Some dealers say they are not able to compete with the big-box stores online, so, they ask, “Why bother?” Brick-and-mortar stores have a distinct advantage over Web sites because they are ready, willing and able to provide customers with detailed information, better service and a hands-on experience with the product in which they’re interested.

Studies show that it’s not always about price when people search for products online. Many are looking for information about the item. This would include products details, specifications, videos and images. Others look for reviews where they can read about shopping experiences and testimonials for the product or store. In fact, more than 20% of shoppers on your sales floor actually visit your Web site during their visit.
Getting customers into your store is an ongoing challenge. Your biggest draw is having products on display, especially those that can be touched and played. This provides you with a competitive edge. Teaming that up with reliable, detailed information and excellent customer service is the one-two punch that knocks many online competitors out of the ring.

The key to this is your unique ability to establish yourself as an authority figure…someone who can be counted on to provide accurate and helpful information. Reliable advice goes a long way, and customers will tell all their friends about their shopping experience with you. Doesn’t it make sense to create a culture where all your customers would benefit from your solid advice and shared experiences?
The Internet is constantly evolving with new ways of motivating customers to take action. One interesting development is the meteoric rise of “authority Web sites.” They tend to rank better in the search engines, attract more traffic, and generate more leads and sales for the

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Promoting a vacant Facebook page is kind of like running an empty pizza parlor. You might have the best pizza in town, but, if no one comes in to eat, what’s the point? The same holds true for your Facebook fan page. Great content will go to waste without fans to follow, enjoy and take action on your posts.

If you plan to use Facebook to market your store, consider using the Facebook fan page feature. It gives you a free place to promote your brand, including your logo, news and events, unique content and more. You can highlight what matters most every week on the top of your fan page so people know what’s important, and you can see and manage everything in one place.

Many music dealers are already using Facebook and, based on their feedback, they’re getting mixed results. The fan page is different from the typical profile page. The main difference is there is no limit to how many fans you can have.

Getting 1,000 fans to “like” your Facebook fan page may seem daunting and you may feel intimidated by that number. Turn it into a positive and make it your first milestone! Once you achieve 1,000 fans, you will be able to place special “1,000 Likes” graphics on your page that visitors will see.

The following tips will help you build your fan base and start seeing the positive results that a well-visited Facebook fan page can provide to music retailers.

Tip #1   (continue reading)

By David Hall, Vice President Sales and Marketing, Cutting-Edge Solutions

The arrival of 2013 brings a fresh start with wonderful possibilities. Many people make resolutions that focus on personal goals, such as losing weight, quitting smoking, etc. Although it’s a great time to take steps to improve the quality of your life, why not also take the same approach to improve your online business?
Whether you’re selling online or not, it’s crucial to engage with more people and streamline how they communicate with, and buy from, you. Now is the time to assess how successful the previous year was for your online presence and to set goals to improve your effectiveness. Follow these e-commerce resolutions to guide you through this process.

Resolution 1:  
Assess Your Current Web Site
Does your Web site portray your business accurately? What does it do right? What is wrong with it? Does it look dated? In addition to asking yourself these questions, look to others for their assessment. Collect their responses and discuss the reasons for their answers. Make a concise, manageable list of the items on which you absolutely must work.

Resolution 2: 
Tell A Better Story
Use your Web site as a platform to share what makes your store special. Develop a page for each department and update it monthly. Create videos to connect to, and communicate with, your visitors in a more personal manner. Make them short and to the point, and don’t use the auto-play function when the page is loaded. This will cause most people to close their browser. Show potential customers what you do, how you do it and the passion you have for helping to create music makers.

Resolution 3:(continue reading)

By David Hall, Vice President Sales and Marketing, Cutting-Edge Solutions

The facts are in, and it’s good news for brick-and-mortar stores. According to a new study by Deloitte, consumers who use smartphones when out shopping are 14 percent more likely to make a purchase while in the store than those without them.
Deloitte’s study, “The Mobile Influence Factor in Retail Sales,” takes a second look at the common misconception that consumers are increasingly going into brick-and-mortar stores, getting their hands on items they’re shopping for and then using their smartphones to buy these items from competitors, online or elsewhere.

According to Deloitte’s Alison Paul, “Mobile devices’ influence on retail store sales has passed the rate at which consumers purchase through their devices today. Consumers’ store-related mobile activities are contributing to, not taking away from, in-store sales.” Roughly half (48 percent) of all smartphone users surveyed say their phones have influenced their decision to buy an item in a physical store. Overall, the consultant estimates smartphones will influence 19 percent ($689 million) of U.S. retail sales by 2016.
Mobile marketing and technology company Vibes released its first study, the “Vibes Mobile Consumer Report.” More than 1,000 smartphone users were surveyed, and they found that 90 percent of shoppers carry their smartphones with them into stores. A whopping 84 percent use their devices to research products to locate product information and the best deal.

