The bricks and mortar store had already generated a loyal customer base addicted to Remo products. When Giuffre raised enough angel seed money to create a Web site it was to offer a non-transactional site for the "orphan customers" to register interest and say which of the Remo products they wanted back first. He started off with 90 e-mail addresses.

Today there are 12,000 Remo customers who access the Web site. It became transactional in July 2003 when the first of those requested items went on sale. But it is still a small business, and with turnover of less than $1 million, Giuffre says, it is "marginally profitable".

While the technology is crucial, Giuffre himself is more interested in the philosophy than the technology, hiring developers to work with him on an ad hoc basis when he needs to update the system. Not surprisingly, he believes his approach is the right one. "I know it's possible. Look at Amazon and eBay, the ones that understand the community. I'm not interested in anonymous relationships with people that buy from me."

It is not well understood by traditional retailers though, he says. "DJ's [retailer David Jones] greatest asset is their untapped reservoir of customers. Their staff come and go, but the customers are still there. To see the Internet as just another sales channel is to miss the point.

"Yes it's low cost, but it's more about the interactivity in a relatively frictionless way and retailers that understand that will win. It's scary to managers because it sounds disempowering, but it's not. It's not as anarchic or democratic as it seems; you can lead people.

"For example, we sell a fringed beach towel. We asked which colours should we add to the range and a high proportion of people voted. Based on the votes, we chose the five colours to do, and then closed the feedback loop telling customers what we've done. That, he says, generates a loyalty and customers reward that by buying the fringed towel in "their" colour. Besides building loyalty, Giuffre says it dramatically reduces development expenses because you have already got customers telling you what they want.

"This is a different model. Your primary source of new customers is via your existing delighted customers. In a way it's a very old fashioned approach of making the experience great and then giving them one-click ways to tell their friends."