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Aug 05, 2009
How To

Ecommerce Commissions for Retail Stores: 8 Strategies to Keep Independent Owners Happy

SUMMARY: Ecommerce is a tricky proposition for marketers from a corporation that also has independent retail store owners who are contractually restricted to selling in a small region. Those store owners donít want to compete with their corporate parentís website.

See how a marketer from a retail chain handled ecommerce without upsetting the brandís brick-and-mortar store owners. Includes the details of a unique commission system and a customized website design.
Kevin Keller, Online Manger, DelSol.com, and his team in the corporate office wanted to sell products online, but worried that Del Solís independent store owners would be upset by the move. Del Sol sells products that change color in the sun, and the large majority of the companyís brick-and-mortar stores are independently owned and licensed to sell products in a specific geographic area, such as popular vacation destinations.

Individual store owners were not allowed to sell products online, and did not have a hand in the corporate website, DelSol.com. However, Keller did not want to pass up the opportunity for ecommerce. They needed a system that enabled online sales without competing directly with store owners.

To make the website seem less like a competitor and more like a partner, Keller developed a system that included owners in online promotions, and gave them a portion of the siteís sales.

"I wanted them to feel like they owned a part of the website," Keller says. "We had a few stores complaining that they didnít want corporate competing with them, and this could alleviate that feeling by giving them a stake in the online presence -- not only visually but also monetarily."

Now, the majority of Del Solís stores participate in the voluntary system. The top 10% drive one online sale for every 53.5 in-store, and the top contributor drives one online sale for every 36 in-store. And the system works well enough for Kellerís team to sell online without upsetting individual store owners.

Here are eight key strategies they used to make the ecommerce venture work:

Strategy #1. Create unique Web addresses for each store

The team purchased unique URLs to associate with every Del Sol store. For example, the Del Sol store in Santa Barbara has the www.delsolsantabarbara.com address, and all other locations follow the same format.

Each of those location-specific addresses redirected visitors to the default Del Sol store at www.delsol.com. In some cases, the visitors were redirected to a page customized for the location (described below).

Strategy #2. Provide custom pages

Some Del Sol locations, such as San Antonio, had customized pages set up for visitors who typed in their specific URLs.

Del Sol San Antonioís page had the following custom features:
o Images related to San Antonio
o Message: "Welcome to Del Sol San Antonio"
o Customer service page with contact information for the San Antonio store along with contact information for online orders

To visitors, these pages looked as if they were maintained by the corresponding Del Sol location, but were part of the same website maintained by Kellerís team.

Strategy #3. Use cookies to record sales

When visitors typed in a specific Web address, the system placed a tracking cookie that designated the visitor as a customer of that location.

That way, if a user visited www.delsolsanantonio.com and later visited www.delsol.com, any sales would attributed to the San Antonio store.

Strategy #4. Collect email addresses at brick-and-mortar stores

Store owners were encouraged to collect customersí email addresses in their physical stores.

Owners then uploaded their email lists to an internal system maintained by the corporate office. The system recorded the original source of the email addresses. When a customer purchased online, the store that had "ownership" of that customerís email address was credited with the sale.

Uploaded emails also were added to Del Solís email newsletter list. Subscribers received a mix of special promotions, discounts, and information on new products.

Strategy #5. Provide commission on sales

Store owners received at least 10% of the online revenue generated from customers who had the storeís tracking cookie on their browsers, or who used an email address that the store owner previously submitted to the system.

Keller considered the 10% cut a fair number, considering that the store owners did not incur any product, shipping, fulfillment, customer service, or other overhead costs from the sale, he says.

Strategy #6. Track results with internal reporting system

The same system through which store owners uploaded their customersí email addresses also told them how much money they were generating from online sales.

"To motivate store owners to stay with the program, you better have a way that they can quickly login and say ĎOK, how much is this earning me? How much have I earned so far this year?í" Keller says.

Keller also publishes a list of the storesí ratios of online sales to in-store sales in the companyís internal newsletter. It is another way to help motivate the store owners, he says.

Strategy #7. Promote program to store owners

Keller and his team taught store owners about the program in several ways, including:
o Descriptions and reminders in the companyís internal email messages
o Descriptive mouse pads that were mailed to the stores
o Providing a full explanation of the program to new stores during the on-boarding process

Strategy #8. Adapt to problems

Although the program was designed to reduce internal conflicts, there have been a few snags.

Here are two Keller mentioned:

- Promotion conflict

Keller is responsible for Del Solís online sales, and he runs promotions to help boost his performance. Those promotions are independent of any promotions run by Del Solís physical store owners.

However, when customers walk into a Del Sol location asking about a promotion they saw online, it can cause some confusion. Keller worked to remedy this issue by using "online-only" messaging in his promotions.

- Product inventory

Del Solís brick-and-mortar stores are able to customize their inventory as they see fit. A Del Sol store in Alaska, for instance, has a wider selection of sweatshirts than a Del Sol in the tropics.

Del Solís online store only carries one sweatshirt, because online sales in that category do not justify broadening that product line, Keller says. This has caused confusion with customers in the past.

Useful links related to this article:

Creative Samples from Del Solís ecommerce campaign
http://www.marketingsherpa.com/cs/DelSol/index.html


Del Sol: San Antonio
http://www.delsolsanantonio.com


Del Sol
http://www.delsol.com



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