Both reports clearly indicate that consumers are relying more on their smartphones to help validate their purchases, and that the presence of a smartphone in a shopper’s hands can be an aid to closing the sale. In the Vibes report, 48 percent of smartphone users said that they felt better about their purchase after doing some in-store research and shopping around on their phones. Researching the product ahead of the purchase creates a feeling of confidence and helps to eliminate buyer’s remorse.

In today’s music retail climate, informed consumers make educated purchases. Remember that it’s not always a price issue; it’s essential to help facilitate getting the right information into your customer’s hands as quickly and easily as possible. Free QR code scanners represent one of the best mobile applications available.

A QR (Quick Response) is a matrix code created by Japanese corporation Denso-Wave. It is a two-dimensional bar code that can store up to 7kB of data, such as plain text, specific URLs, contact details, geographic information, images, PDF files, links to videos and other information. Best of all, they are free to create and use.

There are many free QR code generators online, and a simple search will provide numerous options.

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It’s interesting to see how smartphone use has affected sales for brick-and-mortar dealers. Many feel that it’s starting to hurt their businesses. Customers come into your store, examine your products, play your instruments and then shop online for cheaper prices. But for every negative, there’s a positive, and I feel that this trend creates numerous opportunities for music retailers.

As a follow-up to last month’s “Showrooming” article, I thought it would be helpful to further analyze smartphone usage and provide strategies for adapting your business to take advantage of this growing resource.

This past March, Frank A. Magid Associates published the results of a survey: “What consumers do each week on their smartphones.” Although shopping is not a consumer’s favorite activity, 15 million say they make a purchase via their mobile phone at least weekly. That’s a substantial amount of shoppers, which presents amazing sales potential for music retailers.

99.5 Percent Access Content/Information
Consumers are using their smartphones to collect information about the products they are considering purchasing. It’s not always a price issue. They are looking for reviews, as well as validation that they are making the right choices. Train your sales staff to spot smartphone users and provide them with valuable and relevant information about the product they’re considering. Use this interaction as an opportunity to inform them of the services you provide and reinforce the benefits of buying in your store.

63.1 Percent Access the Internet
That’s right…they’re surfing the Web right from your sales floor. Don’t be paranoid about this. Studies show that 17 percent of shoppers are visiting your Web site while in your store. Make it easy for them to find more information about the products they’re considering. Create QR codes for products and post them so they can be scanned and immediately linked to your Web site.

62.1 Percent Check E-mail
For an independent retailer, e-mail marketing is a cost-effective way to build relationships that drive success. Although it’s inexpensive to manage, the main advantage of e-mail marketing is actually not the cost: It’s simply the most effective way to stay in touch with the majority of your customers. It allows you to multiply yourself and keep in contact with people who are already the most likely to buy from you.

Encourage customers to sign up for your newsletters, and get into the habit of sending regular e-mails. Repetition is the key to successful e-mail marketing. Make sure that you include interesting content whenever possible.

51.4 Percent Use A Social Network
Constantly look for ways that you can add value to your social network presence. Perhaps you’re uploading video lessons. This is a great way to build repeat traffic. By carefully planning the lesson content, you could effectively seed your lesson program for years to come with a continual stream of new students and supportive parents. Film the progress of a select few, and then use that content to inspire prospective students and parents.

Create a video library of people you have interviewed within your online community and share their stories of how music has touched their lives. How about posting a detailed video diary of a complete guitar restoration? The key to engaging people and bringing them back is in those uncovered nuggets of information (many right under your nose) that your network participants will find interesting.

49.2 Percent Listen to Music
Although this might not be a preferred activity while standing on your sales floor, it’s important to remind your customers that you are the go-to resource in helping them create music. Emphasize your lesson programs, clinics, new product demonstrations and support. Set up a monitor and play videos of your customer testimonials, recitals, band concerts, etc.

46 Percent Play Games
This is another activity that might not be something the average smartphone user is doing on your sales floor. However, why not find a way to reward customers who play music-related games? Sponsor an in-store tournament and reward the top finishers with fabulous prizes. Find ways to reward all participants for their involvement. Offer free pizza and soda, a free set of strings, free drumsticks, etc. Enter everyone in a larger contest for his or her chance to win something special. Run the tournament over a period of weeks or months and create a weekly social event in your store. Bars do this with softball leagues. So, why not music stores with Guitar Hero?

