The world of ecommerce is extremely lucrative and its growth is showing no sign of slowing. In fact, online shopping is set to double in value over the next three years alone. And it's not just the large retailers that can cash in on its popularity, there's huge potential for small businesses, too.
However, there are still many small firms that are yet to venture online, finding the prospect of entering a new space too daunting, or lacking the resources to launch their own ecommerce enterprise. But with competition rife in the retail market, sitting back is no longer an option and small businesses must start taking their first steps or risk losing further revenue as more consumers go digital.
There are many aspects to launching an ecommerce business – it's not just a case of setting up a website, adding some products and going live. If SMEs want to better secure the success of their online efforts, a clear business plan must be in place right from the start.
Creating this solid structure will enable you to refine your strategy for launching to a digital audience – many of whom will be very different to typical in-store shoppers. For example, online customers are not limited to the local area, they can come from anywhere in the country (or even overseas). Once this is finalised, you can then get started on the exciting bit – producing the website.
The great thing about launching a website is the almost unlimited number of features and functions that can be added. However, be warned. Experimenting with too much too soon could mean you can't maintain a high level of customer service.
Start simple, to get it right. Outline what your website needs to do right now and implement that to begin with, you can always add more features later.
Don't forget to think how the site will look on a mobile device. This is extremely important to today's consumer, so consider a mobile optimised or responsive design.
It can be very tempting to take a do-it-yourself approach to building a website. It can be cheaper and offers total control. However, it's important to consider how time-consuming it will be, along with the extra strain it can put on resources.
Partnering with a professional design agency will likely provide a slicker look and finish, while allowing small firms to draw on external expertise and have ongoing support when required.
So, just as consumer behaviour changes, so must small retailers, as they seek to provide shoppers with the means to browse and buy however they choose.
The ubiquity, democracy and power of the internet has enabled millions of people across the globe to enter the ecommerce marketplace, either as a consumer or a retailer. However, accessibility doesn't guarantee success and competition has never been so tough, so here are five top tips to give your ecommerce site the best possible chance of success.
Consumers are smart; consumers are savvy. More so every day. The average customer is capable of comparing prices online in very little time and stats show there is very little brand loyalty. The products you have listed on your site must be competitively priced in order to compete with other ecommerce sites. Unless you are selling a unique product, this should be a priority.
People expect an easy-to-navigate, mobile-friendly site in order to purchase their products. The key word here is expect. Online customers are presented with a plethora of consumer engaging sites that utilise call-to-action buttons, SEO-friendly content and tactically placed advertisements, none of which take away from the overall usability of the site. Quick, convenient and aesthetically pleasing should be your principle boxes to tick.
This is an obvious priority, but an interesting insight. Most products on the high street are priced between 70-80% above their production or purchase costs. This varies between product and marketplace, but ecommerce, as a general rule, is no different. Without the need to store products or pay for distribution (unless you do intend to do this), your costs are automatically lower. Understanding exactly what your costs are, your margins and thus your profit (creating a proper business plan helps crystalise this) is maximised. Every penny counts.
Unlike a shop, where the customer's experience is determined by the store aesthetics and shop staff, convenience and neutrality win the day in ecommerce. An essential aspect of this is quick loading times and engaging call-to-action buttons. A customer will lose interest quickly in your site if the page loading times are long. Customers expect a speedy website that isn't slowed down by dated tech. Time is money.
The customer is always right and engaging with them, either with complaints or requests for further information, is absolutely crucial. Don't leave them hanging on. Angry customers can easily spread bad reviews and negative comments online that dissuade potential customers. Remaining professional and friendly in the public's eye will control those negative reviews. Even bad can be spun positively if you deal with it quickly, efficiently and solve their problem or answer their query.
Consumer behaviour has changed. As a shopper, I literally cannot remember the last time I went into a supermarket superstore.
Virtually everything that I buy I purchase online. My behaviour is not exceptional and I don’t think that the evolution of my buying habits is especially unusual either.
Even if I am, arguably, more ecommerce-active than the average consumer, it seems to me that my online buying behavior will soon become the norm. The shift to e-commerce is utterly inevitable.
And yet, many businesses are stuck in the past.
UK government stats show that in some sectors as many as half UK businesses don’t yet have a website at all. And of those that do, almost half are non-transactional.
The research suggests that e-commerce penetration of the total UK business population is about one third. In other words, two out of every three businesses do not have a transactional website. These are incredibly alarming findings.
There are many reasons why business people choose not go online. Typical comments that I hear include:
And yet, not one of them would argue with the need for a telephone landline.
I know from firsthand experience, having run the business division of O2, that just three years ago the majority of UK business owners were adamant that having a landline phone number was essential to being in business.
Today, British businesses should consider having a presence online as even more important than having an office telephone number. In other words, online is the new landline.
A landline number used to be a mark of authenticity for businesses. The move to a digital economy has meant consumers are now more likely to trust a business with a website and they will consider a business more credible if they offer the ability to transact seamlessly online.
Irrespective of a business’s appetite to win more customers; regardless of the business owner’s desire and ambition to scale-up; in the digital economy I passionately believe that:
Being online is not just about doing business, it is about being found. It is about saving time (for both you and your customers). And most importantly, it is about being trusted.
In recent years, electronic payments have grown in popularity along with the demise of the cheque and fewer consumers carrying cash in their wallet or purse. Card payments have become the preferred method for payments, with shoppers expecting small businesses to accept debit and credit card transactions in a physical (ie offline) environment. The need for secure online payments has also grown as more merchants look to ecommerce services in a bid to drive sales.
E-commerce is becoming more accessible and affordable for even the smallest businesses, and complete end-to-end solutions for web design, shopping carts, online security and even virtual terminals are available in this increasingly sophisticated marketplace.
