How Retailers Are Using the Internet Today

“It’s easy to see the benefits of a good Web site,” states Jeanne Oster of Guitar Stop in Cambridge, Mass. “I was paying $85 a month for three lines in the Yellow Pages. Now for just a few dollars I have 500 pages available online 24/7, and I can change things any time I want.”

Oster has a modest-sized shop that does good business online – so much so she changed the name of the store her father began in the 1960s to reflect one that was more Internet-friendly. Just one example of how the MI industry has adapted to the Internet. As the results of our survey (page 31) show, retailers are embracing the Internet more than ever before, and using it in a more sophisticated manner. The common mantra heard often is that it “levels the playing field.”

And while the trend seems to be for retailers to grow their e-Commerce portion of the business, just as many have not.

Stephanie Wilds of Acoustic Corner is definitely anti-e-Commerce. “If I wanted to be selling merchandise over the Internet, I’d be selling office supplies,” she says. “Also, it’s impossible to maintain a competitive Internet business and run a responsible, service-driven showroom at the same time. The two are not economically compatible, as one undermines the other.”

There is a revolving door: Some are now getting into e-Commerce, just as others are getting out.

“e-Commerce is almost completely price-driven and it helps if you offer free shipping,” said Dave Strohauer of Earthshaking Music in Atlanta. Since 1995, they have sold online, and he’s seen Internet sales go from 40 percent of his gross to a mere $40 a month. Now they are shutting their e-Commerce operation down completely. “To do e-Commerce right takes a lot of time – time away from serving your in-store customers. We see no point in staying in that market.”

He adds that by eliminating the need of a T1 data line, which he felt was necessary for Web transactions, Earthshaking Music will save nearly $300 a month. While doing this, he switched carriers, loaded key employees up with iPhones, and looks forward to saving $3,600 a year.

Donn Bennett Drum Studio is one who is moving into e-Commerce more seriously. He’s also one of the growing many to use Facebook as a marketing tool. With that store’s most recent Web site update, which was launched in July, their Facebook presence is incorporated into their site’s front page. There they post updates a couple of times a week – everything from announcing a change in store hours during the summer, to announcing special product releases, to promoting clinics. He is not alone.

Another trend: professional help. Increasingly, MI is reaching out. Mark Lisle of Lisle Violin shops in Texas sums it up: “The problem is we’re musicians, trained in art and music or both, but not in computers.”

Most retailers are getting savvier at using e-mail. For Bennett, who says they “religiously” ask for everyone’s e-mail, updating customers on sales and events are critical to the business and “conversion rates on these e-mails are very good.”

But it’s an ever-changing world. In the survey, Frank Hayhurst of Zone Music in Cotati, Calif., wrote, “We reach our older client base, those 25, 30 and up, through e-mails. Younger clients look at e-mails like you and I now look at faxes – something that is quaint and archaic from another era. Everything they do is text based.”
Yes it’s a world where if you’re 25, you’re “older.” More pearls to stew over: If Facebook was a country, it would be the third most populated one, ahead of the good old U.S. of A. Another factoid: More than half of the human race is under 30. They’ve never known life without the Internet.

Here’s a half a dozen “older” retailers who have taken a variety of approaches to online success.

In a quaint tourist town that promotes itself as the “front porch of Western North Carolina,” Acoustic Corner is celebrating its 10th year as a store and its 10th on the Web – both operations went up simultaneously. Luthier Tom Fellenbaum had been building his instruments for years and then he needed to move his shop to place where he could control temperature and humidity better. After finding a large space in downtown Black Mountain, he turned to his wife, Stephanie Wilds, and suggested they put up some walls and have space for to display his instruments.

Today they display his as well as products from Eastman, Larrivee, Seagull, and most recently Goldtone, among others. From day one they knew a strong Internet presence was key. They turned to a friend who is a DJ and a photographer, paying him a yearly fee plus an hourly rate when they need major updates, which they do once or twice a year. “It’s worth having someone else take care of it,” Wilds says. Part of the fees goes to paying for hosting. “There plenty of free sites out there, but they are a real pain and don’t work that well.” In addition to the IT consultant on retainer, two others do general maintenance on the site taking up less than five hours a week.

“But if you’re talking about time spent answering e-mails, that’s something else,” she sighs. Wilds has multiple e-mail addresses, and the employees are all listed on their site with their own e-mail addresses making all employees accessible to everyone. Many e-mails just ask if a specific model is in stock, but others ask detailed questions that require more time.

