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Get a successful ecommerce site, and then open up physical stores

January 28, 2005

At the end of 1999, Ducti was a product idea with a website, and not really much else. The business's first roadblock was introducing the public to its rather curious inventory.

Ducti sells wallets and other accessories made from Duct tape - a very unusual fashion trend, but one for which there is a definite audience. The initial problem was first reaching for that audience and then making the sale.

One of the first things the site did - after setting up its shopping cart using Yahoo - was to create an online-offline price differential. A Duct tape wallet that sells for $21 on the Ducti site sells for $15 in a store. The site wanted to let retailers know that it would not undercut them. This set up step number two: a mass mailing of 65,000 postcards to small retailers across the country, from gift shops to novelty stores to clothing boutiques.

To tempt these mom and pop shops to carry a new (and strange) inventory item, Ducti offered a 90-day free return offer. About one percent of the 65,000 stores said yes, and suddenly the site had enlarged its market from one Web site to a network of stores. It became a new kind of business, a 21st century hybrid of online and brick and mortar, yet with none of its own brick and mortars.

Since then, the site has expanded to offer its wallets in some 3,000 small retail outlets across the country, all the while selling through the site itself. Maintaining these myriad relationships is not easy. "It takes a lot of effort - I'll tell you that," says George Constas, Ducti's national sales manager. But it works. Between selling through the site and through retail stores, Ducti has sold about 250,000 Duct tape wallets since 2001, Constas says.

The online aspect of Ducti's strategy must be handled with care, Constas notes, because the site doesn't want to hurt its relationships with retail stores. The duct tape accessories "are an impulse item," he notes, which makes an in-store sale much easier to make, whereas online sales usually only result if a shopper "has seen it before and they know what they want." uses its hip marketing to sell a very unusual line of products - all made from duct tape. To maintain good relationships with brick and mortar partners, the company does not under sell its retailers on its site.

However, its site is a key part of Ducti's strategy. "We try to encourage the people who have ordered online by giving them discounts every once in a while," Constas notes. For example, using all the e-mail addresses from its Yahoo store account, the site sent a mass e-mail offer for a holiday discount.

Its site is a showcase of new products, a constantly updated catalog of its new Duct tape designs. "We see a lot of traffic on the site," Constas says, and Ducti uses this to build all-important word of mouth for its unusual product.

It also plans on using the site to showcase original Duct tape designs created by the users themselves. Constas envisions holding an online contest to see which user develops the most interesting tape-based wallet, at which point the site would manufacture it and perhaps name it after its creator. The site is all about "an interaction between the end user and us," he says.

Source: eCommerce Guide

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