By Todd Mogren
C O N T E N T S
I would like to thank George for asking me to tell our story. Hopefully other list members might find something within to help in developing your own site's full potential.
Coastal is a brick and mortar (B&M) store. We have had a physical presence in Hartford CT since 1981. We are in the business of selling name brand hand and power tools to professional contractors, large companies (for physical plant maintenance and production), local, state and federal governments along with serious do-it-yourselfers who enjoy home repair, building or woodworking. Our basic philosophy is buy in large enough quantity to get the very best price and pass along those savings to our customers.
We are first and foremost an everyday discounter. We do not run sales. The price today is the price tomorrow and it stays the price until we re buy the item and adjust up or down accordingly. Now that seems like a business model you may have heard about but in 1981 it was not a common one. Coastal started a mail order catalog business in 1985 and at it's peak mailed 750,000 catalogs. In mid 1995, I approached the owner of Coastal about an Internet site designed to sell tools. We launched in October of 95 and made our first sale via the Internet in March of 1996.
The goal of the site from day 1 was to sell. It was not designed to be a brochure of what we do. It is still common in our market to find these kinds of sites. We sell first and foremost. The design is built around finding the items as quickly as possible and in as many ways as possible. If you decide to visit the site http://www.coastaltool.com/ind/ you maybe shocked at it's utter lack of graphic cohesion. It is in some eyes down right ugly. It lacks many features found in other sites. We use standard type face and very few graphics. If text can do the job we use text. It even lacks a search feature.
Since our market is populated with many brands of the same item, we do select what we feel is the top choice. We named that "Best of Category" and label each selection as such and offer that link fairly high on the main navigation page. This feature not only helps our customers decide on a product it helps eliminate email questions. Before we added this, the "What is your recommendation...?" type of question was asked very frequently. That type of question is now only submitted when someone needs a clarification. It also had the added bonus of receiving very nice reviews in both newsgroups and other Home Improvement sites leading to a large number of permanent links.
Customer service centers around "The Tool Doctor". We answer any and all tool related questions and we estimate that the number is over 40,000 since we started. Many of these Q&A's lead to a sale directly while others lead to sales at a later date. People ask a question get an answer are thrilled that you even responded and then come back at a later date and place an order with confidence. I can not think of a better use of one-to-one marketing then offering advice freely with no sales pitch.
Our navigation system is built with this thought in mind. "How did someone find us and what knowledge do they possess as they arrive?" At one time, over 95 percent of our visitors came from the search engines after typing 'something'. Knowing that 'something' is more valuable than any other piece of knowledge that I can think of. We were able to access our referrer log and data mine that for search terms and it confirmed what we had suspected.
People were thinking in two distinct ways. The first was they were searching on a company/manufacturer name. The second was they were searching for a type or category of tool (i.e. cordless drill, jig saw). With that knowledge we built our navigation page around those two areas. It is amazing how many people comment what an easy site we have. They found exactly what they wanted quickly and were able to order it just as quickly.
The Internet shopping experience has to at least match what is a common experience in mail order; Quick, easy and cost effective. We do sacrifice certain functions achieving this. The big one being that specials, interesting items and promotions get forced below the fold. If you think of your home page as a broadsheet newspaper, then the most important concepts of you site should be visible in the screen without scrolling. Newspapers place the most important stories above the fold and a web site should be no different. On the Coastal site, many interesting and worthwhile areas do reside below the fold. Our sales indicate that this is a very worthwhile trade-off. Put another way, we cater to those who want to buy now vs. those who might be enticed to buy later.
If you lack a shopping cart you need to get one. This should be obvious in todays Net world but I thought I would stress it again. :) It was the single best thing we did from a technology standpoint. As our site has matured we have added a number of features to the core cart program. We added affiliate tracking and a more robust freight calculation module. We can now figure freight anywhere in the world and can calculate charges to US possessions, Alaska and Hawaii and UPS air service. That might all sound simple but if you deal in commodities that are irregular, heavy and have varying weights it is much more complicated than it appears. We have spent close to 4 months implementing this feature. Next up (within 10 days) is our enhanced wishlist feature which allows people to pre-register what they want. A customer can the email their friends a unique url and those people will be presented with the list with the addtocart button fully enabled.
The Coastal site currently receives 2500 unique visits per day and has 750,000 page views per month. We process close to $10,000 in web sales daily. We answer close to 150 questions per day concerning all matters tool related. We now have close to 40,000 Q & A's on file and this summer we will launch the library built around that Q & A. It may well become the default resource for people looking for information before a purchase. Not a bad position to be in for a transaction site. We have plans to extend and leverage that knowledge base in other ways that I would rather not discuss today ;)
Several reasons that I can identify for our success which was built on a very modest budget both from a technology standpoint and a marketing standpoint. We have spent less than $10,000 on software and hosting to date and most of our Internet advertising is built around co-op funds (shared participation with our manufacturers). We most certainly were an early adapter.