Their home page opens with a group picture of the crew (including Toby the dog), and text about who they are. “Our best product is ourselves,” she says. “We sell a lot of great instruments, but our customers come to us because they appreciate us. We take the time needed to find them the right instrument.”

Though they get a lot of queries and have multiple e-mail exchanges that lead to sales, they are defiantly against e-Commerce, so much so there’s a detailed reason why this is on a page on their site. “Buying an instrument is like picking up a dog from the local pound – you have to see it, get to know, build a relationship with it.”
They collect e-mail addresses easily enough – the town itself is a draw and they get a lot of foot traffic. Keeping a signup sheet by the door provides a steady supply, and on the bottom fold of their home page they invite visitors to sign up. “Our e-mail list fosters good will, though its getting harder [to e-mail blast] all the time because [sites] punish you for trying to send more than 500 out at a time,” she says.

“The rules concerning spam e-mail are getting tighter and tighter,” laments Wilds. “As a confirmed spam-hater, I’m doing my best not to contribute to it, so we use our e-mail [blasts] on a very limited basis.”

But the site is to drive customers in their store. “Our showroom is only so big, so we can’t sell things we aren’t proud of it. We can talk proudly to customers about the story of Seagull, about the story of Larivee.”

Mark Lisle, Lisle Violin Shop, Pasadena and Houston, Texas

This upscale violin shop that caters to students and professionals has taken their Web presence seriously from early on. Founded in 1984, they launched their first Web site in 1995. Owner Mark Lisle says several employees spend about 15 hours a week on it doing general updates.

They just loaded up a new version in late July. A local freelance Web designer built their previous site, but when they wanted to integrate the new one with the Tri-Tech AIMsi POS inventory/accounting system, they turned to… well, Tri-Tech. He says he was especially drawn to their instrument rental application. “It’s a simple template, but it allows us to give customers choices and show different rates.” He’s also pleased they’ve been responsive to his needs, like listing the string instruments in score order as opposed to alpha order. “They said no one has asked them to list in something other [than alpha], but for a string shop, it looks stupid not to be in score order and we don’t like to look stupid.”

At one point they sold online, but they choose to stop and make theirs an informational-only site. “For a high quality instrument shop, providing information is far more important than selling on the Internet,” he says. “Internet-smart customers are learning that online purchasing is more appropriate for inexpensive merchandise. I think it’s better to talk to people in the shop, then they can make a more educated decision.”

They emphasize their service-oriented philosophy.

“People come in frequently with instruments they bought on the Internet, and I’ve seen it all,” he says. “I’ve seen violins they paid $500 for that aren’t worth anything, and another at that price that is worth $3,500. I have one customer that really knows how to shop eBay, but otherwise it’s playing the lottery.”

For the new site, he and Carolyn Prindle, sales manager, discussed general structure. Key to the design was it be all-browser friendly. “When you have a page with the buttons on the top, it doesn’t work with all browsers like having them on the side.” They worked with Tri-tech Web designers, and he says that all aspects of working with the company has gone well. “If there’s an error, they work hard to make it right. I’m pretty happy with this system.”

He had actually wanted to do the new site sooner then he did, but he says the thought of paying a third-party designer to set it up only to have to spend money integrating it with his accounting system was not appealing. “I guess we waited it out for a while. It wasn’t always a priority – we thought we should take care of the customers we had first!” he laughs. “Not everybody does that.”

Key in these heady times was the ability to update prices as often as needed. “This year prices are going up and down. Some drop, some come from a country that suddenly has a crazy currency exchange … but this is easy to work with.”

Perhaps most enviable is his domain name: violins.com. About 20 years ago he had the foresight that this Internet thing was not going to be a fad, and kept his eye open for its availability. He admits that he gets some “fairly substantial offers” to sell, but it suits his needs just fine.

Jeanne Oster, Guitar Stop City, Cambridge, Mass

Owner Jeanne Oster so understood the power of the Internet she changed the name of her nearly 50-year-old store to take advantage of its power.

Founded in 1962 by her father as Central Sales Music Company as primarily a used instrument shop (their first new brand was Aria guitars which they acquired that year), she and her four siblings grew up working in the store. After her father passed away in 1986, Oster eventually purchased it.

The retail operation has moved a few times, but always has been fairly modest (today its just 500 square feet). The size contradicts its reach: with her sister, Annette Oster, as manager, and a couple of part time employees including teachers for its lesson program, the store does a good business, most of it online.

