Being small and agile was one reason Holt Educational Outlet, a developmental-toy discount retailer, was able to initiate an e-commerce strategy relatively quickly. The 20-year-old catalog retailer in Waltham, Massachusetts, which has a warehouse that also functions as a retail store, decided to delve into the Internet last year. Unlike large companies that mire a Web project in meetings and paperwork, president and CEO Paul Holt's 50-employee firm took action quickly by hiring an executive who was excited about the Web site idea and ran with it.
David Lord, the company's new CFO and chief information officer, wanted to make Holt a major presence in the educational-toy market on the Internet. "We redeveloped our business plan and decided that e-commerce would be our core strategy," Lord says. "Because we wanted to compete with the big guys and grow nationally, and because we knew we didn't have the kind of money to invest in our own stores across the nation, we believed if we put the proper e-commerce plan in place, we might just be fast and aggressive enough to grow quickly."
Lord hired a team to help run his department and implement the company's e-commerce strategy. The team chose Microsoft as its main platform and bought several state-of-the-art servers. It also bought Microsoft e-commerce software and signed up for multiple IT phone lines, i.e. more powerful lines for faster connections. Finally, it integrated its accounting software into Microsoft's site server.
The Web site, which Lord says cost about $50,000 (not including employee salaries), was launched last October--nine months after Lord was hired. When a customer orders a toy from the site, the system enters the information into Holt's financial system, then fulfills the inventory, processes the accounts receivable information and completes the credit card transaction.
Holt says all the hard work has been worth it: His company is now considered a major player in its industry, with projected sales of $2 million this year. And it recently entered into an agreement with Playmobil USA, which provides Holt with the exclusive first rights of distribution to sell some of its toys online. Playmobil also benefits from the agreement through an aggressive Internet marketing campaign that utilizes banner advertising and online database marketing generated through Holt's Web site. "We'll be able to give Playmobil information about people searching for its products," says Lord. "Playmobil doesn't have to hire a customer service firm to question customers [about] the products they like; we can put a question on [the site] and have 5,000 answers for them."
Besides its success with Playmobil, Holt's Web site offers special features that children and adults are signing up for by the bucketload. For example, the site's search engine, Toy Detective, lets shoppers track down specific toys by criteria such as age group, type of toy and brand name. And the site's Toy Register lets children preregister for their favorite toys and receive via e-mail personalized news geared toward their interests.
Many small companies such as Holt are doing everything they can to jump on the e-commerce bandwagon. They understand that having an online store means a small company can look big without having to spend big bucks. If you're thinking about becoming one of those companies, where do you begin? Following are some products and services to give you a head start.
Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at Melisscamp@aol.com