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Are You Ready For E-Commerce?

Tuesday, July 1, 2008

Are You Ready For E-Commerce?(GIFTBEAT)Have you been trying to decide if it's time to leverage your brick-and-mortar business by developing an e-commerce website? A recent Forrester Research study estimates that e- commerce sales will reach $204 billion this year—and skyrocket another 65%, to $334 billion in 2012! As more shoppers head online to avoid high fuel prices, browse for bargains and enjoy the convenience of 24/7 shopping, the timing could be just right. Before launching your cyberspace plans, consider this advice from Thomas Harpointner, CEO of Atlanta-based AIS Media, Inc., a leading interactive marketing and web services company.

Q. Why is online retailing so appealing to consumers?

A. Both affluent and frugal consumers are using the Internet for their own reasons. For the affluent, it saves time and [they can] have items delivered to their front doors. For the frugal, it is an obvious way to save on fuel. They can let their fingers do the walking, go from site to site to find discounts and avoid sales tax in some cases. With approximately $30 billion per year in sales growth [projected in the next four years], that alone should be enough to convince retailers of the value of online retailing.

According to a recent Nielsen survey, over 85% of the world's online population has used the Internet to shop. Online retailing allows smaller retailers to reach a much larger audience. There really is no boundary. If you can sell to a customer 50 miles away, you can sell to one 500 miles out. Online retailing is especially [beneficial] for specialty niche retailers who specialize in products that are not readily available, like certain clothing lines and types of gifts.

Q. What can you tell our readers about the ages of online shoppers?

A. What's interesting is that the fastest-growing online audience is not kids but senior citizens. They have become a lot more comfortable [shopping online] over the past 7 years. If your store caters to that audience, you can now cater to them on the Internet. Seniors shop online for convenience, the ability to save, to browse online and educate themselves, and to have items delivered directly to their doors. It is also safer in many cases. Plus, they don't have sales pressure. Online, they can make a relaxed decision and buy on their own terms.

Q. What should store owners consider before navigating into online retailing?

A. First, remember that there's a difference between shopping and buying online. Many [who browse the Internet] ultimately buy in a store. Retailers should consider the hassle factor of selling online. For most, the primary concern is the cost of developing the site and then how to get people on the site. They tend to overlook having products and services in place and the cost of shipping. Think about how—if and when a sale comes in—you would feel about the item being sold. Would you feel excited or consider it a hassle to ship? If [it would be a hassle,] maybe it's not a good product to be selling online.

For example, if you sell heavy brass elephants, take into consideration how much it would cost to ship one. Consumers are sensitive to shipping fees. If the cost of shipping substantially increases the total cost of the purchase, shoppers will be more inclined to make the purchase at the store. “Free Shipping” also happens to be one of the best online incentives to get customers to buy.

You do need to consider the total cost of selling product online. When you consider the time to pack and the shipping costs, will it be worth your while? What will happen when you get a sale? Or 10 sales? Or 50 sales? It is a good problem to have, but an online reputation can spread very quickly. Consumers tend to be very impatient. When they place an order, they expect it to go out the same or next business day.

Think about the back end [of the sale] and be prepared for returns. There will be no way to avoid them. Have a good policy in place. Decide who will be in charge of processing returns. The flexibility and ease of your return process often dictates both how much business and repeat business you get. If your delivery, shipping and returns are slow or a hassle, business goes away very quickly. It helps to make one person the manager of your online initiative. This is someone who is ultimately responsible [for your e-commerce business], and for thinking past the sale and even past the delivery.

Q. How can retailers attract customers to their websites?

A. When business owners think about being online, they think of search engines and email. The most commonly overlooked way, but one of the best ways, to market an e-commerce site is off the Internet. If you have a physical location, you have a tremendous advantage over an e-tailer. Your own customers can drive traffic to your site. Your [store's] walk-in traffic is worth a tremendous amount of advertising dollars—but you don't have to spend a penny on [that type of] advertising!

Encourage your existing customer base to spread the word if they enjoy their experience [on your website]. Make it very, very clear on your site that you do have a physical location. This instills immediate confidence in customers. For example, you could say your store has been in business since 1929 or include a picture of your storefront. Give site visitors the opportunity to sign up to receive an e-mail newsletter with special coupons, special offers and advice from you or your staffers. You want to be seen as an expert on your site. [Also, be sure to] include your website address on every store receipt, business card, banner and flyer.

Q. Why do studies show that most consumers are unwilling to try new websites? A. Most e-commerce sites that exist today are quite amateurish in terms of the quality of design and functionality. If a store owner decides to go online and doesn't take it seriously and does it on the absolute cheap, the site may hurt [business] more than help. If you're going to set up an online store, do it right. The cost should be in line with what it costs to do a direct mail campaign. If a retailer spends $3,000 to $5,000 to set up a site, there's a benefit once it's paid for because there are less maintenance costs and the site is up 24/7.

[Amateurish websites] are a big reason for consumers' lack of trust. They don't want to do business with companies they can't trust. Customers will shop elsewhere even if it costs more. Amazon.com continues to sell because of its brand recognition—and its reputation for customer service. When a new site makes an appearance, [that retailer] has the challenge of online branding and creating an identity. Focus on existing customers first because they already trust you. Then, build your reputation and add testimonials [to your site]. It all stems back to leveraging that [brick-and-mortar] presence!

Don't disappoint your site visitors. You spend time [in your store] building your reputation. You smile when customers walk in. Make sure you make that same impression when consumers enter your website. Then, allow them to spread the word. Customers will talk about products that are not available elsewhere and good customer service.

Note: To learn more about online retailing, Harpointner recommends marketingvox.com and ecommercetimes.com. For more information about AIS Media, including the firm's Excerpo® Storefront software and professional development services, log on to aismedia.com, where you can subscribe to the firm's free e-newsletter, eBusinessNews.info.

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