41.7 Percent Download And Use Apps
Create a list of recommended music apps and post it in your store. Focus on the two or three that can inspire users to become music makers, and then run clinics. DJ apps are especially popular. Run clinics for getting the most out of these apps and up sell to DJ gear. Smart retailers constantly find ways to tie apps into the products and services they provide.

15 Percent Make Purchases
Overall, Web surfing from a laptop or desktop computer still dominates as the preferred vehicle for online shopping. However, 15 percent of all smartphone users make at least one purchase per week. This interesting statistic presents unique opportunities for music retailers.

99.5 percent of smartphone users are looking for information, and 15 percent make weekly purchases. This might indicate that impulse buys are on the rise. Another interpretation is that consumers are finding the information they need to validate their buying decisions and are more motivated to complete the purchase on the spot.
One demographic that you can immediately target are parents with kids in school. According to Accenture, in a July 2011 survey of 624 online adults with children in school, price and convenience lead parents to shop online.

Why not make it easy for parents to buy their kids’ music-related school supplies online? Create and post lists of required music supplies with QR codes for each school. This can link right to your Web site and streamline the purchase.

Smartphones can actually help you close sales. Shoppers feel better about their purchasing decisions after they receive validation. They need to feel confident before placing their trust in you. If you make it easy for people to get the information they need to make good buying decisions, you’ll earn their business.

David Hall is Vice President – Sales & Marketing for Cutting-Edge Solutions. Their eCommerce products, The Generator and Pro-Active Websites, are utilized by leading vendors and retailers within the music products industry. Contact him at dhall@pro-activewebsites.com and visit him at NAMM Booth #4323.

By David Hall, Vice President Sales and Marketing, Cutting-Edge Solutions

A customer with a smartphone in hand walks into your store, studies your wall of guitars, plays a couple, snaps some pictures, scans a few barcodes and then leaves without a word. What was that? What just happened here? It feels like you’ve just become the victim of a “drive by”! Nope…you’ve been “showroomed”!

Every day, “showrooming” is becoming more commonplace for brick-and-mortar stores, and many feel that it’s starting to hurt their business. Customers come into your store, examine your products, play your instruments and then shop online for cheaper prices.

Many retailers feel that they’re making it easier for online retailers to make sales. They invest in their building, advertise to bring in shoppers, stock the store, hire the staff and demonstrate the instrument, only to have the customer walk out and buy it online. Every smartphone owner has access to a multitude of apps that make price-comparison shopping easy; brick-and-mortar retailers are increasingly worried about this snowballing trend.

One of the biggest names in mobile price-check apps is RedLaser. Their app lets shoppers scan barcodes or perform manual searches by typing in a product’s name. They claim that the technology reads product barcodes more easily and accurately than other, competing apps, which may cut down search time. I installed the free app on my Android phone and searched for a Shure SM58 microphone. The app returned 58 online results, including eBay auctions (eBay acquired RedLaser in 2010), and listed a few independent music stores in the local results tab, too. The cheapest price displayed was $79.99; however, when clicked, it was actually for a replacement cartridge. Local results are sorted by proximity using the location (provided by your phone’s GPS), rather than by price. It took some scrolling through the listings to find the best price. Although RedLaser states that the cheapest prices are listed first, as was evident with my search, it might not show results for the exact product for which one is looking.

“Smartphones with their Internet capabilities have made the Web portable, creating informed and empowered consumers,” said Matt Cava, Director of Mobile Solutions for Vibes, a mobile marketing and technology company, which released its first study, the “Vibes Mobile Consumer Report.” They surveyed 1,006 smartphone users and found that 90 percent of shoppers carry their smartphones with them into stores, and 84 percent use their devices to research products to ensure they are getting the product information they want and the best deal.

There’s no doubt that the use of smartphones for comparison shopping is accelerating and the diversion of sales from traditional stores to e-commerce Web sites via showrooming could lead to long-range changes in music retailing. Small stores, especially independent music dealers, could be forced out of business, taking with them both jobs and tax revenues.

National retailers are being hit hard by the trend. Cava said, “Showrooming occurs more frequently when consumers are considering larger, more expensive purchases, such as electronics and furniture. The larger chains—while trying to curb the practice—are merging in-store and online businesses for seamless, quicker and cheaper transactions, without shipping fees.”

The Vibes report revealed that it’s not always about who is selling the product for the best price. Almost a third of the respondents used their smartphones to search for in-depth product details and, more importantly, reviews of the item. Consumers need to feel confident about making the purchase, and they turn to the Internet in search of validation of their decisions.