Our business was built around price and selection. We built an easy site to navigate. We answer our email. We try to exceed our customers expectations on every order. If we make a mistake or if someone is not happy with the item, we do what we have to do to fix it. The post office once lost an order to a customer in Alaska. We sent a replacement second day air to replace the lost unit. The cost was $40.00 to do this. The customer happened to work for a Fortune 500 company and was so happy and pleased, he posted comments about it on that companies intranet. We could trace close to 50 orders from that $40.00 investment. That is just a wonderful return on what we now term "alternative advertising". Exceed your customers expectations and they will post good things about you somewhere on the net. This leads to links and more importantly new found respect and confidence in your ability to do what you say you will do.
Impact on our Physical World Business:
Our web success has impacted our physical business in ways that we did not think possible. In late 1996, we stopped bulk mailings of our catalog. We may well have been the first mail order business to do this (I know 750,000 is not a big number in the mail order world but that does not stop me from making the claim). It has impacted our inventory mix. When we evaluate a new line or line extension, web sales must be considered. And finally it has allowed us to make our biggest change yet; a new building. We currently operate out of a low ceiling one floor building of around 8,000 sq ft (including sales floor and warehouse). We begin our move to a 30,000 sq ft facility 16 ft clear to the ceiling next month. Web business allows us the opportunity to enhance our physical world presence. Maybe that is another first. :) The neat thing about the move is it's location....directly across the street from a Home Depot, the worlds largest tool retailer. Man that should be fun!
I follow several digests such as E-Tailers and I keep reading about the demise of B&M stores a/k/a "4-Wallers." I just don't buy into that theory one bit.
Goods move in the physical world and physical world presence is the key to Internet operations. Fulfillment is still an issue. We have agreements with several virtual stores to back end for them. We are currently developing a more robust affiliate style system then the simple url link that is prevalent today which will allow any site to offer our products as their own using their own look and feel. We simply become the fulfillment house for those products. Inventory management, efficient shipping and packing (the ability to pick and pack one) are valued commodities in this new environment.
The concept that the manufacturer will bypass it's current distribution system and back end for these types of companies is not a model I think many mfg's will purse. They may try it but in the end I think they will allow those physical world distributors who do add value at a reasonable cost the opportunity to service that business. One of our manufacturers did back end for a virtual company that we happen to fulfill for as well. After 6 months that manufacturer stopped and the business went to us. Those of us who can do that one thing well; "pick and pack one" will be very well positioned in the coming years.
Over the next 5 years, stores that control their own inventory, can ship same day and expand their offering so that you in effect become a small category killer can and will be very successful.
Over the next 10 years with the coming applications built around XML, real world retailers that get hooked into the Internet will be able to fulfill for any other site on a local basis. Regardless of where a customer buys the goods, the order is shipped or picked up (maybe all businesses end up with a drive thru option) locally. In five or ten years you may buy everything from amazon or from a yahoo portal or an aol site but in real time using XML, local store databases are tapped to check stock status. Instantaneously you are advised of who has what and if you want to pick it up on your way home or have it delivered.
XML renders the Internet of today as mere child's play. The real Internet Revolution centers around XML. All business is built on and around data. XML enables us all to access and view any database with a browser if we have permission. The ramifications of this are truly astonishing for every business and for every consumer. XML is a standard for transmitting, viewing and altering data that resides within databases. An example of this in action would be a customer at the Coastal site inquiring about the availability of an item. We first check our inventory to see if we have it. If we do not we use XML to query the manufacturers inventory to see if they have it.
We then tell the user availability, freight and a delivery time. If the customer places the order, we use XML to issue a purchase order to the manufacturer and give the customer an order number, tracking info and complete the transfer of funds. The possible uses of XML are unlimited and the implementation of these standards should provide all of us with plenty to think about and ponder.
Again I would like to thank George for this opportunity. To all of you fellow E-Tailors thanks for all the postings and advice. I read every issue and always come away with something of value for our business. Let's face it, most of us make this up as we go (I know I do). We react, we learn and we create. It is a wonderful time to be involved in this business. You will be able to tell your Grandkids about the beginnings of the Internet as we know it (listen Mosaic is like the Big Bang, what happened before it almost doesn't matter) and they will be amazed. To have sat behind this desk and this screen and watched the evolving process of growth for the past 4+ years has been more enjoyable than anything I have done before.
Director MIS/CIS a/k/a Web Guy
Coastal Tool & Supply
248 Sisson Ave
Hartford, CT 06105 USA
Telephone 860-233-8213 **** Fax 860-233-6295
Toll Free 1-877-551-8665 **** E-Mail: sales(at)coastaltool.com