Small Guys Find Tough Going Online
By George Anderson
Increased competition, comparison-shopping sites and high marketing costs are all working against the small guy online. And, as if that was not enough good news, Patti Freeman, an analyst with JupiterResearch, said, “It’s only going to become harder to stay profitable or at least keep your margins where they are.”
The key, say merchants competing in the online space, is to find niches to exploit.
Illuminations, a candle and home decor retailer with 42 stores, has a significant presence in three states with large Latino populations – California, Florida and Texas. The company recently launched a Spanish-language web site to target this important demographic segment of its business.
Clay Lingo, vice president of Illuminations, said the company is looking to not only increase online sales with its Spanish-language site but also to drive additional store traffic.
Mr. Lingo is hoping to take advantage of a growing trend that has seen consumers researching products online before going to stores to make a purchase. According to the Santa Rosa Press Democrat, the number of retail transactions that are influenced by the internet was $464 billion last year. That number is expected to more than double by 2010 to $955 billion.
Moderator’s Comment: What do you see as the biggest challenges facing online retailers moving forward in terms of
competition, cost to acquire customers, size of the market, etc.? –
George Anderson – Moderator