Marketing Charts reports that while consumers prefer to use the Internet to find information about companies, only 44% of small business have a website.  Half of the consumers surveyed said search engines were the first place they turned to for information about local businesses and only 24% chose the Yellow Pages.

Furthermore, the trend of consumers moving to electronic sources for information is accelerating, as this chart from the Marketing Charts article reveals:

Our experience in the apparel, accessories and shoe markets is that far fewer than 44% of retailers have websites. Among stores that sell missy and plus sizes to older women, a rough estimate is less than 5% of retailers have websites. With consumers turning to the Internet for information about stores, an offline retailer can only attract new customers through random foot traffic and word of mouth.

See the article at Marketing Charts for all of the numbers.

In a September 2008 report, Marketing Sherpa reported that about 50% of companies surveyed expect to increase their budgets for email marketing and social media marketing. Additionally, 83% expect to decrease their radio and TV advertising, and 60% will decrease print advertising.  Here is the chart from the Marketing Sherpa Report:

This chart also indicates, for instance, that of the 382 marketing managers that Marketing Sherpa polled in September, 20% said they would be decreasing their spending on social networks, which they call “Web 2.0″,  and 48% of marketers would be increasing spending on social networks. Presumably, the remainder of the marketers ( 32% ) reported “no change”. ( We’ll ignore for a moment the erroneous conflation of social networks with Web 2.0. )

The research isn’t really surprising if you’ve been paying attention to online marketing for the last few years, but it does indicate that the shift from offline to online marketing is continuing.

For apparel vendors, this research has a few specific lessons: 

• If you don’t have plans for email marketing, start now. There is a simple reason for the planned increase in email marketing: it works. 
• Conference and trade shows – “Event Marketing” " has long been unpopular but  considered mandatory. That seems to be changing, and it may be that we’ll see a significant decline in conference attendance in the next year. Perhaps the decline already began when Quicksilver pulled out of the Action Sports Retailer trade show. 
• Social networks are getting more interesting. Social networks still don’t generate much traffic to corporate websites, but they are becoming much more popular for connecting with customers. Does your store have a Facebook page?

ExtactTarget turned us on to the chart in a post on January 12.  That post has additional analysis for what this data means specifically for email.

A new paper from the MIT Sloan Research center demonstrates the advantages for businesses of having lower, consistent quality over higher, variable quality or early market share. 

For retailers, this means you should understand what are the most basic things that your customers consider a good experience and a good product and make sure those qualities are there every time. Don’t try to succeed by growing quickly, doing a lot of advertising, or trying a lot of gimmicks, even if some of the gimmicks are really good. Work on being good enough, but be good enough every time. 

You see this strategy in most of the major retailers. McDonald’s, Starbucks and Wal-mart all have had high-growth phases, but they didn’t start with high growth like the Internet companies of the 90s or a lot of high-profile fashion brands. Instead, they learned to do something very well and do it every time, in every store across the country. Then they grew. None of them have the highest quality products, but you can go to any of their stores at any time and know exactly what you will get. 

OK, you already knew this. This principle has been known in the business world for decades, and we didn’t need MIT to tell us again. The neat part of the paper is that they show the math behind the principle, and they show how the principle stacks up again other strategies. 

The paper, naturally, is not as accessible at the press release, talking about “strategic levers” and “positive feedbacks.” The gist of the paper is that  a lot of markets have positive feedbacks, where the successful companies gain advantages that allow them to get more successful more quickly than less successful companies. You know the principle as “the rich get richer.” 

This paper looks at the three ways companies can try to compete in these kinds of markets: 

1. Get a lot of market share really quickly. In the late 90s this was the popular Internet strategy called “first mover advantage.”  A company might do this through deep discounts, a lot of advertising, or opening a lot of stores. Lesson from the 90s: it doesn’t work.
2. Try to make the reasons that the rich get richer work more powerfully, for instance by using economies of scale to improve product quality, so the successful company can build a much better product than less successful companies. 
3. Work on making the products of more consistent quality rather than aiming for the highest quality. This is how McDonald’s became so successful. 

The paper’s conclusions are:

• In the very short run, increasing market share is the most successful strategy.
• In the long run, product quality overpowers the advantages of early market share. 
• In the long run, it is better to have a lower, consistent quality than an inconsistent quality that is, on average, higher.

So a lot of companies should look first at having a consistent, basically good customer experience rather than trying to grow quickly or trying a lot of wild ideas. 

There is one important caveat with the results from this paper: it is based on computer simulation and mathematics, not studying real people. It could be a lot of BS, but it does make a lot of sense when you look at the real world.

Twitter is a Web-based “micro-blogging” service, a text messaging service where people exchange the same sort of short message you might send from your cell phone, but distributed to a set of friends, not just one friend at a time. Using Twitter you can send short updates to your “followers,” other users who have chosen to receive your messages.  And “short” is really short: messages can be no longer than 140 characters, but that is more than enough if your message is well-crafted.

To use Twitter for business, you need to have followers. Followers are the people who listen to your short messages (known as “tweets”). You can invite people directly, but there is another method to get followers that relies on listening to them first. This technique is based on the observation that people you follow will get an e-mail that gives them an option to follow you. Many of the people you follow will follow you back.

So an easy way to get started is to follow a lot of other people, but you want to follow people who are interested in what you have to offer. These people are very easy to discover: just look at who is following your competition.

