Why I Blew $130,000 on a New Website
By Scott Brown, Co-owner, Marbles: The Brain Store, Chicago, Ill.
In the spring of 2008, I co-founded Marbles: The Brain Store, a retail store that sells games aimed at stimulating the brain. We started out as a kiosk at the local mall, and later that year spent $100,000 to open a full-sized store in downtown Chicago. We had about $5,000 left over to build a website, which I personally maintained.
Our customer base was largely made up of tourists. Once they went home, they had no way of making repeat purchases other than by shopping at our website. But customers reported that our website was difficult to navigate. In fact, many didn't even realize they could purchase products directly through the site.
By the end of 2009, we had expanded to four stores in Chicago with $150,000 in net profits. We could either use the money to design a new state-of-the-art website or open up another location. We felt that we had hit a wall in terms of keeping up with our quickly expanding and increasingly geographically diverse customer base. After careful consideration, we chose the website. It was a risk -- there was no guarantee the website would bring in any more customers -- but it turned out to be the right choice.
Aiming high
Opening another store seemed like the natural choice. Our existing stores had more business than they could handle. On the holidays, the stores got so packed we had to turn people away. We had maxed out our inventory capacity, as well as the number of employees we could hire.
But opening another store would only get us so far. Our downtown store maxed out at about $1 million in annual revenue. So adding another store at best would double that, and we were aiming higher.
Also, physical retail stores' revenues are affected by factors like weather and seasonality, and only serve a limited area. A website, on the other hand, would give us access to markets anywhere in the world. There would be no physical limitations to how many customers we could serve at once. We wouldn't have to worry about rainy days hurting our sales or how many employees to hire since we had the ability to fill all our shipping orders in-house. To top it off, it's a lot cheaper to maintain a website than to pay rent and maintenance costs for a physical store.
Outsourcing the work
I have some Web design skills, so I maintained our first website and did all the coding. It had decent traffic, but a very low conversion rate. Customers couldn't figure out how to navigate it or make purchases.
I wanted our new website to be designed, developed, and maintained by professionals. And if we were going to blow our budget and spend $130,000 on a website we wanted to make sure to choose the right company for the job.
We chose an agency called Avenue for two main reasons. They were local, so their employees could visit our stores easily and get a sense of our company's brand and our customer base. Secondly, they did both design and development in-house, so we knew they could keep our branding consistent.
Avenue spent nine months designing and developing our website. They started with in-store research and development, and then began creating the framework for our website. Our ultimate goal for the website was a full-fledged digital version of our physical stores.
Recreating the in-store experience
What customers love most about Marbles is the in-store experience. All of our products can be tried out of the box, and we have trained floor salesman we call BrainCoaches, who explain how to use our products and games and discuss how they can help improve brain function. It was difficult and expensive to translate our hands-on sales approach to a digital environment, but we made it happen.
Our old website used stock photos of our products from manufacturers. This time we took professional photos of all of our products. Our products have high-end designs, and might look nice on a coffee table. It's important that comes through on our website or customers might not understand our pricing. We also recorded videos of our brain coaches demonstrating how to use our products and explaining what aspects of brain function they help improve.
Now that we had a website that accurately represented our brand, we wanted to broaden our customer base. To do that, we hired a public relations firm to market the website, which helped us get featured on TV stations including Fox News, MSNBC and CBS. Each time we were featured, our traffic jumped multiple percentage points. We also ran Groupon offers in more than 50 cities where we didn't have stores. All in all, we spent around $40,000 on marketing and it's helped us increase the traffic of our website from 9,000 to 50,000 unique visitors per month.
The right choice
Two years ago our website only made up 1% of our business. Last year it made up 8% and this year we project it will make up 10%. That's a lot of growth, considering our revenue doubled from $5 million to $10 million in that same time period. Plus, the website has helped us earn the revenue we need to open up eight stores this year, ten more stores next year and 15 more in 2012. In two more years, we think the website will make up 30% of our business.
Scott Brown served a church mission for two years in Estonia, Latvia and Lithuania managing the receipt and distribution of over two tons of humanitarian aid.
-- As told to Harper Willis
Read more: