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How eHobbies.com Thrives Against National Chain Stores

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 In between driving holiday sales and driving his family to nearby Disneyland, eHobbies.com, President Ken Kikkawa talked to us about how he provides hobby enthusiasts with more than 60,000 SKUs in a wide range of hobby and specialty toy categories.

A Nextopia customer since January 2009, Ken discusses his favorite metrics, how he succeeds against national toy chains, why he likes the Yahoo! Stores platform, and the challenges of seasonal retailing.

You sell hobbies and specialty toys that are purchased by a wide demographic range. In addition to B2C customers, you also sell to institutional organizations such as camps, schools and the Boy Scouts. How do you address their different purchasing needs?

It is a challenge we’re just starting to figure it out. Each organization is different. Firstly, in terms of awareness, most of these organizations find us through online search or word-of-mouth referrals. We haven’t done any real specific marketing other than add a couple of pages to our website.

The second big area is in payment type. Most of these organizations do not pay up front with a credit card, and the preferred method and terms differ widely. For example, schools usually need to pay via purchase order. Because we need to make it easy for them to order from us, we’ve modified our payment and financial policies (including adding different payment options in our shopping cart).

A third area is in our product selection, where we offer a wide range of categories that reflect the different age levels, for example, that you find in scouting. A big category for us is model rockets. For the youngest scouts, say in first grade, we’ll provide pre-assembled kits that are simpler than what older boys in grades 4/5 want. Offering a wide range of products allows us to meet whatever level of product sophistication a scout troop needs.

Are there any challenges in selling toys online that you think affect your company more than other retailing categories? I’m thinking here of the annual media “hot toy” frenzy, with the Tickle Me Elmo craze of 1996 coming to mind.

We try not to play in the hot toy arena. It is very competitive (product availability, pricing, etc.) and you are up against the large/national mass merchants and toy chain stores. They can get behind certain products with huge advertising budgets, leaving a very tough grind for independent retailers. Instead, we play more in the specialty arena, with a product line comprised of more timeless categories like car model kits.

rccarYou said in your September 2009 Practical Ecommerce column that your priorities before the holiday season became too hectic “were optimizing SEO & PPC programs, site enhancements (updates to the item pages including video demos and product delivery estimator) and a quick and easy way for customers to get real-time order updates without logging in to their account.” How easy it is for a Yahoo Store to incorporate the customization that this obviously requires?

Customizing a Yahoo! Store is not easy—and I speak from many years of experience—but the tools are there for developers to work around. (We rely heavily on our developer network to do it). Over the years, Yahoo! has rolled out additional enhancements that are beneficial for merchants. The options to customize the shopping cart have been a very good upgrade and it is now totally customizable. We moved to Yahoo! in 2001, left in 2005, and returned late in 2006. We just found that for a retailer of our size, it provided a really robust platform that we could depend on.

In the same column, you describe yourself as a merchant at heart, having worked as an assistant buyer for May Company department stores in the 1980s. You mention working on the floor during November and December and getting a chance to get customers reactions to merchandise on the spot. How is this different from the online environment?

I used to be a buyer in the pillows and bedding categories. There are very specific fill weights and densities that help people sleep comfortably, depending on their sleeping positions. When you are physically standing on the store floor, it is easy to impart this knowledge to shoppers and either help them find what they’re looking for or what you know will really help them.

You can’t really replicate this interaction online but there are tools that can help you. I really like to help customers on the phone and find out exactly what they need. Email support is another good opportunity. I like to peruse our customer support email boxes. I look at what they are asking for and what we are saying. While it obviously helps close more sales, it also helps me exert some quality control over our sales conversations, ensuring that we’re converting as many prospects as possible into happy customers.

How can online retailers recreate some of the key elements of in-person retailing in a virtual store?

You need to create a conversation channel with the prospect. We use email, telesales, and live chat. We’ve used the latter for two years and I frequently review the logs in the same way that I look through email threads. We have also started to take the best questions from our customers and turn them into a hobby FAQ.

How does site search fit into your merchandising strategies?

About 25% of our visitors go straight to the search box so it is a really important piece of technology. I particularly like Nextopia’s redirection functionality, which enables us to direct shoppers to specific landing pages based on their search terms. For example, here is what a shopper will see when searching for “slot cars” on our site.

Thanks for your time Ken. Give Mickey a big hug from the engineering team at Nextopia.

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