From the page where you enter your tweets, you can search for other people by keywords. For an apparel boutique, you might try: “style,” “fashion,” “boutique,” “shoe,” and “clothing.” Look through the results page to find entries that are either (a) similar businesses to yours or (b) have themes that are complements to yours. For instance, if you are selling surf apparel, you would search for “surf” and “skateboard” to look for other surf apparel retailers and vendors as well as board shops, skate shops, and conversations about skating or surfing.

Once you have a list of hits, click on a user’s name to get that user’s main page. Then look in the right-hand column for “Followers.” Click on that to get the list of followers for that user. Read through the list to find people who are likely to be interested in what you are offering and click “Follow” next to those entries.

After you follow these users, the users will get an e-mail announcing you. If you have set your username, full name, and bio well, many of these users will decide to follow you.

Following a lot of related users has an additional value"you will show up among a lot of users’ followers, where people looking for tweets like yours will see you.

Next comes the hard part"you’ve made an implicit promise to these people to send them interesting tweets, so get to work. Twitter about things your followers will care about, and include short links back to your website (use tinyurl.com to make long urls shorter). And now you’ve made a connection to a new set of potential customers.

A recession is part of the normal business cycle, and we will get through this one, just like all of the others. But things will be different in the next business cycle, and the change will represent an opportunity for companies that can understand it and address it.  

This recession has been particularly hard for independent retailers, with many going out of business over the last 8 months and many more business failures expected this year. However, people aren’t going to stop buying clothes, and they are not going to lose interest in fashion. The retail apparel market will return, and when it does, there will be a new set of retailers to replace those who went out of business. When the next recovery comes, I think the new retailers will be very different from the ones who didn’t survive the recession.

These newer retailers will be younger and more Internet savvy, and they are going to drive changes in the rest of the industry. What are these new independent retailers going to be like? Many of them will be from Generation Y, born starting from 1978 on, and will share many of these characteristics:

• They will have grown up with computers and the Internet.
• They will be very tech savvy, especially compared to the outgoing retailers.
• They will be more demanding and more likely to expect instant gratification.
• They will be more likely to question the way things have always been done and more willing to challenge the status quo. 

The changes that the post-recession independent retailers will be driving are not new or novel; they are changes that are already happening. The difference is that in the next business cycle these changes will accelerate. 

These changes should be both expected and welcome because they are the same changes that are happening in the people who are buying apparel. By adapting to the new independent retailers, vendors and line reps will also be adapting to the new consumers. 

They Will Be Internet Savvy

The new retailers will expect a larger percentage of their businesses to run on the Internet, and they will favor business partners who are also Internet-proficient. 

The Internet generation goes to the Web first to find new information"information that is only on paper does not exist for them. They don’t use the Yellow Pages, and they don’t buy printed business directories.  So, if they need a line rep, they are more likely to turn to FindFashionRep.com than a paper directory. Fax machines are far less convenient than e-mail and the Web, and they will prefer not to work with vendors who expect orders to be faxed to them. 

These retailers will ask all of their vendors a very sensible question: 

If I can buy clothes for myself online, why can’t I buy clothes for my store online?

Vendors who are not comfortable working with retailers online will be at a significant disadvantage compared to those who can work online. 

They Will Expect Vendors to Be Flexible

Generation Y is used to things happening on demand"they want fast service, last-minute changes, and immediate feedback. They will order a book today and expect it to arrive tomorrow, and they will expect the same kind of turnaround from their business partners. The expectation may not be reasonable, but they will expect it anyway, and they will prefer to work with the business partners who deliver immediacy. 

This generation did not create just-in-time business, but since it has been a common experience for them, they will consider it a baseline business practice. 

They Are Connected

The new independent retailers are more connected to their markets than past retailers because of a variety of social media that let them have an enormous (although superficial) social network. They can communicate with thousands of people through blogs, forums, Twitter, e-mail, and social networking websites. These retailers have nearly instant awareness of the trends emerging worldwide, allowing them to anticipate changes in local buying habits. 

This hyperconnectivity has also made them more aware of marketing, demographics, and media. Where previous generations studied marketing and are slowly warming up to new media, the new retailers have lived it and have a fundamental understanding of how media influences people and how people influence media. Because of this, they know when a vendor “gets it” and has crafted an appeal to the right markets. They will expect their vendors to be more than just manufacturers; they will want them to be their marketing partners, particularly with online marketing. 

Change Is Opportunity

The changing character of retailers is a significant opportunity and will create new sets of winners and losers among apparel vendors, line reps, and retailers’ other business partners. Partners who want to succeed in the next recovery can start with a simple practice: seek out their youngest retailers and ask them what they expect and what they need. They will be happy to talk about their needs, although they might suggest you follow them on Twitter or post to their Facebook walls.

Today, the Wired Magazine blog The Long Tail writes about the “Rise of the Retail Blogs”, blogs that retailers are moving to the front page of their websites, rather than being buried in the back. The reason is that these retailers are using the blog to draw people to their websites on a daily basis. The blog is not simply a way to communicate with website visitors, it is a primary was to attract visitors.

Most of the examples in the article are for stores that appeal to Geeks, the people who are most likely to read a blog, but there is also an example for a New York apparel store, reed space. Reed space is an excellent example of using Blogger.com for a retail store, probably the least expensive and most effective way for a non-ecommerce retailer to get online and promote their business. Another good example is one that we created to illustrate how to use blogger.com for a business website.