How One Savvy Retailer Grows With Facebook (But Not Ecommerce)

Posted: Dec 23 2013, 4:21pm CST | by , in News

 
How One Savvy Retailer Grows With Facebook (But Not Ecommerce)
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For years now, the conventional wisdom in retail has been that you’ve got to jump into ecommerce, or you’ll frustrate shoppers and lose them to competitors. But that’s not the winning strategy for every retailer.

Case in point: Fast-growing franchised women’s apparel chain Mainstream Boutique, which is forecasting $12 million in 2013 revenue despite not selling a single item online.

Instead, sales at their boutiques are soaring, with stores open more than a year averaging over 30 percent increases, says franchise director Corey DiNicola.

The company drives customers to shop frequently through separate Facebook pages maintained by each store. But there is no ecommerce anywhere in Mainstream Boutique’s business model, either within Facebook or on company websites.

The Minneapolis-based company was founded in 1991 by former L.A. garment district apparel buyer Marie DeNicola, and began selling at private trunk shows. Mainstream opened its first retail store in 2000. Franchising has helped the chain grow quickly in the past few years — it’s expanded from 13 stores in 2010 to 40 units this year.

Avoiding ecommerce has been a key factor in Mainstream’s recent growth and success, DiNicola says. Here’s why:

No online comparisons

Once you start selling online, DiNicola notes, your price can quickly be compared with the price for that item at other chains. That puts pressure on to cut prices, which wreaks havoc with margins and net profit.

By offering more unique merchandise items and making items only available in-store, Mainstream avoids having to cut prices to be on par with competitors.

Staying offline also means Mainstream’s individual boutique owners are free to set their own prices with a recommended company range, and prices don’t have to be uniform across the chain, DiNicola notes. This allows franchise owners more flexibility in adapting their assortment and pricing to local tastes.

No franchisor-franchisee conflict

For a franchisor, selling online on the main company website potentially puts the franchisor into competition for sales with its own franchisees. While some franchise chains have solved this by crediting franchisees based on customer location, DiNicola says Mainstream is happier avoiding any appearance of eroding franchise owner’s local customer base.

Tempting Facebook offers

Rather than having a corporate Facebook page, Mainstream has seen success by leaving Facebook marketing to the individual store owners. Relevant Facebook updates keep shoppers posted on new merchandise as it comes in weekly. Contests and customer shots also help keep Mainstream’s store Facebook pages lively.

Sometimes owners do post an item’s price at their store — but prices that appear in the text of a Facebook post are not very searchable. And it’s unlikely shoppers at one Mainstream store would check the Facebook page of another store that isn’t near them, so price variations posted on the Facebook pages aren’t detected by customers.

Preserve unique in-store experience

Driving shoppers to visit the physical stores allows Mainstream to retain tight control of its customer experience, says DiNicola. Mainstream aims to offer high-touch, knowledgeable customer service, an experience that can’t be replicated with a website’s shopping cart. So they don’t try — the in-store experience is the only Mainstream experience.

“We create an experience that’s personalized,” DiNicola says. “Staff aren’t trying to hard-sell them, and customers love the experience of being greeted by first name and having staff who know their preferences.”

Source: Forbes

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