they can make changes and reorder by fax or online. As Christmas draws near, he also sends free samples of his new products to every client who has ordered goods worth more than $250 -- and he's cut a barter deal with a cable TV station that will see him send gift baskets to the station's blue-chip customers in exchange for ad time.


  CEO of Web marketing and hosting firm Lucy Reid, recommends that Internet entrepreneurs make sure their Web addresses are highly visible as the holiday shopping season commences. "If you have voice mail, leave your Web address on the recording so that customers can shop the site after hours," she says. If you have a retail location, put the address on the doors and windows, and post it in your car, truck, or company vehicles. Inexpensive magnetic signs work well and can be replaced cheaply if your address changes.

Install good shopping-cart technology for online ordering if it's worthwhile, and add a telephone order line if you sell a lot of high-ticket items.

Even though Blue Fox Gallery, which sells pottery, stoneware, jewelry, and other art objects online and from a retail location in Jackson Hole, Wyo., logs substantial Web site traffic, it has opted out of online ordering. The firm's unique, highly personal pieces require personal customer contact, says co-owner Wayne Noffsinger. "Buying art is different [from] buying a mass-produced item from Kmart. Customers need background information on who we are, what we think about, why we live here. We're really selling an idea, not just a product," he says.

In a practical sense, shopping-cart technology just doesn't fit Blue Fox's needs: Once a ceramic mask or a pair of earrings sells, it's gone. There are no more just like it in stock. Says Noffsinger: "I'd have to update the site every five minutes to reflect what's really available for sale."

His Web page is updated frequently with new products, however, is easy to navigate, and serves as a good introduction to the company and a reminder to the tourists who stop at Blue Fox on the main road into Yellowstone National Park. Noffsinger says the holiday season this year has been slow to start and that fear of travel in September -- usually one of the gallery's biggest months -- hurt business a lot. Still, he's hopeful that the Christmas rush will come as usual this year -- and he is doing his best to encourage the holiday spirit by hosting an open house, complete with a local chamber music group. "I think it's going to be skinny, but if we tighten our belts, we can make it through until next year," he says.


  Experts say that Web sites selling higher-end, custom items need to provide some extra hand-holding. Telling online customers to fill out an order form and submit a credit-card number online simply isn't enough, they say. "There's an old formula in sales that is based on the assumption that you have to have build trust to make a sale," Reid says. "Trust comes from intimacy plus credibility, divided by risk. When the price of an item goes up, raising the risk, credibility or intimacy have to go up, too. That's what a personal relationship does."

Pay for extra professionalism and care when packaging and shipping orders.

Send out your orders through professional drop-shippers or well-established private delivery services, experts say, to avoid hassles and fears. If you are so small that you are processing and packaging items in-house, make certain that your boxes, wrapping, and labels look absolutely professional, experts say. This is a branding opportunity for your company, so take advantage of it by designing address labels with your logo and graphics. Above all, don't tie anything up with string or hand-letter it.

As a way of reassuring customers about the safety of their baked goods, Mrs. Beasley's is shrink-wrapping each muffin and tin of cookies this year, Harris says. Mail scares and lockdowns in mail rooms are a big threat to his company's holiday goals. "Since I have a perishable product, it can't sit in somebody's mail room for 10 days," he says. "We've been having problems making deliveries to the entertainment studios and other Fortune 500 companies with mailroom lockdowns, but we've gone around some of it by shipping the product to people's homes, having FedEx make the delivery, and calling the recipients in advance to have them decide how best to get the gift baskets to them."


  Don't miss opportunities for increased sales this holiday season, even if yours is a service-oriented site. Last year, experts say, even Web companies that did not expect increased orders at the holidays experienced an increase in business. Services like housekeeping, home-office organizing, manicures, and massages should all offer gift certificates, holiday specials, and higher-end packages that can be marketed as gifts. In times like this, it's hard to imagine anyone who wouldn't appreciate a half-day of pampering at a local spa.

Is your business having problems because of mailroom lockdowns? To talk with other business owners about ways to overcome them, visit BusinessWeek Online's Small Business Forums.

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