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Online retailers reap rewards of success

There can be few words dreaded more by local retailers than 'online shopping'. Despite regular appeals by Hamilton merchants to 'Buy Bermuda', growing numbers - aided and abetted by couriers like Zipx and Mailboxes Unlimited - are bypassing Front Street altogether in favour of their living rooms.

But if this trend is enough to reduce many shopkeepers to despair, some entrepreneurs have sensed an opportunity. Indeed, a handful of local businesses are trying to capitalise on the Bermudian penchant for online shopping through a simple mantra: if you can't beat them, join them.

Among the latest of Bermuda's online-only retailers is luxshoeri.com - started last year by lawyer Zakkiyah Daniels. Noticing a gap in the market for women's footwear - and acting on an entrepreneurial instinct as old as any - Ms Daniels decided to start her own boutique.

"I wanted to create a store for…the business professional who has responsibilities, maybe a few children in school, who can't afford the higher price ranges but still wants to look good," explained Ms. Daniels, who started the business last December.

Yet, after months of preparation, her next move was not to find premises or hire staff - instead she contacted a local web-designer.

Supplying local IT firm Advanced Systems with only a logo and colour scheme she soon found herself not only with a sleek new website, but a fully-functioning business.

Ms Daniels, who selects the shoes based on her own taste and with an eye on her customers' budgets, warehouses her inventory locally and offers customers same or next-day delivery.

"Most of my orders come through on Thursday or Friday before a big party," she explained, adding that her business eliminates the hefty delivery fees typically added by courier firms. Her lack of overhead means she can sell shoes not otherwise available on the Island at only $10 to $20 above suggested US prices.

Ms Daniels is only the latest of several Bermudian entrepreneurs to join the online migration. One of the first was John Cooper, who founded Bermuda Supply (bermudasupply.com) in 2003.

An Englishman who worked as a quantity surveyor in Bermuda for 15 years, Mr. Cooper started the website originally with an aim to import building materials. Soon, however, he saw a market for home appliances on the Island and moved quickly to meet demand.

Today, his business imports an array of appliances from generators to washing machines and is the authorised dealer for Thermosaps hot-tubs. The company provides home installation and warranties, with all work done by trained local technicians.

"We are a Bermudian company," said Mr. Cooper, who operates from an office in New Jersey, "if we decide not to have a brick and mortar presence on the Island…it doesn't mean we are distant."

Indeed, like all online-only entrepreneurs, Mr. Cooper sees distinct advantages in eschewing the 'brick and mortar' approach preferred by his Hamilton rivals. It means, he says, that all appliances sold are brand new, while customers can chose the exact model they want - not just the one in the showroom. Yet though his business model is rooted decidedly in the 21st century, Mr. Cooper's values are firmly traditional.

"We try to be the most economical with the best service," he said, when asked how closely he monitors the local competition. "We're not too scientific about comparing with other companies."

Of course, one advantage to the conventional showroom is the chance it gives the customer to see the item before buying it.

Yet, according for Mr. Cooper, his customers come to Bermuda Supply already informed.

"For something like an appliance, customers are pretty sure they know what they are getting…people are usually well-educated about it."

For Ms Daniels - dealing as she does with the decidedly more fickle shoe shopper - this presents something of a challenge. To assuage nervous customers, she offers a full refund on most items returned within 30 days. Yet, she says, as the world of online shopping gets bigger, more customers seem willing to take a leap of faith.

It is a trend not lost on some of Bermuda's more-established retailers. The two remaining Hamilton Department stores - Gibbons Company (www.gibbons.bm) and AS Cooper (ascooper.bm) - have both re-launched their websites to include an online shopping feature. Meanwhile, Burrows Lightbourn - a liquor store that can trace its origins to 1808 - recently introduced wineonline.bm, where customers can buy from the wine dealer's extensive offerings without ever leaving home.

Perhaps it is a sign of the times, but Bermuda even has its first 'virtual shopping mall'. Shopaholic.bm, founded by brothers Ralph and Brenton Richardson, allows retailers to promote new arrivals or advertise discounts online.

The website promises merchants a "virtual storefront window to displaying their top-of-the-line products 24 hours a day".

Ms. Daniels, who for now operates the only online shoe boutique in Bermuda, keeps an open mind about possible competitors.

"When I started I thought some retailers would see the same possibility," she says, adding she hopes to expand the business in to the Caribbean.

"It's just the risk I've taken, but I think competition is good anyway."

Opening a small business with minimal overhead and few employees (Ms Daniels employs only one part-time delivery person) sounds temptingly easy. Yet one stalwart in the field sounds a cautionary note to other would-be entrepreneurs.

"It's not as easy it might sound," warns Mr. Cooper, now in his seventh year of business.

"You do need a lot of experience and knowledge of your product. It's a bad idea to try and do something that you don't know."

Yet the success of businesses like his will doubtless lure others to follow. For long-struggling retailers, where 'Buy Bermuda' has failed, 'Buy .bm' may just do the trick.