Byline: MONICA GINSBURG
Since opening in 2008 in River North, Marbles: The Brain Store has grown into a $3-million business selling toys and puzzles to improve memory and critical thinking, primarily through its stores. Prior to a major overhaul last year, sales from the company's website (MarblesTheBrainStore.com) accounted for less than 1% of revenue.
"Before we spent gobs on a website, we wanted to learn what works and doesn't work in the store," says Scott Brown, the retailer's 30-year-old chief merchant. "We knew we needed a better website. We just weren't ready to do it."
Part of the growth strategy at Marbles--with five Chicago-area stores, three in Minnesota and 10 on the drawing board for the East Coast--is raising $5 million from outside investors. But to seal the deal, the business had to overhaul the website. "We need the web to work and work well," Mr. Brown says. "It was a critical piece for investors."
After a six-month makeover, Marbles relaunched the website in October with fresh text and photography, "Brain Coach" product recommendations and reorganized product categories like memory, coordination and word skills. Educational information on brain health, which previously dominated the home page, is now under a "Brain Fitness 101" heading at the top of the page.
"First and foremost, we need to be a site that sells products," Mr. Brown says. He expects the $130,000-to-$150,000 redesign and monthly web-hosting fees to pay off: By yearend, revenue from web sales is projected to top $1 million and account for 10% of total revenue.
While most small businesses have a website, many have not dedicated the resources to make it viable. But as online shopping outpaces traditional retail spending, more see it as a vital piece of their operation. Simply having a static web presence doesn't cut it anymore. To capture a slice of the $165.4 billion that online shoppers spent last year in the U.S.--up 14.8% from 2009--your website has to grab visitors, draw them in, serve them quickly and entice them to come back.
"For people who used multiple channels to grow their businesses, the website often was designed as an afterthought," says Brian Grady, a principal at Chicago-based e-commerce agency Gorilla Inc.
TAKING ON THE BIG GUYS
The explosion of Facebook and Twitter, the growing use of video, and the ever-expanding array of electronic devices designed to access the web, including tablets and smartphones, provide opportunities for small businesses to compete with bigger players--but only if their online offerings are well-designed and easy to use.
Mr. Grady says small-business owners should budget 3% to 5% of current online revenue to website redesign and allocate an additional 30% to 35% of the redesign costs for ongoing maintenance and promotion. Business-to-business companies typically budget $100,000 to $500,000 for similar services, he says. In general, expect a return on your investment--measured in increased conversion rates, average order volume and the number of visitors--in approximately six to 18 months, he says.
A major web investment often is a "leap of faith" for small-business owners worried that they can't compete online, says David Duerr, CEO of Straight North LLC, an Oak Brook-based Internet marketing company.
"But people are actively looking every single day for what you produce," he says. "Your website has to be a great experience for your customers, regardless of the size of your business, or they will go somewhere else."
Three years ago, Lori Andre, owner of Lori's Designer Shoes, decided to get serious about selling her footwear and accessories online (LorisShoes.com). She'd maintained a website for 12 years and noticed that each time she improved the site, there was a jump in sales.
Ms. Andre started the business in 1983 and now has stores in Lincoln Park, Northfield and Highland Park. She declines to disclose annual revenue but says sales doubled in 2010 from the previous year.
By focusing on selection, value and customer service, including staffing someone in that function full time, she says average online sales per customer jumped 20% over the last 18 months.
"People come back to the store weekly because they know we're always getting new merchandise in every day," says Ms. Andre, 52. "We wanted to replicate that online by adding more products and doing it more frequently. We've been really diligent about that."
Convinced of the growth potential on the web, and with no immediate plans to open another store, Ms. Andre invested $75,000 last year in a new web hosting platform and design to improve navigation and customization. Customers now can shop for shoes by style and size, features they had been requesting for some time. The retooled site, to launch later this month, also adds user-friendly features like a "look book" highlighting fashion trends for the season and blog posts showing the clothes and accessories Ms. Andre packed for a recent three-week buying trip to Europe.
Ten employees run the Internet site, and Ms. Andre expects revenue from online sales to "far exceed" her flagship Armitage Avenue store within three years. She says international sales, which currently account for 12% of the online business, are a growth area, boosted by strong-selling brands like UGG Australia and Jeffrey Campbell, which have limited availability abroad.
B-TO-B
For years, Jerry Freund, president of Chicago-based Mid-American Printing Systems Inc., says he didn't believe the web could be an effective sales tool for a business-to-business enterprise like his. He built the $7-million printing company, which started in 1985, by using traditional "meet-and-greet rituals and telemarketers that put sales people in front of prospects often before they were motivated to buy," he says.
Although revenue was up 15% last year, Mr. Freund, 57, says morale had dropped as conventional sales channels had increasingly become less effective and more competitors and potential customers moved online.
"Our website was basically a brochure with little or no functionality, and it wasn't attracting the corporate clients we were looking for," he says.
Urged on by family members and his sales team, in June he hired a web development firm for $15,000 and three months later launched the updated website (MidAmerican-Print.com), where customers now can request an estimate, upload multiple files and get company news and industry information. An additional $750 to $800 a month goes to search-engine optimization and other marketing efforts.
He says the virtual tour showing the company's scope of services and industry certification seals on the home page "make us credible in the eyes of a more sophisticated print buyer."
Mr. Freund says he's encouraged by early interest: In January, typically a slow month for the company, he fielded 25 inquiries from website visitors, most from firms with 100-plus employees--the right size for Mid-American's capabilities.
"We could have kept going with conventional, antiquated methods that sometimes don't work, but a year from now we'd probably be in some pretty serious trouble," he says. "I just knew something had to be done."
Copyright 2011 Crain Communications Inc. All Rights Reserved.
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