Electronics is a mom-and-pop shop for the modern age. Joe and Rachel Friedman started the business as audio equipment store In 1 971 . They funded the original business, a 500-square-foot storefront near New Work’s City Hall, with the money the received for their wedding. Over 35 years, the Friedman expanded the business, adding records, equipment , cameras, computers, movies, and games. Today, J Electronics encompasses a lucrative catalog business and 10 specialty electronics stores covering 300,000 square feet of retail space on that same city block n Manhattan.
Among the stores are the famed J OR Music World and J Computer World. The J empire sells nearly every type of electronic device imaginable. However, the Friedman’s have resisted the advice of suppliers, such as record companies, who have told them the only way to survive and compete with big box stores was to become a chain. Rachel Friedman explained that “by staying on the block… We maintain control, which the chain stores lose. ” How does J&R continue to survive with only one location in an Industry dominated by Wall-Marts, Best Buy, and Circuit City? Quite appropriately. The Freedman’s have their son to thank for that.
Jason Freedman’s Is the vice president of e-commerce for J&R Electronics. In 1998, Jason, who started out as the company’s database manager, lobbied his parents to invest in the Web as an outlet for the company. J went online using e-commerce software developed by Interiorly Corp… A highly regarded product of the first dot- com boom. Underworld’s Commerce Exchange served J&R well enough to satisfy the notion that e-commerce would play a major role in the company’s future. In 20000, was ready to upgrade to a new version of the Interiorly software, which was touted as being much more robust than the previous version that J had installed.
Within a year, the upgrade process at J was thrown off track as the dot. Com bust brought about the demise of Interiorly. Jason Friedman’s was forced to continue development of J&R’s online presence without support from the software vendor. He and his staff managed to piece together a customized e-commerce application that could handle the 400,000 products that JAR sold. However, the solution did not support some of the features that online retail competitors offered, such as the ability to collect and display customer reviews and provide information on inventory statistics, and shipping time.
By that time, 30 percent of Jar’s $400 million in revenue being generated by Groom. Friedman’s was looking to inject new life into the Web site. With a staff of 50 IT workers backing him up. He explored ways to ensure that these. Com would remain as popular a destination online as the bricks-and-mortar store was in the real world. For the new site, he chose an e-commerce platform from Blue Martini and a CRM package made by Loyalty Lab. In addition, Friedman’s planned to bringer. Com In line with Web 2. Incepts by populating the site with videos and Introducing customer reviews. Those features were valuable tools that customers could use to educate themselves about products and comparison-shop before they committed to buying. In May 2006, unveiled an online loyalty link on another site, such as a price comparison search engine. The strategy intends to raise the number of unique visitors to the site and, as Jason Friedman put it, relieve J&R from “fighting over pennies with our competitors. For participating in the program, customers receive gift cards equaling 2 percent of their purchases. If successful, the loyalty program will keep past customers from giving their business to other stores, as well as entice new customers to Join the J&R community. Catalog shoppers are also eligible for loyalty rewards. Mark H. Goldstein, CEO of Loyalty Lab, noted that J&R already had a loyal customer base as a result of its top-notch customer service and focus on building relationships. All that the company lacked was a program that recognized customer loyalty.
Loyalty Lab’s CRM package helped fill that void by hosting the modules that enabled J customers to register for counts, manage their accounts, and redeem the incentives they have earned. JAR marketers can control the services from Loyalty Lab with simple graphical online tools using any standard Web browser. Goldstein point to additional benefits for J from the program in form of saving what he call “the Google tax. ” This is the 20 to 30 percent charge that JAR pays to search sites when visitors are directed to JAR from another site, a fee that JAR avoids when shoppers visit J R. Mom directly. J selected Blue Martini as its new e-commerce platform because Blue Martini functions well with Jar’s ERP software from a technical perspective. The two systems are able to exchange data easily. Blue Martini provides a better opportunity to share the strengths of J or’s bricks-and-mortar channels online. By doing so, the company hopes to achieve a greater competitive advantage over its chain store rivals. Blue Martini has to showcase online the standout features of a visit to a J Electronics store.
Only then can customer throughout the country respond to the business with the same sense of loyalty as those who physically visit the stores in lower Manhattan. JAR has plenty of advantages, or differentiators, to showcase. Its prices are very nominative, yet it maintains a vast inventory that rarely leaves customers disappointed. J also has a reputation for being at the leading edge of new technology. The company has a penchant for being the first retailer to sell new products or the latest versions of already popular products.
Furthermore, J is known to have a good sense for technology trends, such as the transition from VS. to DVD and the rising popularity of Apple products. J often caters to those trends before other stores are prepared to do so. Aside from good prices, perhaps the element of J that appeals to customers most is its sales staff. Customers who enter JAR stores know that the workers they encounter will be well informed and adept at explaining the features and specifications of even the newest and most high-tech products. With Blue Martini, J will try to emulate the expertise of its sales staff online.
The platform provides a Guided Selling application, which collects input from the shopper and produces a narrowed-down view of the product catalog that is tailored for the requirements and preferences of a particular customer. Customers are able to view products by brand, price, popularity, size, and availability of special offers. By providing interactive recommendations, JAR can put more information about products in the hands of the customers, which makes them more comfortable in their purchases. Sources, and comparison grids will also make it easier for shoppers to understand and select products.
Going a step further, Blue Martini enables J to deepen its Web content with videos, including hundreds of clips that feature staff members giving tutorials on specific products. The videos bring a personalization to the online shopping experience that normally would be available only in a bricks-and-mortar store. JAR even films the videos in its actual stores. The new e-commerce platform will also enhance the capabilities of software that J hand to run its Induce Web site search software separately from the Interiorly site.
The Induce software helps customers find, analyze, and determine relevancy in search results but these features could not be fully utilized in that environment. On the new site, J can integrate Andean with its Overviews customer reviews to help customers refine and sort products. Andean also features merchandising functionality that J will now be able to deploy for tracking the activities of customers across the JAR. Com site. The news. Mom launched in March 2007 with a host of new customer conveniences. If a customer selects a product that is out of stock, the site is prepared with a list of similar products.
The site also has real-time integration with store inventory, so onsite purchases are reflected in the availability of products online. JAR has also made the checkout process more efficient so shoppers arrive at final price more quickly. The shipping section has been restructured to improve the accuracy of delivery dates and shipping fees. Jason Friedman recognizes that, despite the increased functionality provided by Blue Martini, his company is still limited by avian physical stores located solely in New York City.
He notes that where chain stores can offer customers the option of ordering merchandise online and picking it up that day in person at the nearest store, J can only make that option available to customers in the New York City area. However, he feels that emphasizing e- commerce carries great potential for the business and represents the company’s future. Maria Daugherty, a senior consultant with J. C. Williams Group, a global retail consultancy, believes that J&R should not expect too much too soon.