Local businesses see financial opportunities, social costs in online commerce

Scott Sutphen, owner of Malibu Shaman, is one of the few Malibu shopkeepers who have not taken their businesses online. He worries that online shopping might replace human interaction with impersonal sterility. Max Taves / TMT

Malibu businesses venture online to escape high rent and expand their customer bases, but the loss in customer social interaction concerns some.

By Max Taves / Special to the Times

The rising popularity of online shopping is creating new financial opportunities for local business owners, but the social costs of Internet commerce concern some. Malibu businesses that venture online see an alternative to rising rental costs and the opportunity to attain global customer bases. Some business owners, however, anticipate a loss in the sense of community to online shopping.

Few local businesses have been unaffected by the Internet’s popularity. Malibu Divers, Automotive Legends, Blockbusters and dozens of Realtors are among countless Malibu businesses now online.

Facing increased rental costs and heightened online price wars, Blockbuster will close its Malibu store this January and continue reshaping its business in the image of online rival Netflix. While company policy prevented any local employee from speaking to the media, its evolving business strategy has been public. Blockbuster has remade itself from a local business into an online company sending DVDs directly to customers’ mailboxes.

Transforming a local business into an online store was a way of reducing risk for one longtime business owner who spoke on the condition of anonymity.

“The Internet is the future. It has helped me to hedge my bets toward security … because I really can’t depend on a landlord,” the owner said.

This shop owner expected that renewing an upcoming lease would be prohibitive to business and developed an online store that has already paid for itself.

Online business has meant an international customer base for Will Tashen, the owner of Automotive Legends. Tashen started his business five years ago in the Malibu Country Mart and saw the Internet as integral to his business strategy. He now sells vintage Porsches, Ferraris, and Maseratis to customers throughout the country, and Europe and Asia, using his eBay store. Online sales now account for 70 percent of his business, but he expects that number to rise.

“I see it [online sales] going to 80 percent…. As we roll out more and more brick-and-mortar locations, our sales will probably do really, really well over the Internet because people tend to be more satisfied with your credibility the more locations that you have,” Tashen said.

With the competition of businesses increasing online, Malibu stores have sought a niche in quality customer service and care.

Carter Crary’s business, Malibu Divers, went online seven years ago as a way of luring new divers for instruction and also local diving trips. Malibu Divers’ main source of revenue comes through instruction, but it also sells diving accessories; both are markets with increased online competition.

“I don’t attempt to compete on price. I can’t do that, especially online,” Crary said.

Instead, Malibu Divers’ business relies on customers “looking for a very high level of service and customer care and [who] are willing to pay accordingly,” he said.

The Web site brought new customers almost immediately and Crary was able to replace expensive phone book ads with his Web site. Malibu Divers regularly receives e-mails from people worldwide who want to dive locally. The success of his site has encouraged Crary to expand the scope of his site. He’s considering creating an online store sometime next year that would sell shirts and sweaters with the store’s trademark logo.

For Scott Sutphen, the owner of the Malibu Shaman, a store that sells New Age products, the decision not to have a Web site was part strategy and part ideology.

“People can certainly buy it [New Age products] easily online and cheaper, but they can’t have the experience that they have here,” Sutphen said. “They come into the Shaman and it’s a definite experience … I think the social and human interaction is missing [online] and that’s important to sell crystals, New Age music, incense and minerals.”

Bob Walker, the owner of Tops Gallery, has considered creating a Web site for his eclectic art and home furnishings store if high rent forces his business from its current location in the Malibu Country Mart. However, he worries that something might be lost in the transition from Malibu shop to Web business.

“What I would miss…is the interaction with artists and with customers,” he said. “I like being face to face with people and having dialogues and a real relationship … I’ve always been a hermit at heart, kind of a recluse, and this [Tops] has been great for me because it’s made me come out and be in relationship with people.”