by April MacKinnon, Owner of Nurtured and Anointment Natural Skin Care
Many entrepreneurs, particularly women and mothers, begin businesses that can be promoted online. This maximizes the flexibility of an entrepreneur’s schedule: websites are open 24 hours a day, 7 days a week with no attendants or staff required. A website is a perfect way to test the market with low risk and investment, and also allows you to determine your level of commitment to your business: do you prefer to work part-time, or are you more interested in capitalizing on your full market? While the internet is wide-reaching, it can also dilute your market. My business, Nurtured, began online in 2006 and successfully moved to a retail location in 2009.
If You Build It, They Will Come
Depending on the industry you are in, the size of the market, and the level of competition, you may find that directing traffic to YOUR site is more challenging than you imagined. As with any business, the least expensive way to bring people to your website is by word of mouth, or “word of mom”. This can be done in person or via social networking media. The work you do to promote your website – for example, search engine optimization, forum participation, paid or unpaid web advertising – and the financial goals you have set for your business will also drive the effort you put in to marketing. If you prefer to operate a remote, mail order business, the manner in which you promote your business will vary significantly from the promotion tactics you will use to capture your local market. I have seen a significant change in marketing practices between our entry into e-commerce in 2006 to today. Social media has replaced the newsletter, in our case, and is an exceptional way of building word of mouth both locally and globally.
Above: Bamboletta Dolls on display at the Nurtured store
Christina Platt, Mom and Owner of Bamboletta Dolls agrees: “I think that my popularity has been attributed to a few things – the first being word of mouth. Facebook has been incredible as well for spreading my product – once the fans hit 1,000 things just exploded. I also got some incredible press from Mothering, Celebrity Baby Blog, CMP that exposed me to a whole other market that would have normally not looked at natural dolls.”
When our retail store opened, we were able to represent Bamboletta as a retailer on a very small scale. She has since closed her retail accounts to focus on direct sales. Her thoughts on opening a brick and mortar store: “I think because I only really sell one thing – and things that relate to that one thing – the dolls – my situation is much different than a traditional store that sells items. If I lived in a large city I may have thought of one day opening a store but my issue is inventory, we essentially sell out as soon as we make dolls, with dolls not staying on premises for more than a few days – I never ever have inventory.”
If your scale is small, you will want to consider inventory. Christina’s dolls are labour intensive and require a significant amount of time and attention to detail to complete just one. If your product is hand made by you, and you do not intend or want to have a larger scale manufacturing plan, a brick and mortar store may not be in your best interest.
Know Your Customer Base
Can you define your customer base in very specific terms? In our case, we noticed that educated women 25-34 were shopping online, while educated women 35 and up were not. Online, we were missing out on mothers who chose to start their families later and often had more disposable income. We were also missing out on gift purchasers: the mothers, grandmothers and friends of the women who WERE shopping online. Even customers who took the time to create a gift registry for their baby shower found that their family and friends did not use it. This created a significant gap in our market and did not allow us to capitalize on our potential market share.
Use Your Powers of Observation
As you increase traffic to your site, it is not uncommon to notice a number of orders come from one town or region in particular: this is common as word spreads throughout a group of friends or a play group. Keep watching these trends. If you’re the analytical type, keep statistics on where exactly your traffic is coming from and if there are patterns. If you have a customer list that includes postal or zip codes, you can export them to Google Earth and map your customer base.
Are your customers mainly local? In the case of Nurtured, our customer base was more than 70% local, and when broken down even further, the majority of those customers were living in one particular neighbourhood! Strong statistics such as these make a decision very easy when deciding where to locate a potential brick and mortar store.
Test The Waters
If you are considering a brick and mortar store in your city, attend a farmer’s market, craft fair, or plan a “direct buy” event to test the market. Before deciding to open a retail store, Nurtured rented a café on two separate Sunday evenings, set up a “show room” and had two buying parties leading up to Christmas. The success of these events made it very obvious that the market was now ready for a destination store such as ours.
Above: The Nurtured store fully stocked and open for business at 2571 Robie Street, Halifax, N.S
Be Prepared To Work Hard
One significant benefit to opening a brick and mortar store following a successful online store is that the risk of failure due to lack of customers is significantly reduced. However, the effort required to operate a retail store cannot even be compared to the level of effort required of an online store. For many months I worked 7 days a week, getting the store ready, making policies, hiring and training staff, learning the rules of accounting in a much larger business. The benefit is that our revenues increased 300% in the first year of moving from online to brick and mortar, in the middle of a recession, no less. A positive benefit of having established yourself online is that your existing customers will follow you to your retail store, significantly decreasing what could be a very slow and stressful establishment period for a completely new business. And, depending on your customers, they will either tell their friends or bring them in to see what they have been missing.
Network with the Business Community
Having a retail store will also legitimize your business to the business community: I was not taken seriously as an online business owner in our business community, but was welcomed with open arms once our retail store opened. As a result, Nurtured has become an award winning business in what most people assume is our first year of operation, but is actually our fourth.
For my company, opening a retail location was very obviously the right decision, we are now forefront in the market at a time when competition and interest in our products is increasing. We have a strong reputation and incredible staff and customer service. The store is established enough that I can now work four days a week rather than seven and draw a reasonable salary for my family.
