Internet outreach
Besides keeping prices down, the company’s single-store format has proved beneficial in other areas — namely, flexibility. By being relatively small, it is able to adapt to industry changes more quickly than its competitors can, and it’s also more willing to take risks.
“You’ve got to be aware, and spend on information and computers, go to shows and see what the new products are and be open to trying new things,” Abt says.
This openness to change and trying is what led Abt Electronics to venture onto the Internet and into the world of online sales. In 1996, it launched its first Web page featuring product information and the store’s address.
“We’re really into information and sharing, and we knew that in the old days, appliance people would go to books and look up specs,” says Abt. “We did it first just to get information to the salesmen so they could give it out to the customer. Then [outside] people came to it. We were one of the few appliance guides.”
Recognizing the site’s draw, in 1997 the company expanded from an online product information guide to a complete online appliances and electronics store.
One criticism of many consumer sites is that the shipping charges often cancel out any savings achieved by buying online. Abt has overcome that with a simple policy.
For customers purchasing appliances and electronics online, delivery to anywhere else — California to Connecticut — is the same flat fee.
“We just charge one rate,” Abt says. “We definitely lose money on some products, but it’s real simple — $78 to buy one appliance and ship it. It just makes it easier for the customer. We’re [usually] making enough on the product that we can pay for the shipping. That’s not always the case, but it’s a simple way to shop. And we just don’t charge for things under $50.”
Today, the online store provides three distinct benefits to Abt Electronics. First, it allows it to reach consumers nationwide.
“By being one store, we want to do more online than we can than in-store,” says Abt. “That’s the only way we can grow — we’re not building two stores. That’s one way to grow externally — keeping one store and still doing business out-of-state.”
Second, the online store allows the company to sell more than it can display in-store. While the showroom is huge, there simply isn’t enough room to stock every available color or model of every product.
“A key part of being online is trying to integrate it into the store; whenever we can, we try to make things similar,” he says. “But there is product that we’ll only show online. In our store, there’s (thousands of) square feet of showroom, but you still can’t show everything, especially like little accessories and different colors — small differentiations that you don’t want to show in the store you can put online, so you can see what a gray handle looks like if you’re only stocking the stainless steel.”
And third, the online store helps streamline shopping for customers. According to Abt, approximately 80 percent of Abt Electronics’ in-store shoppers visit the Web site before coming in to make a purchase.
But the online store’s success was never a given. While there was demand from customers to purchase online, Abt Electronics’ vendors weren’t so eager to have their products peddled over the Internet. And while many vendors have come around to the idea of Internet sales, some still have concerns.
“Everyone’s worried about bad information being out there online,” says Abt. “There (are) a lot of unauthorized dealers online — you might not get a warranty if you buy from them and … they don’t have a lot of good information on their Web site and their Web site’s slow. (Vendors) are just really hung up that people might get a negative experience of the product by it being on those Web sites.”
That concern, says Abt, can be assuaged by taking time with the vendors, explaining how the sales process works with Abt and showing them how the online store works, alleviating anxiety about quality control.
Another common worry is not so easy to relieve.
Vendors “were worried that, if something’s online, in one minute you can click and find the price at 50 different stores,” says Abt. “So they didn’t want it to just become a commodity. Especially the higher-end brands — you have to sell and explain to customers why a Sub-Zero refrigerator is better. So even today, you cannot buy a Sub-Zero online, because they’re still nervous about the different markets and protecting the different dealers locally.”
In that case, says Abt, the only thing to do is to keep working with the vendors, let them see for themselves the quality of Abt Electronics’ online store and hope that they’ll change their mind.