As we continue working toward our goal of bringing Adirondack-based
manufacturers’ online sales, as a proportion of total sales, up to the national
average, our data does indicate some very positive trends, including:
AdirondackCraft.com
Annual
Report - 2004
Along with processing online retail credit card sales, AdirondackCraft.com offers an attractive online display of products, descriptions of the producers and their work, listing of product pages in search engines, and national exposure for local artists, craftspeople, and small manufacturers. We are continually improving and marketing this e-commerce program.
There are no fees for participating in AdirondackCraft.com. We return between 50% and 75% of the retail
purchase price directly to the producer, with price points generally equal to
or above prices paid in local gift shops.
When an item is purchased online, we forward the information to the
producer so they can ship the product while we provide customer service as well
as online credit card processing and collection of sales tax and shipping
charges. The web server resides in the
Adirondack region and residents of the region perform all the IT services. Our labor input is extensive as well as
diverse, and includes the following:
providing secure online shopping, honoring major credit cards,
instantaneous card approval, answering product questions, forwarding wholesale
inquiries to artists, updating software and hardware, monitoring website use
and correcting problems, monitoring search engine placement and making
adjustments, promoting product features in national magazines, and assisting
artists with photography and product descriptions.
The following information provides annual sales data and other online activity for AdirondackCraft.com.
Number of
producers represented on AdirondackCraft.com:
67
Number of
products for sale on AdirondackCraft.com:
355
Number of
product variations (colors, sizes, models, etc.): 897
Total number
of visitors past 12 months: 82,205
Average
number of visitors per day: 216
Total number of online orders: 318
Average
number of paying customers per month: 27
Number of producers who processed an order: 50 (75%)
Most
producers included in one order: 4
Average order
amount: $ 96
Average sales
per month: $ 2,227
Largest order
received: $ 1,250
Number of different States where customers submitted orders: 44
E-commerce sales data at that level of detail does not appear to be available for any other regional e-commerce program in the U.S., and evaluative data of that nature is seldom available for other economic development efforts in the Adirondack North Country region.
We have always taken a reality-based approach to e-commerce and its
potential economic impact in rural areas.
Our original SBIR proposal to the USDA anticipated that an extremely
successful regional online sales program would result in the Internet providing
10 percent of total sales to each participating manufacturer. A newspaper article in the New York Times (11/9/03)
reported that online retailing comprised two percent of all retail sales in the
U.S., with projections indicating that
ten percent of all retail sales in the U.S. will occur online by 2006. There are a few e-commerce success stories
in the region, and one or two producers on AdirondackCraft.com may be
approaching two percent of their sales occurring online, however, the majority
of small rural businesses are far behind those national averages for online
retail sales.
As we continue working toward our goal of bringing Adirondack-based
manufacturers’ online sales, as a proportion of total sales, up to the national
average, our data does indicate some very positive trends, including:
August, 2004 registered the largest monthly sales
total over four
years of fulfilling
online orders - a total of $4,457 in sales.
to $2,227, exceeding $2,000 for the first time in four
years.
The moving average for monthly sales –
including 31 months
of sales data - now stands
at $1,908.
The average order amount has held steady at about $90 over
the
past 18 months.
The
percent of sales to New York residents dropped below 20
percent
for the first time in four years,
to 16 percent of all sales, indicating
the growing national appeal of
AdirondackCraft.com.
Orders were received from 44 different states over the past 12 months.
Each of the 803 customers we have served during the past four
years is
a satisfied customer. The number of return customers continues to
increase.
Specific
online sales data is shown in charts at the end of this report.
With four years of experience in attracting and fulfilling online orders for close to seventy small manufacturers in the region, AdirondackCraft.com now can demonstrate positive economic impacts that continue to grow.
·
Total orders processed: 803
·
Total items ordered and shipped:
1,802
·
Total value of sales: $ 64,000
·
Amount distributed directly to producers: $ 38,400
The research that provides an evaluative
component to AdirondackCraft.com has resulted in research findings of interest
to organizations exploring use of the Internet as a rural economic development
tool. There are positive
entrepreneurial impacts resulting from an Internet-based economic development
tool, similar to the concept of the "learning economy" put forth in
Ducatel etal. in The Information Society in Europe: Work and Life in an
Age of Globalization. Local hands-on experience with a regional
e-commerce program
contributes to creating locally directed and
relevant learning opportunities within rural regions, resulting in the active
acquisition and maintenance of knowledge, the cornerstone of sustainable
economies.
