LANCASTER COUNTY, PA - It is a growing trend, one that is helping to save some independent Lancaster businesses and is becoming a marketing tool for others.
"There are 75 billion e-commerce transactions a year in the United States," said Joel A. Kline, assistant professor of business and economics at Lebanon Valley College. "E-commerce is growing, not in leaps and bounds, but at 5 to 25 percent annually. Local owner-operated retail stores are part of this trend."
The Internet changed the Book Haven's business. For 24 years, the store that sold used and rare books on Prince Street in Lancaster relied on walk-in business from dealers and collectors from all over the world. As these clients began to shop worldwide on the Internet, owner Kinsey Baker noticed "an amazing drop" in walk-in sales.
In 1996, he placed the inventory online. As online sales grew and walk-in customers dwindled, he and his wife, Kelly, co-owner, moved the store to the carriage house in back of their home on Marietta Avenue in 1999.
Today, 75 to 80 percent of their business is online, he said. They have maybe two to 10 "live" people a day.
Baker said he sees pluses and minuses in the online world.
"It has turned antiquarian book selling into what everyone dreams of: the ultimate connection between buyer and seller. It is capitalism at its best, the law of supply and demand."
On the downside, that law of supply and demand has hurt the smaller bookseller. For example, a copy of Ellis and Evans' History of Lancaster County, which brings a good price in Lancaster County, might be found for a bargain in a bookstore in Maine. But when both prices go online, the Lancaster price has to come down to match that of the one in Maine. The value of inventory can shrink overnight.
Another downside is the lack of human contact. In contrast to some virtual bookstores that consist only of a name and Web address, The Book Haven is a real bookstore, with wall-to-ceiling books housed in antique bookshelves that fill three stories of the carriage house. Baker said some people prefer to visit bookstores because it is still fun to walk around. He finds online work is more business than pleasure.
Happy and profitable
For Angry, Young and Poor, its thriving online sales now account for 90 to 95 percent of its niche business, co-owner John Shuba said. The store features punk rock compact discs, fashion and accessories. The owners discovered that their customers came from small towns and wanted the same merchandise that could only be found in New York, Philadelphia or other large cities.
In the world of punk rock, many items are produced in small quantities in far away places, and AYP gathered them together. AYP online customers, ages mainly from 15 to 25, buy compact discs, T-shirts, spikes, jewelry, pins, patches, posters and a rainbow spectrum of hair dye.
The customers come from American towns "whose names are not instantly recognizable," said Shuba, as well as from Europe, Israel and Japan. The average order is $40, and in 2003 those sales grossed nearly $2 million.
The sales at their first retail store on Prince Street were decent, Shuba said. In 1997, they opened their first Web site. In 1999, John and Elizabeth Shuba and Jeff and Andrea Anderson bought the business from a previous partner, Luke Bunting. They moved to 356 W. Orange St. several months ago and have six full-time employees. There is a retail store downstairs and order filling upstairs.
In spite of the success of their online business, Shuba and Anderson like the identity that retail gives them.
"Punk rock is kind of a weird thing," said Shuba. "A lot of customers are looking for something with an amateur do-it-yourself appeal but want professional service and operations. It's a weird path to walk."
Reversing fields
Another niche market almost reverses the AYP figures. The Era Ski and Bike Shop sells high-end, imported bicycles for professional-level riders, but only 10 per cent of its business comes from online sales. Ninety percent of its business is from walk-in customers.
Nevertheless, brothers and partners Greg and Todd Kreider consider their online site an important tool because they are competing nationally.
"We have customers from Maryland, Virginia, New Jersey and New York City," Greg Kreider said. "They get the information they need online and then come to the store. If you're going to drop $4,000 for a bike, you need hands-on."
The online sales are mostly clothing, shoes and small parts with an average sale of about $150 to $200.
The same philosophy was true in the world of jewelry, where more than 40 jewelers operate retail stores in the Lancaster area, but only six have Web sites in the yellow pages.
"Jewelry is so personal and visual," said Josephine Miller, owner of Brent L. Miller Jewelers and Goldsmiths. "People enjoy coming in to celebrate special times." The 25-year-old business with stores in downtown Lancaster and Chelsea Square, opened its Web site 10 years ago as a marketing tool. As with the upscale bicycles, Miller found that clients used their site mainly for research before they came in. One client from Lebanon had surfed seven jewelry Web sites hunting for a one- carat "fancy yellow radiant diamond in a platinum mounting."
After corresponding, the customer came in to see the ring before he bought it.
"It only took five minutes to make the sale," Miller said. She said less than 20 percent of their sales comes from the Internet. But it is still a good marketing tool. Asked for the average price per Internet sale, Miller recalled a customer from Arizona who ordered half a dozen gold roses, sight unseen from their Web site, at $70 per rose to decorate his Christmas table.
Different challenges
The world of health care has its own challenges. Ganse Apothecary, an independent pharmacy at 355 W. King St., has a Web site where clients can renew prescriptions and order over-the-counter items, such as aspirin. General manager Jeremy Ganse, son of owner Gerry Ganse, sees a future where he can put people's health information in their homes and make it possible for individuals to see the profile of their prescriptions and what they can and can't refill.
A major consideration for that vision is the protection of health information and the need to abide by increased scrutiny and regulations.
The present service for prescription renewals and over-the counter items began in 2001. The traditional walk-in clients are 90 percent of the business, with 10 percent being online. Ganse does not see online sales replacing personal service at the pharmacy, which is in its 35th year.
"We will never have an automated answering machine during business hours," he said.
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