Small Biz: Online Sales Lessons from Nike, Netflix

CHICAGO (TheStreet) -- What does it take to make a sale these days?

Low prices help, which is why Wal-Mart (Stock Quote: WMT) has survived the recession better than other big-box stores. Government-funded incentives like Cash for Clunkers have also made a difference for companies like Ford and GM.

But a few companies have managed to boost their bottom line by focusing on a specific retail channel: online sales. Whether it's sport-equipment giant Nike (Stock Quote: NKE) offering a one-of-a-kind shopping experience, or the movie rental company Netflix (Stock Quote: NFLX) honing its feedback system to increase customer satisfaction, the right Web site can build brand loyalty and translate that loyalty into higher revenue.

The downside is that it's not easy. Just about every company, big and small, has a Web site, and the vast majority of them are seeing the same slowdown as brick-and-mortar stores. What sets apart the success stories are their relentless focus on customer service, education and customization.

Does your Web site offer detailed products specs, reviews and other need-to-know information? Can shoppers find what they want quickly and conveniently? Can they customize your products to meet their specific needs? If not, it only takes a few seconds for browsers to click to another site that does.

While online sales in general boomed over the past decade, the current economic situation put the brakes on that growth. According to comScore, which tracks consumer spending, e-commerce sales were flat in the first quarter of 2009 and down 1% in the second quarter.

The U.S Commerce Department, which surveys retailers, declared the situation even worse: A report released this week showed online retail sales down 4.5% in the second quarter, compared with the same period last year.

But that doesn't mean people have stopped shopping online (just as they haven't abandoned the mall completely). They've just become more discriminating: researching and thinking over purchases before they spend money. If you're selling online -- or even just using a site to promote your business -- you have to make a convincing case for why buyers should choose you.

The Internet makes it easier than ever to analyze customers' needs, says Scott Silverman, executive director of Shop.org, the National Retail Federation's digital division. "Look at the log of search terms, and you'll see what they're most interested in, and what they're having trouble finding," he says. The Google Optimizer program allows you to post two versions of your home page, then see which produces better results.