Concurrently, our research with AdirondackCraft.com over the past three years has found a considerable amount of enthusiasm among participating producers in terms of being part of a regional effort to apply the Internet and e-commerce to the marketing and sale of their products. In addition, through hands-on experience and one-on-one interaction with our staff, many have become more entrepreneurial in the way they design, display, and describe their products. Some who had not used the Internet became more interested in it and began using e-mail and the Internet. In short, the participants are becoming better entrepreneurs, which in turn is leading to increased income for them beyond the online marketplace, resulting in a positive economic impact that may exceed the value of the online sales that we process for them.
The regional AdirondackCraft.com program is a learning process for us as researchers and implementers of e-commerce. During the past four years, we have learned that networks of craftsmen, artisans, and small manufacturers in rural areas are verbal networks. They are more likely to listen to what their colleagues say, than to what they might see printed in a newsletter, in an e-mail message, on the web, etc. A favorable recommendation for AdirondackCraft.com from another producer can make the difference between participating in the program, or not. We have determined that such one-on-one activity is crucial to the success of any regional e-commerce effort.
The Adirondack North Country region is synonymous with the manufacture of handcrafted products such as Adirondack chairs, pack baskets, guide boats, and fine furniture. Although the public’s interest in rustic home décor has grown considerably over the past ten years, producers based in the Adirondack region appear to capture only a small percentage of the national market for those goods. The market for locally-made products is further constrained by the difficulty the region’s gift shops and other retailers have in finding products made by producers residing in the region. There are few concentrated efforts to market Adirondack-made products on a regional or national basis, a serious shortcoming that AdirondackCraft.com is rectifying with an attractive and easy to use online shopping experience.
Low population densities and geographical remoteness combine to limit economic opportunities that are available in more urban areas. Companies hesitate to locate or relocate in a region having a relatively small employment base, relatively high utility costs, and a limited commercial transportation options. Because of these characteristics, the Internet offers a cost effective way to attract business and sales to the region is spite of the geographic and work force limitations. Because the majority of small manufacturing firms most desire business assistance that directly increases their revenue, the support of a regional online catalog and e-commerce website is a valuable and effective way for regional economic development organizations to support local manufacturers.
Through the use of public–private partnerships, which are now viewed favorably by granting organizations, it is possible to expand AdirondackCraft.com with many more producers, products, and features, resulting in a measurable increase in economic benefit to the region’s small manufacturers.
Examples of activities and innovations that AdirondackCraft.com could develop include:
1.
Adding
new producers to AdirondackCraft.com.
2.
Putting
new products online for existing producers.
3.
Developing
new customer service features to AdirondackCraft.com, making it easier to
select product variations and to see similar products.
4.
Revising
product descriptions regularly to improve search engine placement, such as in
Google.
5.
Promoting
products to national magazines on a regular basis to encourage their use in
sections on Home Décor, Holiday Gift Giving, etc.
6.
Using
the experience and findings from four years of e-commerce to assist producers
in the marketing and sale of their products.
Community development professionals
have been reluctant to make the commitment necessary to provide the on-going
Internet-based sales, order fulfillment, and customer service that we have
initiated for the Adirondack North Country region. Over the past four years we have essentially absorb the risk in
developing a regional online catalogue and e-commerce site while tackling all
the learning curves necessary to achieving the efficient and cost-effective
program that we have. Organizations
interested in promoting and branding the
region’s products and creativity have an advantage over similar organizations
in other areas: Adirondack Craft.com
has a proven record of sales, customer service, and measurable economic benefit
to the region’s manufacturers.
The efficiency and cost-effectiveness of AdirondackCraft.com is generating national recognition for the program, recognition that is beneficial to public-private initiatives that include support and growth of AdirondackCraft.com. Examples include:
Holmes & Associates were the topic of an Entrepreneur
Magazine article, in their “Net Sales” column, entitled: Surf’s
Up – Use web analytics to help your site work smarter, not harder (April 2004, p.86): http://www.entrepreneur.com/mag/article/0,1539,314776,00.html
A forthcoming issue of the Forest Products
Journal will feature a research article by Holmes & Associates, in
collaboration with researchers at LSU and the University of Idaho, North
and South: An Exploratory Comparison of Internet Use by Small Wood Products
Manufacturers in the Adirondack Region of New York and in the State of
Louisiana.
Holmes & Associates received recognition for Excellence in Business (2003) from the School of Business and Economics at Plattsburgh State University, in large part because of AdirondackCraft.com.
CopyrightÓ
2004, Holmes & Associates, use by permission only