Since 1996, the store has had a Web presence, though then it was CS Music. But she quickly realized that not only is it not the kind of name that pops up in a search engine when looking for guitars, even her long-time customers had trouble remembering the name. In 1996, a cousin suggested she rethink the moniker, and seeing that Guitar Stop was an untaken domain, took it, and changed the name of her brick and mortar store accordingly. “The old name didn’t tell anybody what the store was, but Guitar Stop … that’s a good name!” she declares.

Fearlessly, Oster taught herself sime Internet basics. She bought some introductory Webpage tutorial software, and through trial and tribulation, kept making it better. Then she picked up a book on HTML and “within 24 hours I taught myself to do tables, which is key.” In 1999 she began work to become an official Fender Web site, which she would eventually achieve – no easy feat, but one she’s glad she accomplished. Most recently she taught herself Java, and now menus pop up when the mouse rolls over certain items.

Today she and her sister update the site’s inventory on a daily basis, though they spend no more than five hours a week doing that.

Interestingly, her savvy choice of name change has not only lead to a healthy Internet business (20 to 30 percent of her sales), but more locals are in fact finding her via the Web. Occasionally she’ll get an order and before she ships it she notices it’s from someone in the neighborhood – she’ll notify them and say, “if you want to pick it up today…”

Things continue to evolve. “From 1999 until 2008, we were shipping nationally 30 percent of our annual business through the Web site,” she says. “In the last couple of years, we have found that people are using the site more as a research tool and coming into the store to purchase locally.

“We try to refresh the look of the site at least once a year. I try to keep improving on it because a Web site is incredible – it really levels the playing field,” Oster adds. “You can’t compare the bang for the buck.”

Donn Bennett, Donn Bennett Drum Studio, Bellevue, Washington

Bennett is on the doorstep of enjoying the store’s 15th anniversary, and he’s had a Web site presence for most of it. Recently they put a dedicated employee to handle all things Internet related. Aaron Ameen, 20, is caretaker for all the eBay sales and Web site management, and was key to the sites recent revamp. Prior to him, Bennett had made a couple of “false starts,” including working with a developer who produced a site that didn’t work for them, before hiring Ameen, who is conveniently a drummer and a customer. “I like to use people from our immediate circle for things, and there he was,” he says. “The main thing is to find someone who can really understand your business and what you need. Communication is important.”

Their new site just went up and they are still working out kinks, which Bennett takes a long view on: “It’s like a remodel – it happens in a couple of weeks, but then months later you’re still working on the details.” In its first few weeks of being up it’s functioned well, but achieving 100 percent of what he wants for it will take some additional time.

Their Facebook link is “growing all the time” though Bennett takes no credit for that: “I’m frankly clueless about it, but Aaron is great at working that. We’re getting better at it, too – learning how to use it effectively as opposed to just putting stuff out there and hoping somebody finds it.” Bennett also happens to be a drummer’s drum store, counting Ringo Starr as a long time customer. At the end of July, right as he was heading down to see Starr’s concert in southern California, he had the idea to make a birthday card for the 70-year-old and let his customers sign it. How’d he get the word out? Facebook post. Earlier they used the social networking site to let drummers know that that had a special week long “tasting” of Dream Cymbals. Over 100 of their cymbals and gongs were brought in, the event made more successful because of their ability to reach out to their nearly 500 “friends” and promote it.

While Bennett has long operated an active eBay store, one of the motivations of redoing his site was so that it would have e-Commerce capability. How, when, and even why that might happen is something his team is working on. “First you have to set it up on the back end, but then I don’t know yet what will make us stand out online so we can compete with the hundreds of other sellers.” Providing content that shows off their expertise with all things drums, particularly their uncanny ability to track down any obscure or vintage drum product, will have to be in the mix is one decision he’s made.

But as it stands now, just with his eBay sales, they average about 10 to 20 percent of their sales online through that fluctuates.

Early on they saw the importance of gathering e-mails, though: “Everyone who walks in the door is asked for their e-mail address,” he says. But they assure them they aren’t just going to get sales information, but the inside track on clinics, artist appearing, and in-store and local events drummers would be interested it.