The report contains other startling facts. They found that 29 percent of shoppers who showroomed ended up going to that store’s Web site later to make their purchases. Some 33 percent said they visited a competitor’s Web site while in the store, 27 percent were scanning codes and 17 percent went to that store’s own Web site, searching for more product information.

Retailers today are distinguishing between brick-and-mortar and online experiences, Vibes says, but consumers are not. It’s not all doom and gloom for brick-and-mortar stores, though. There are ways to combat showrooming and to keep customers from buying elsewhere. Showrooming can be good for your business if you know how to use it in your favor.

Music retailers need to enhance their efforts and improve the flow of information, as well as the emotional connection with the store. When consumers are in your store, a decent Web site appears to be a critical part of the shopping experience. Remember, almost a third of your shoppers are looking for more product information and want to validate their purchasing decisions.

Here are some tips to help you use showrooming to your advantage:

• Train your sales staff to observe “showrooming” behavior and approach customers proactively with valuable and relevant information. Tell the customer about the services you provide and list the benefits of buying in the store.
• Use QR codes for your key products. You can create them for free. Almost a third of shoppers are going to your Web site to get more information about the item. Make it easy by creating a QR code that they can scan to be taken immediately to your Web site.
• Hand out flyers (with QR codes) that reinforce the benefits of buying from your store. Remember, a third of respondents are looking for ways to validate their purchases, and help them feel confident in buying from you.
• Improve your in-store signage. List the product’s features on a card and have it prominently displayed with the item. Include your QR code and invite people to scan it.
• Use customer testimonials to help build confidence. Let happy customers help you sell your products. Use QR codes that link to your YouTube testimonial videos.
• Create a video loop of customer testimonials and have it play in your store. This will help build confidence and provide immediate validation for every customer who walks through the door.

The presence of a smartphone in a shopper’s hands can aid you in closing the sale. In the Vibes report, 48 percent of showrooming shoppers said that they felt better about their purchase after doing some in-store research and shopping around on their phones. Researching the product ahead of the purchase creates a feeling of confidence and helps to eliminate buyer’s remorse. Consumers are relying more on their smartphones to help validate their purchases. If you use these ideas to help your customers get the information they need to make good buying decisions, you’ll earn their business and their trust.

David Hall is Vice President – Sales & Marketing for Cutting-Edge Solutions. Its eCommerce products, The Generator and Pro-Active Websites, are utilized by leading vendors and retailers within the music products industry. Contact him at dhall@pro-activewebsites.com.

By David Hall, Vice President Sales and Marketing, Cutting-Edge Solutions

For many online shoppers, a free-shipping offer is the holy grail of great deals. Forget 10 percent off an item or a coupon code for an instant or future discount: Free shipping is what makes people click the “Add to Cart” button.

Sounds like a great deal, doesn’t it? Well, not so fast. The truth of the matter is that somebody is paying for shipping. Either the retailer is eating the cost or the customer is paying a higher price. In many cases, it’s a little of both.

Maybe you’ve been wrestling with this concept and are uncertain whether to incorporate free shipping into your Web site marketing plan. Many online retailers are hesitant to add on another expense that eats away at their bottom line. Some have their shipping costs set to allow a small profit. Many feel that decreasing this profit will have a negative effect on their customer support or force a reduction of other services.

Others feel that free shipping is expected by online shoppers and, thus, feel forced into offering it to even the playing field and remain competitive.

This ongoing debate is one of the most aggravating and frustrating topics with which online retailers wrestle. To help determine the right path for your business, here is a closer look at the pros and cons of free shipping.

Pros

• The customer feels more confident by knowing the total price he or she will pay up-front by picking the free-shipping method.
• Can help to build extra visibility of the Web site.
• Less abandoned shopping carts.
• Advertising free shipping might generate more traffic to the Web site.
• Could help eBay sellers earn higher rankings due to eBay’s preferential placement algorithm.
• Can help build referrals through word of mouth and social media praise.

Cons

• Product prices will be higher.
• Added expense for the retailer and might cause a reduction of other services.
• Free shipping stops customers from coming into the store and eliminates impulse buys.
• Shoppers might not enter the checkout stage to see what shipping and final costs would be.

Should online retailers try to compete with Web sites that offer free shipping? Debra Ellis, President at Wilson & Ellis Consulting, doesn’t think so. “Merchants are already reticent to invest in improving customer service, because operations are considered an expense,” she said. Retailers who offer free shipping usually cut back on other services to cover the costs. “Shipping income and costs are typically allocated to the operational budget. In the past, an efficient operation could be a profit center, but not anymore,” she added.