Fixed or mobile chip and PIN acceptance is ideal for physical trading environments, such as retail, hairdressing, accounting, hospitality and other business that processes transactions. For tradesmen on the move there is a whole host of new innovative mobile related payment technologies that are rivalling cash.
Methods range from devices that attach to a mobile phone and are capable of accepting card payments, to the digital mobile wallet and a portable chip and PIN device that runs off GPRS. All of which allow companies and sole traders to receive payment for goods and services on the spot.
When selecting a payments provider, merchants should consider options other than their bank. An independent supplier is more likely to offer a cost effective solution, along with support and benefits. What businesses need to consider is what method would best suit their customer base. And what methods is their customer base familiar with and happy to use.
Innovative digital payment options are great when it comes to the younger tech savvy customer, but merchants must also consider more mature shoppers. Overall security and industry requirements are a top priority and must be thought about when deciding on a digital payment method.
When selecting a payment option, SMEs should work with a third party that can provide not only the technology – online or physical – but guidance and a transparency of capital costs and fees, both monthly and annual. What many small business may not realise is that there are other options available to merchants that are more beneficial than simply using their personal bank.
Whichever payment method is selected, if an SME trades in both a physical and online environment, by joining up their payment offering they can gain an overall picture of transactions and the customer, which provides valuable insight for business decisions and strategy planning.
Blog supplied by Gareth Poppleton, managing director at Retail Merchant Services.
There are a huge number of companies peddling different solutions to boost ecommerce sales, and of course they all state that they are the future. Some claim that they will address the “trust” issue of online commerce; others are working on smart imagery, providing the consumer detailed product information via zoom, crops and 360 degree transitions. Then there are the latest developments enabled by smart phones, including augmented reality.
Anyone considering starting an ecommerce business needs to take all of this into account. There are many different things to think about, and in this blog I try to touch briefly on a number of them.
SellerDeck has around 12,000 sites using our solutions to sell online, so I do feel that we have acquired some insight into what works and what doesn’t. Interestingly, the most successful sites seem to focus on some of the most basic things: like a great range, helpful descriptions, competitive pricing and a dedication to customer service.This may be the case, but complacency is not a business virtue. So what is really likely to prove important to the future of ecommerce?
Payment on the mobile
The first area is payment. It’s difficult to make payments online, and the fact that it’s still possible for buyers to see charges appear on their card if their details are stolen is a real issue. We’re waiting for the banks and the mobile operators to get their collective acts together. There’s lots of optimism that the next couple of years will see progress towards the mobile being the prime payment and payment validation device.
It’s never been easier or more cost effective to sell online, and the trend is to put online, in-store and telephone sales together in one integrated application. It makes sense that some people want to see merchandise for themselves, think about it at home, then order online. Conversely, some people want to look at what’s available in the web store, then visit the shop to pick up the goods in person. As demand has risen, ecommerce suppliers have been able to provide these integrated systems without breaking the bank.
Mobile commerce and augmented reality
Nowadays a large and growing proportion of the population are carrying around sophisticated computers – aka smart phones – that know their geographical location, can combine this with real time pictures or sound and are continuously talking to the web. This is very exciting and brands such as RayBan sunglasses and IKEA are already demonstrating the possibilities. Companies such as Red Lazer are also working on innovative applications that allow you to use the power of the smart phone to combine real world items with online shopping; I’m convinced that there is much more to come.
One area that has moved from beneficial to vital in ecommerce terms is reputation management. I’m very excited about this because my company has recently done a deal with one of the companies that we see as a rising star in this field – Feefo. This area is about managing online merchant’s reputation online, and services like Feefo have a vital role to play. Feefo (which stands for Feedback Forum) runs an independent service which asks customers for feedback on both merchants’ service and products. The merchant can’t change the feedback (anything illegal or obscene is edited), but has a right of reply. There will always be feedback about merchants on the web. Having it in one place where the positive balances the negative, and having a right of reply are major benefits of an independent feedback service. The result tends to be around a 10% rise in sales, more on some sites.
The final word
We are now in the second ecommerce boom. The first, around the year 2000, proved partly illusory and partly a harbinger of the future. This time it’s for real. Someone contemplating a start up needs to assess pursuing brand new areas enabled by the latest technology and where much more technical skill, money and luck is required. In contrast there’s more chance of success with a traditional ecommerce venture, although the potential rewards are smaller and it’s still vital to be aware of the latest trends.
Budding entrepreneurs need to decide whether to build a traditional business with reasonable chance of success, or shoot for the stars in areas that are yet to be discovered. Whichever route you take, good luck.
Small Business 2.0 was held on Saturday 23 January. Now in its second year, it’s an event dedicated to helping small businesses profit from the web. Emma Jones went along and picked up some useful nuggets.
Business at the weekend
One of the reasons I like the Small Business 2.0 event is that it’s held on Saturday. Not only does this mean it’s accessible to 5 to 9ers (those holding down a day job and building the business at nights and weekends) it also means there’s a relaxed feeling about the place as attendees listen, learn, and meet new people in an informal setting.
These ingredients came together well on Saturday and were the recipe for an interesting and enjoyable day. Here are a few things I picked up:
(eBay report that even though sellers participating in eBay for charity give 10 per cent of the sales price to charity, their products are 20 per cent more likely to sell, at a better price. This resulted in $50 million being raised for charity in 2009).
Altogether, there was a great vibe and positive signs that 2010 will be another exciting year for anyone starting and growing an online business.
Emma Jones is the founder of Enterprise Nation and author of ‘Spare Room Start Up – how to start a business from home’. Her next book ‘Working 5 to 9 – how to start a business in your spare time’ will be published in May 2010.