Tucked halfway between Hamilton and Ngaruawahia on State Highway One in the great flatness of the Waikato is a small record shop that’s home to a real e-commerce cracker.
Horotiu’s Cranium Music is one of the most linked-to New Zealand websites in the world, and was a finalist in the 1999 TradeNZ export e-commerce awards.
Specialising in that most specialist of music, psychedelic and progressive rock, Cranium Records has won many friends worldwide, rating highly for its quality products and efficient delivery.
The brain behind Cranium is personable owner Richard Stockwell. After some early years as a promotions man in the early 1970s New Zealand record industry, Stockwell "retired" to a farming lifestyle with his wife, and the two spent time as sharemilkers and raising a family for 17 years.
As his children grew up, Richard’s interest in the music of his youth was rekindled, and he began a small mail-order operation supplying New Zealand and the world with new music by bands, such as Porcupine Tree, influenced by psychedelic-heyday artists like acts Pink Floyd and the Grateful Dead.
That mail-order outfit was launched in March 1996. In October of that year, it was joined by the website, and Cranium now includes a record label, home to a clutch of New Zealand psychedelic bands.
Celebrating five years online this month, this New Zealand pioneer will be overhauled, adding a new automated online catalogue.
Cranium’s e-commerce operations are a clever blend of such automation and hands-on quality control. Upon entering personal and credit card information, customer details are added to Cranium’s database, generating an email invoice in the appropriate currency. Stockwell then checks credit card details personally, and mails the products immediately.
“I like to keep that hands-on part of it. I’ve got regular customers, but if I get someone new, I’ll look at them closely,” he says. “It just gives me that extra ability to keep scams and rip-offs to an absolute minimum.”
Credit card transactions began to be offered by Cranium in early 2000, employing a secure server with PPQ-T (policed priority queueing) protection. The results were immediate. “The thing just grew in leaps and bounds. We were recording growth rates of up to 500% since we started accepting credit cards.
“There’s still this perception that New Zealand is at the end of the world, and that it’s going to take ages for products to be shipped,“ says Stockwell. This perception is altered by Cranium’s free shipping policy.
“They’re coming back to me saying, ‘Wow I can’t believe this. Four or five days after I ordered it, a CD from halfway across the world arrives on my doorstep.’ I sent one CD to a guy in Norfolk in England on the Friday, and the postman delivered it on Monday.”
Stockwell says his and his wife’s sole source of income earns them as much as when they were milking 230 cows. The key is building and participating in a like-minded community of enthusiasts interested in the music, he says. Stockwell participates in newsgroups, and writes a newsletter received by over 600 music fans. His core clientele of roughly 1000 regulars includes 400 in the US, 100 locals, 100 Australians, 50 in the UK, plus 20 in Japan and 20 in Brazil.
“The thing is that the web actually breaks down loyalty,” says Stockwell. “If you haven’t got the thing your customer is after, they’ll just go somewhere else. So it breaks down that old human standard of loyalty to your corner store. I think the trick is to rebuild that loyalty, which is actually harder than it used to be,” he says.
“Something we notice is that people realise because we’ve been online for so long we’re not just a fly-by-night operation.”
While core users return to the site, new users are harder to come by; the site’s front page gets approximately 1000 hits per week, but casual visitors don’t always take a certain crucial leap.
“The percentage of sales per the number of album sound samples that are downloaded is quite small. We get a lot of lookers, but the thing is to turn those lookers into buyers.”
Still, Stockwell is philosophical. Ultimately it’s all about spreading the word of the music. “It’s the type of music that isn’t chart music, which sells one month and not the next. It’s the kind of music that transcends time,” he says. His contacts and record label allow trading of stock, which in turn open up markets for the label like Brazil. "[Local Cranium Records band] Datura is now selling in Germany, Brazil, Japan and the Netherlands.”
Building that online, worldwide, community is both Stockwell’s main interest and Cranium’s prudent, unique selling point. “Taking a smaller cut hopefully means building up a bigger customer base,” he says. “ A lot of record stores, online and otherwise, charge a great deal for their imported CD, whereas I charge less. Some major record stores would charge $50 for a CD I sell for $30. I’m more concerned with getting the music out there,” says Stockwell.
How has this small Horotiu operation managed to stick around, and grow, during these five years of online turbulence?
“My advice is to walk before you run. The biggest problem with the American ‘dotcoms’ is that they’ve tried to sprint it. They’ve borrowed too much money to do too much beyond their reach, and they haven’t taken the baby steps.”
Stockwell is evidently succeeding in spreading the word, since his label’s band Datura has just been asked to play at a festival in Texas. “It’s a buzz, it really is,” he says.