We all realize that there is no such thing as free shipping. It’s the second-largest cost for most retailers, with labor being number one. Although offering it might lead to higher Web site traffic, it’s important to remember that the rest of a positive buying experience has to be securely in place. When a consumer sees that free shipping is available, he or she fully expects to proceed through the shopping cart with no surprises. Some online retailers add a handling charge to the order. This ploy is a surefire way for consumers to abandon the shopping cart. When you advertise free shipping on the Web site, also state “no handling charges.” This will add credibility from the outset of the sale.

It’s a good idea to add a page to the Web site that clearly explains your free-shipping policy. You can add comments regarding heavy and oversized items, detail any minimum requirements to qualify for the offer and explain your policy regarding returns. Be careful…some customers who make purchases with free shipping might expect you to cover the shipping costs for returns. Clearly state your policy regarding returns and who pays for the shipping back.

Strategies To Consider
Many retailers are wary to offer free shipping but realize that they might be missing opportunities. Here are a few strategies to consider:

• Set a higher qualifying minimum order. This will allow you to make additional profit that can cover the costs.
• Only include free shipping on selected items. This is a great way to benefit from Web searches and still be able to offer the extra service.
• Work with your vendors to get special pricing on selected products or brands and promote them as free-shipping items on your Web site.
• Offer free shipping at select times of the year and use specific deadlines. For example, “Place your holiday order before December 1 and get free shipping on your entire order!”
• Do not offer the free-shipping promo too often. It would “train” your customers to wait until the next promo is running to make their purchases.
• Stay on top of all communications regarding the status of the order, tracking information, etc. Customers appreciate the extra service, and it will save you time and labor costs

Start A Free-Shipping Club
Free-shipping clubs require members to pay money upfront to receive free shipping on their orders for the year or designated period of time. Although this might sound suspicious or be perceived as another way to milk more money out of customers, SmartMon ey.com says “not so fast!” Believe it or not, these clubs can be a good deal.

The consumer will have to weigh the benefits and determine if the membership makes financial sense for his or her purchases. Many large online retailers offer some sort of free-shipping club membership and the cost averages $79.95 per year. Besides the free shipping, sites offer members exclusive deals and incentives that they wouldn’t get otherwise. Promoting the added value of extra benefits will justify the price of the membership and help you sign people up.

The Bottom Line
Shipping is expensive and somebody is going to pay for it. Free shipping can build traffic and repeat business if costs can be managed. Establishing a free-shipping club could be the answer to build sales in a controlled environment. After you do the math, I’m sure you’ll see that this is an opportunity for you to win in the free-shipping game.

David Hall is Vice President – Sales & Marketing for Cutting-Edge Solutions. Its eCommerce products, The Generator and Pro-Active Websites, are utilized by leading vendors and retailers within the music products industry. Contact him at dhall@pro-activewebsites.com.

David Hall w/ Steve Dollinger, Music Solutions & Bill Walzak, Cutting-Edge Solutions.

By David Hall, Vice President Sales and Marketing, Cutting-Edge Solutions

The Internet takes tax-free shopping to a new level. Shopping without that added out-of-pocket expense has become an effective motivator to influence customers away from their favorite brick-and-mortar music stores. But contrary to what you might hear, some Internet sales are subject to sales tax. Even when a Web site doesn’t collect sales tax, consumers might actually be responsible for remitting any unpaid sales tax for their online purchases directly to their state.

If an online retailer has a physical presence, such as a store, business office or warehouse, in a particular state, it must collect sales tax from customers in that state. No physical presence, no taxes. This rule is derived from a 1992 Supreme Court decision, which held that mail-order merchants did not need to collect sales taxes for sales into states where they did not have a physical presence.

For example, let’s say “Dan” is passionate about unusual ukuleles, but can’t find them in New York, his home state. So, he orders his ukuleles and supplies online from a music retailer in Wisconsin that specializes in ukuleles and unique acoustic instruments. The retailer has all its facilities in Wisconsin and collects and processes payments there. In this scenario, Dan does not have to pay state sales tax (neither New York nor Wisconsin) for his purchases.

A few months later, the retailer’s business is booming and it decides to open a second location in New York. Dan continues to order his instruments and accessories from the headquarters in Wisconsin, but, because of this new physical location, he must now pay New York sales tax.

As Internet sales initially took their foothold in the retail landscape, mass merchants with local stores sold their products tax-free over the Internet, essentially skirting the tax-collection issue. Today, influence from “support your local business” initiatives, lawsuits by several states and pressure from the Streamlined Sales Tax Project (a group comprised of states that support the Streamlined Sales & Use Tax Agreement) have ended that practice.

