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Adjustment: Small retailers shift plans as online sales grow

NEW YORK – shoppers in a JAM on Paper, they can choose from hundreds of holiday bows, rolls of wrapping paper and gift bags, in addition to the many thousands of daily stationery. Yet, the store will account for just 2 percent of the company this year.

JAM now gets so much of the sales online that the company has been reduced from five stores to a single location in Manhattan, owner Andrew Jacobs says.

“The second we launched the website in 2007 was the national,” Jacobs says. He estimates that the online sales will be up 30 percent this year, while the shop situated in the neighborhood of the East Village, in the area is probably only an incremental increase.

Some small and independent retailers are feeling the impact of the growing preference for online shopping have adapted by focusing more on their web business, such as diverting more advertising dollars to those areas. Online and e-mail to the sales nationwide rose 11 percent in October from a year earlier, compared with less than 2 percent growth in total retail sales, the latest Ministry of Commerce figures show.

There is space for both types of retail, but the growing competition means retailers must be able to meet the requirements of customers for the proper merchandise, comfort, good service and a pleasant experience, whether in a store or on a website, says Bob Phibbs, CEO of The Retail Doctor, a consulting company based in Coxsackie (New York).

“No single channel that you want to sell in is going to be easy,” Phibbs says.

Retailers also must ensure that both their stores and websites that can help make the sale for each other. Jacobs, with the eye on that need, says that he does not intend to use the remaining JAMMED Paper location.

“I have almost look in my shop as a billboard advertising,” he says. Some customers come to the store, buy a number of items, and then place a larger order online.

Antique dealers used to make the most of their sales in the shops or at trade fairs. Now, when customers go to a store, they are very likely to inspect in person the items that they already looked on the website of the supplier.

But the customers of M. S. Rau Antiques also are willing to even millions of dollars on an antique piece of art or see them online only, because they are able to provide multiple photos of an item from different angles and zoom in to examine it closely, owner Bill Rau says. So the 104-year-old retailer, which operates a store in the French Quarter of New Orleans, has shifted its advertising budget to online magazines and other printed publications.

The trend towards online is more pronounced this time of year. Rau sees the visits to its website increase by 20 percent during the holidays, although foot traffic to the New Orleans store has changed little.

“We have four sales this week through the website, ranging from $2,000 to $60,000, and I love it,” said Rau, whose antiques include jewelry, furniture, ceramics, silver and paintings. “Of course, has reached the whole world.”

“I still look at it as manna from heaven,” he says of the internet.

There is still a place for small retailers to give customers the service and emotional experience they want, says David Clarke, a retail consultant at PricewaterhouseCoopers. Shops where sales staff are friendly and take the time to explain the property may appeal even to customers who buy online because it is cheaper and/or more convenient, Clarke says.

“People want to spend time in an environment where they, like the people and what they are offering,” he says.

Magic Beans, a chain that sells baby merchandise, gets 25 percent of sales online, owner Eli Gurock says. That figure has not changed much in the past few years, because many parents, especially those with a baby on the way, information and reassurance as prams, cots, bottles and other objects.

“We have them an experience that is better than online, better than Amazon,” said Gurock, who has five Boston-area stores and one in Fairfield, Connecticut.

Gurock expected that if Magic Beans increases the online marketing, internet sales will grow. And as with antiques, a lot of people see the merchandise online and then come to the stores to look at it in person before they buy it. So he will free up time for both types of stores.

“If you’re not innovating and you’re not trying to sell on multiple channels, you’re not a retailer,” Gurock says.

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Follow Joyce Rosenberg on www.twitter.com/JoyceMRosenberg . Her work can be found here: http://bigstory.ap.org/content/joyce-m-rosenberg

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