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A feature article that appeared in
The E-Tailer's Digest: "Everything for the Retailer" on May 26th, 1999.

The E-Tailer's Digest --- Everything for the  Retailer
Registered: Library of Congress, Washington DC  ISSN 1522-6891
Issue #0189                            May  26, 1999
George Matyjewicz, Moderator         mailto:georgem@gapent.com
--------------------------------------------------------------
Published by:  GAP Enterprises, Ltd.  
http://www.gapent.com/etailer/
 
Please pass this issue of the ETD on to someone 
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===============================================


Table of Contents

+++ S P E C I A L   R E P O R T  +++

"Real-World Success Story"
By Todd Mogren,  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 **** mailto:sales@coastaltool.com
http://www.coastaltool.com/ind/ 
--------------------------------------------------------------

--------------------
Moderator's Comments
--------------------

Hi All:

As promised we have a special report today, as I cruise the inner
passage to Alaska.  

I want to thank Todd Mogren, Web Guy at Coastal Tool and Supply
for writing this report of Coastal's success with the Internet.
Todd is a regular contributor to E-Tailer's Digest, and Coastal
was one of the 23 companies featured in Jaclyn Easton's book
"StrikingItRich.com -- Profiles of 23 Incredibly Successful
Websites You've Probably Never Heard Of"
http://www.strikingitrich.com/ Their success is truly inspiring
and worthwhile for all list members.  I am sure you will gain
something from this report.  

And Friday we will have another special report -- from the
"Independent's Day" presentation at the National Stationery Show,
including a 90 minute question and answer session with retailers
like yourselves.  

Monday, May 31 is a holiday in the U.S. (Memorial Day) so there
will not be a digest.  The normal digest will return next
Wednesday.  It is interesting to be on a cruise without a laptop
and with  no e-mail.  major withdrawals ;-).

So let's get to today's special report, and  thanks again Todd.


George 

_______________________________________________________
George Matyjewicz,  C.M.O.  mailto:georgem@gapent.com
GAP Enterprises, Ltd.        http://www.gapent.com/
Marketing Your Web http://www.gapent.com/myweb/
Automated Press Releases http://www.gapent.com/pr/
Seminars http://www.gapent.com/seminars/
Affiliates Program:  http://www.gapent.com/gapptr/

===============================================

-----------------------------
+ SPECIAL REPORT
-----------------------------

"Real-World Success Story"
By Todd Mogren,  Director MIS/CIS a/k/a Web Guy
Coastal Tool & Supply 


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.


Quick Background


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.  


Virtual Store


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.  

We do follow a few rules.  The first and in my opinion the most
important one is the 3-click rule.  From our main navigation
page, any item can be added to the cart with 3-clicks.  No item
is below the 3-click rule.  The second rule is in between the
navigation and the item addtocart button is nothing but pure
html.  No java, javascript, shockwave, large graphics, nothing.
The site was built when 28k modems were common and it still
serves us to this day.  Even if bandwidth was unlimited for every
user, I think our design would change very little.  We have video
and some large animated gifs that help the user in deciding on a
purchase but they reside at or below the addtocart button.

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.


Site Navigation


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, jigsaw).  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.  


Shopping Carts


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.  


Our success


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!


The Future


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.


Regards,


Todd Mogren


http://www.coastaltool.com/ind/ 
Discount Power and Hand Tools
248 Sisson Ave  Hartford, CT 06105  USA
Telephone 860-233-8213  **** Fax 860-233-6295
Toll Free 1-877-551-8665  **** email sales@coastaltool.com

-----

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