When consumers are required to pay tax directly to the state, it is referred to as “use” tax rather than sales tax. The only difference between use tax and sales tax is who—the seller or the buyer—pays the money to the state. Ideally, use taxes are intended to make sure that the state collects revenue on every taxable item that is purchased within its jurisdiction. Unfortunately, collecting use tax on smaller purchases is very difficult and is causing states to focus on the greater potential for revenue from sales of big-ticket items that require licenses, such as automobiles, motorcycles and boats.

Sounds messy, right? That might be changing. With so many states looking to scrape together as many tax dollars as they can, many are reevaluating their attitude toward collecting use taxes. For example, New York State has added a line to income tax returns requiring all residents to calculate how much they should pay on Internet, mail order or out-of-state purchases. California has begun a campaign to educate taxpayers on what’s owed, as well.

Now that the stage is set and more states are taking action to collect tax, the real question is where this will lead. Simplifying Sales Tax initiatives are popping up all around the country. For decades, state governments have struggled with the challenges of collecting sales and use taxes on purchases from out-of-state retailers. It began with mail-order catalogs and telephone sales, and is snowballing with online transactions. And, proposals to simplify sales tax systems are not really all that simple.

The Streamlined Sales Tax Project (SSTP) was started as a result of a 1992 U.S. Supreme Court ruling for a catalog business that sold office supplies, long before eCommerce had arrived. This ruling affirmed a 1967 decision that state sales tax systems are so complex that no retailer, whether storefront, catalog or online, can be required to collect sales tax for states in which they have no physical presence. As a result, states had to either dramatically simplify their sales tax systems or persuade Congress to force these types of retailers to collect sales taxes, regardless of how complicated it would be.

States started asking for more taxing authority as eCommerce sales began ramping up in the ’90s, and then pushed harder as the U.S. economy slowed and spending outpaced revenues. State tax officials blamed eCommerce for their fiscal problems and warned of huge future tax losses based on eCommerce growth forecasts.

Unfortunately, much of their information is based purely on speculation. Certain states, big-box retailers and other proponents of the SSTP continue to use revenue-loss estimates that just don’t add up. Some cite a 2004 University of Tennessee study that blames eCommerce for more than $22 billion in lost sales tax during 2005. This figure was half of what the same researchers had forecast in a 2001 study. Their lower estimate recognized greater use-tax compliance by businesses and the growing trend where big chains like Wal-Mart and Home Depot already collect sales tax on their online sales.

Surprisingly, the $22 billion estimate from the University of Tennessee is four times greater than what the loss possibly could be, according to retail surveys by the U.S. Department of Commerce. Census Bureau surveys of 11,000 retailers show total retail eCommerce in 2005 at $70 billion. This would generate approximately $5 billion in total sales tax. Even if none of this sales tax was collected, the loss would be just one-quarter of the university’s estimates.

Confusion is a powerful weapon, and overly aggressive estimates from a variety of sources are only complicating whether Congress should enact the provisions of the SSTP. Some large, multi-channel retailers are already required to collect taxes for their online sales. However, it would take a congressional mandate to force all Internet retailers to collect sales taxes and remit them to the respective states. Lobbyists are pressuring lawmakers in Washington for this new level of taxation, citing the progress of the SSTP and the urgency of states with financial hardships.

Where does this all lead? In my opinion, the SSTP would generate revenue that’s just a fraction of these tax estimates. Add to this the overwhelming compliance costs, especially for independent retailers who need to sell online to compete, and we will all be faced with higher prices.

There are other ideas being presented, including helping states to continue their own efforts to simplify their individual tax codes. There should be more focus on ways to enforce tax compliance by abusers and ensure that those who are liable now under the current tax laws are compliant. Please contact your state legislators and tell them only to support tax changes that minimize the extra accounting burdens this current path is leading toward.

The Internet Retailer Conference

By David Hall, Vice President Sales and Marketing, Cutting-Edge Solutions

In early June, Cutting-Edge Solutions’ Bill Walzak and I exhibited at the Internet Retailers Conference and Exhibition in Chicago (IRCE 2012). It was the first time the company exhibited at this show. In fact, it was our first trade show outside of the music products industry. The experience was an eye-opening one!

The IRCE is a gathering of 8,000 Web developers, programmers, eCommerce retailers and various entrepreneurs, making IRCE 2012 the largest eCommerce-focused conference ever (18.3 percent increase over last year according to Internet Retailer Magazine, host of the event).

The IRCE Exhibit Hall also set a record, with 564 companies presenting all manner of eCommerce technologies and services. People who attend this show all have a connection to eCommerce, whether it’s sales, fulfillment, shipping, Web development, system management or support.

