At the height of the dot-com frenzy several years ago, Golf Galaxy president Randy Zanatta was weighing various e-commerce options for his young retail chain. He considered acquisitions or possibly licensing his company’s name to a third-party e-commerce operator. He came close to pulling the trigger on at least one deal, but sat tight while competitors developed their e-commerce operations.
“We were getting e-mails all the time from people who said they love our stores but they’re not (nearby). Why aren’t you online?” Zanatta recalls.
But the price to be online was high and the payoff was questionable; he says “we were told in 1999 that you had to spend $5 million” to start an e-commerce site.
This month, Minnesota-based Golf Galaxy, which has strong financial backing and big expansion plans, launched its initial e-commerce site. And, Zanatta notes, “We spent far less than $100,000 to develop it” through a partnership with UniteU Technologies, a Pittsford, N.Y., application service provider that delivers the tools for retailers to run their own Web sites.
Consumer research suggests that establishing a multichannel retail presence – Golf Galaxy also is about to send out a 48-page catalog to its 220,000 Advantage Club members – can be a boon for retailers.
“The consumer who shops at a multichannel operation rather than one that’s just brick-and-mortar spends 50 percent more dollars with that retailer,” says Mick McCormick, Golf Galaxy’s chief marketing officer. “The biggest reason why is the consumer feels more comfortable with that retailer and you become more convenient.”
The goal is to be seamless to consumers. Like other retailers, Golf Galaxy will accept returns at its stores from people who bought online. And its new stores will have flat-panel kiosks, allowing consumers to shop at Golf Galaxy’s Web site if they can’t find what they want in the store. Zanatta views REI, the Seattle-based outdoor sports retailer, as perhaps the best model for his company to follow as it integrates its selling channels.
He wants to use the Web site to help build the brands of his top suppliers. For instance, he anticipates putting streaming video on the site to promote key products.