Jack Phillips, Jax Music Supply, Midlothian, Virginia

Jack Phillips spent 20 years in the insurance industry, and then in 2007 he followed his heart and opened Jax Music Supply. The guitarist was frustrated at the lack of choices at the music stores in his central Virginia area. Jax does have a storefront, but its mostly an online operation. “We don’t push the [brick and mortar] part, and we aren’t even usually open on weekends,” he says. “We’d rather keep our labor cost low, and focus marketing efforts on the Internet.” His brother and business partner, Ed Viar, and one other employee is all the operation needs.

His business strategy includes carrying a wide variety of accessories that many of his competitors don’t carry. This includes lots of pedals and lots of sticks. Recently he’s moved into expanding his line of metronomes and tuners. But they also carry instruments, like Danelectro, that aren’t always in the big stores. He’s selective: “I never compete for margin on a guitar.”

They spend just 15 hours a week updating the site and handling orders to handle 95 percent of their business.

“In 2009 we didn’t do as bad as the rest of the industry, and were down only three to five percent,” Phillips says. This year is a little tougher, though July was looking much better. “I have high hopes for August, when kids start going back to school.”

If just a bit less than 100 percent is your business, you pay attention to how it looks.

“We just did a major overhaul in the last month or so – the new site is a little cleaner.” They tend to overhaul the site every six months, but their real effort is in search engine optimization (SEO). Otherwise, they spend a lot of time on back end integration. “We used to pay a company to do that for us, then I wrote an application that does most of the integration and we save $1,000 month now.”

Jax’s site is loaded up with Facebook, Twitter, and MySpace. “Facebook is really important, as MySpace is really on the outs, but people still like to see that we’re there, too,” he says. “We do a lot of product announcement on Facebook.” It’s especially effective with hard-to-get products, like the hand-built Wampler pedals. “They tend to run out, so when we get those in, we announce them.”

His Facebook application feeds into his Twitter account, but he’s less impressed by it. “We have about 50 Twitter followers, but nobody twitters back.” On Facebook, they have some real exchanges with customer. “That’s our philosophy – we go where the people are.”

There are challenges keeping up with customer’s expectations, though. “People’s expectations are really high, and it’s a challenge to meet them.”

John Spinelli, Seminole Music, Seminole, Fla.

Seminole Music’s home page is unique: No instruments, events. Right below the clean list of buttons to take viewers to what they want (guitar/bass, amps, drums, et cetera), is a big picture of Gretsch endorsee Stanton Moore promoting a clinic based on a new instructional book/DVD published by Hudson Music, Groove Alchemy. Below that, another big banner urging you to enroll in rock and roll band camp. Below the fold, a short paragraph about the store, then its location and hours.

Giving the clinic, still six weeks away, so much exposure on Seminole’s site is important for a reason. It’s called “community building.”

“A lot of retailers don’t want to do clinics – they are a lot of work, they tie up your store for a day, and they don’t necessarily make registers ring that day or the next,” John Spinelli says. “But people get to know us. I don’t know how many times a couple of days later someone will call and thank us for bringing in the amazing player we did.”

Spinelli says the store was founded in 1982, and for the last 15 years he’s been manager. Jeff Bain, who has been with the organization 26 years, handles their Internet activities. Their eBay store keeps him and others busy over a collective 40 a week.

Their eBay store has a different name: Online Music & Sound, which has recently been revamped. Recently they became Fender compliance, and continue to work to add products. “Hopefully by the end of the year, everything should be up on it!” Between 20 to 30 percent of the operation’s overall sales comes from online.
Life in e-Commerce land is frustrating: “It cost big bucks to get on Google, but we’ve had a little success working around that. [Success takes] time and money. Getting good SEO is key and that’s something we really need to dig into more.” They generally have between 700 and 1,100 items on eBay on any given day. But he adds that increasingly, people don’t trust eBay and Craig’s List. He also talks about eBay being expensive.

Because of all this, they are striving to set up their own e-Commerce site. “We’ll still always have eBay because you get a lot of exposure there and everybody shops on it. Sometimes people start off looking for something used, but then see that we have it new at a great price.”

They collect e-mails at the counter, and also do giveaways where they ask for it. Most that go out are to inform customers of sales events.

There online rental program is a hit, and its homegrown. Dawson Flinchbaugh, owner of the store, also owns Veritas Instrumental Rental. Years ago at school time he had a bunch of instruments in the backroom, and thought they’d offer to rent through other stores. “It became one of the largest companies that does this in the country,” Spinelli tells. The program, which Seminole Music uses, allows online rentals where the store gets a commission but don’t have to inventory the band instruments.