The four-day conference featured speakers from many high-level eCommerce companies, including William Lynch Jr. (CEO of Barnes & Noble), Joel Anderson (President and CEO of Walmart.com, U.S.) and Alexis Maybank (Co-Founder and Chief Strategy Officer for Gilt Groupe).

With eCommerce growing at 16.1 percent last year, according to the U.S. Department of Commerce, IRCE attendees were mostly upbeat, despite concerns about the global economy. This year’s theme was “Connecting with the 21st Century Consumer.” As mentioned on the conference Web site, today’s consumer “is a pro in finding, pricing and comparing products online, and Web sites that fall short of the high satisfaction bar they set are abandoned and forgotten.”

For almost a decade, the industry has known us as Pro-Active Websites. That’s actually the brand name of the eCommerce platform we sell to retailers. Our parent company is Cutting-Edge Solutions. We specialize in eCommerce solutions for suppliers and retailers that simultaneously work together. Our system repurposes product information into multiple sales, marketing and publishing channels, maximizing the power of eCommerce communication and product information management. We transform advanced technology into a simple tool that improves the promotion of products and increases sales across multiple channels.

Now that I have had time to digest the enormity of the show, a few key areas stood out as common topics of interest among many attendees.

Multi-Channel Commerce: Retailers and vendors have many channels available for the promotion and sale of their products. The lines used to be very clear between retail and wholesale. However, more vendors are taking matters into their own hands in finding new and innovative ways to reach and influence consumers. Social media, mobile marketing, affiliate relationships, B2B/B2C selling, print and digital catalog creation, and more are growing concerns for all sides of the selling cycle.

New for 2012, the IRCE introduced the eCommerce Platform Pavilion: a dedicated area on the show floor designed to give retailers access to companies that can enhance their current multi-channel needs and help position them for the future. Some of the new developments inspiring e-retailers to do a better job include SMS-based order confirmations; in-package QR codes for post-purchase product info; shipping labels with ads; and codes to reward repeat buyers.

Free Shipping: Free shipping is still one of the hottest trends in eCommerce. One session examined walking the “free-shipping tightrope” and discussed ways for retailers to offer it without cutting into their profit margins. Among the ideas were limiting free shipping to items that make financial sense and working with your drop-ship providers to find cost savings during the pick, pack and ship process.

Mobile Commerce: With the number of mobile devices growing at record rates, more consumers are using them to check prices. I have heard dealers report that roughly 25 percent of shoppers will check prices online while in their stores. According to Branding Brand, smartphone adoption is growing so rapidly that, by the year 2014, more than half of 49.6 billion visits to the Internet Retailer Top 500 e-retailers will stem from smartphones.

Creating Repeat Visits: It’s not always about price. Innovative e-retailers are finding ways to draw and keep customers coming back to their Web sites. One way is to attract them with gaming options via your brand’s social media accounts. Fanplyr is an upstart company that engages gamers who visit your site. Choose the game you want to offer and it rewards customers with coupons and loyalty incentives, while providing you with analytics.

Use More Product Demo Videos: People like to hear what real people have to say, and homegrown product demo videos are your competitive edge on the Internet. If you do just one thing to improve your Web site this year, it should be to focus on creating as many product demo videos as possible. Start with your 25 bestselling products, and then write a script lasting about two minutes for each. Many musicians are improvisers and can work from an outline. Set the stage with a pleasant and clean-looking area and press record. Let your personality shine through. It might be difficult at first, but you will get better as you do more videos. Remember to have a call to action at the end. Consider offering the customer a special discount code at the end of the video.

NAMM runs great trade shows and it was interesting to compare the two. Just as NAMM has the ability to draw the biggest names in the music products industry, the IRCE pulls in the largest brands in eCommerce. They did an excellent job of organizing and running the show. Their sessions were interesting, informative and well attended.

Exhibiting at the IRCE gave us the opportunity to venture out into new territory. We learned a lot about the state of eCommerce. Whether you sell shoes or guitars, retailers in all segments face the same challenges online. The show emphasized the importance of technology in connecting with, and keeping, customers. It validated that managing technology can be rewarding and have a profound effect on your customers’ experience and loyalty. When embraced, prioritized and acted upon, it can be an invaluable tool to your eCommerce success.

By David Hall, Vice President Sales and Marketing, Pro-Active Websites

You’ve probably seen it at your local grocery store: a rogue shopping cart, tucked out of the way, partially filled with items but abandoned by a fellow shopper. Although this might be an uncommon occurrence in the brick-and-mortar world, in eCommerce, it’s all too familiar.
It’s frustrating for online retailers to see abandoned carts. These incomplete transactions are an expensive reminder of the hard work, time and resources they have put into their Web sites only to fail at closing the sale.

With all you do to bring customers to your Web site, why do so many people leave before they make a purchase? Common reasons why consumers might bail during the checkout process include

1. Shipping costs that are too high. Many online retailers offer free shipping as a way to even the playing field. You might not be able to offer lower prices than the big-box stores do; however, providing free shipping incentives certainly helps keep you in the game.
2. The customer changed his or her mind. This is a tough one, because there could be hundreds of reasons why. Take a closer look at the flow of your shopping cart to make sure you are not giving them any extra excuses to abort the sale.
3. Window shoppers. Some Web shoppers go through the checkout process as a way of comparing prices and overall value. They fill their shopping carts and proceed to the end only to abandon the sale. All they really wanted was the final price.
4. The Web site does not allow guest purchases. Some people feel uncomfortable with making online purchases and might cancel the order if they feel that you are asking for too much information. Set your shopping cart to allow guest purchases.
5. Building their wish list.Some customers go through the checkout process to “practice feeling ownership” for the items they want. Not to be confused with window-shopping, these wish list builders have already decided on what they want. They just are waiting for the right moment or trigger to complete the purchase.

What can you do to lure them back and complete the sale? New tactics are emerging across the Web that are focused on helping you reach out and earn a second chance.

Retargeting is based on analyzing the behavior of the shopper and suggesting related products automatically. Advertising specialists can provide technology that literally follows people around the Web and strategically places display ads within relevant Web sites they visit.

If you don’t have the budget to spend on this type of tactic, let’s focus on finding ways to put data from the abandoned cart to better use. Remarketing is a highly effective method built around sending a series of strategic e-mails to wayward prospects.

Knowing the reasons why consumers put the brakes on their purchase is crucial to formulating a plan of action. Creating a series of e-mails that addresses these issues is key to making this tactic work. Most experts agree that sending four timely and well-written messages, spaced out over a seven-day period, is the most effective strategy. Make sure that you monitor your bounced e-mails and remove any unsubscribed addresses quickly. If you feel the dropout rates are too high, then adjust the frequency of your e-mail cycle and extend the duration.

E-mail #1    Initial E-mail Message
Most shoppers end up buying within 24 to 72 hours, so a timely initial response is crucial. Be careful how you word this message. Some people do not want to feel like Big Brother is watching them. Use verbiage that is soft and friendly, such as, “We noticed that you recently left some great gear in your shopping cart at [your Web site]. We thought it would be helpful to send you a copy of your cart contents for future reference. Thank you for considering us for your musical needs, and please let us know what we can do to improve your shopping experience at [your Web site].” Make sure that you include all appropriate contact information. Send this message as soon as possible after the cart is abandoned.

E-mail #2    Encourage Interaction with Your Store Staff
Include verbiage in a questioning tone that encourages interaction with your store. For example: “Thank you for visiting [your Web site]. We noticed that you had placed items in your cart but did not complete the transaction. Did something go wrong? What can we do to help you? Do you need further information about these products? Please give us a call, click here to chat or send an e-mail. We’d love to help you get the gear that will get you playing and make you happy. Thank you for considering [your Web site].” Send this e-mail one day after the first message.

E-mail #3    Resell the Products Left in the Abandoned Cart
Send an e-mail with an abundance of product information. Whenever possible, send along videos of the items. If you can’t find them on YouTube or the manufacturer’s Web site, then make your own. It doesn’t have to be overly produced. In fact, when customers see that you created a quick video especially for them, they’ll be blown away by your commitment to great service. Send this e-mail five days later.

E-mail #4    Cautiously Offer a Discount
Be careful not to offer a discount right away. Price is not always the determining factor for why the sale was abandoned. Defer offering a discount until your fourth e-mail and make sure that you include an expiration date. Emphasize promotional offers, contests and upcoming events to demonstrate other value-added reasons to buy from you. Send this e-mail the day after your third e-mail. This will complete your seven-day cycle.
You’re spending considerable time, money and energy to get prospects to come to your Web site. Keep pushing to get a second chance with those who have abandoned their carts. When you are successful in acquiring these customers, it makes your first round of investment more valuable. Winning back and selling just a small percentage will make a huge impact on your bottom line.

David Hall is Vice President – Sales & Marketing for Pro-Active Websites. The company specializes in Web development and network building for dealers and vendors within the music products industry. You can visit him at Booth #320 at Summer NAMM. Contact him at dhall@pro-activewebsites.com.