Many businesses believe that the online gold rush witnessed during the late 90s is a revenue opportunity that has come and gone. The truth is that the e-commerce revolution is just getting underway.
In the past few years, online buying has grown to represent 5 percent of total consumer purchasing (expected to expand to 15 percent by 2010) and more importantly, Internet browsing influences 30 percent of in-store purchases, according to Forrester Research. Online retail sales, including auctions and travel, will more than double from $172 million in 2005 to $329 million in 2010.
Executives have finally realized that the costs, resource requirements and logistics of launching and operating an online storefront have plummeted. Simultaneously, market demand and online spend has grown by leaps and bounds. The result? There has never been a better time for businesses to sell online.
Some businesses have embraced online sales while others—particularly those with retail partners—are reluctant to create an online channel. Companies should challenge long-held beliefs that direct selling will negatively impact retail performance. It is the responsibility of the brand owner to stay close to the consumer and monitor changing behavior.
Businesses that use the Internet to merchandise, communicate with and sell to consumers are in a stronger position to directly learn about consumer preferences, purchase patterns and motivations. With the Internet expected to influence at least 50 percent of in-store purchases by 2010 (according to Jupiter Research), increased direct knowledge of the consumer will enhance future product developments and potential profitability.
In general, buyers want quality products, value, convenience, information and selection. Top-rated e-commerce experiences include attributes such as ease of navigation, visual appeal, merchandise assortment, ease of checkout and several options for delivery and return.
How Can You Do This?
There are three primary options for creating a successful e-commerce presence with a satisfactory customer experience:
• Build it from the ground up: It is possible to build a Web presence on your own, designing a Web site, creating online buying functionality, assigning and loading products into the online database, training yourself to use it, etc. This method is time-consuming, costly and frustrating, and it can take a long time to recognize the return on investment.
• Buy something off the shelf: Though easier than starting from scratch, off-the-shelf tools might not include all the functionality you want and need from your e-commerce site. Not to mention the extensive installation period and staff training it will require.
• Outsource everything: Use an e-commerce expert who will walk you through each piece of a comprehensive solution, helping you identify only those capabilities you need, and then quickly building and deploying a fully-customized, e-commerce site.
A Plan For Action
There are three basic steps that every business needs to take before launching an e-commerce site, regardless of the methods used.
Get in the Game: It’s not too late to be a first-mover. The online channel continues to develop. Unlike most threats, this one is happening fast and the longer you wait the further behind you’ll get. Reduced technology costs and improvements in outsourced e-commerce products and services can help you achieve your online objectives faster, smarter and more cost-effectively than in the past.
Think Strategically: While it is great to say, “I think I’ll build a Web site,” it is far more important to first think about your business objectives, threats and opportunities and then develop an online strategy that supports your plan. Avoid tunnel vision, as it can stifle innovation and ultimately results.
It’s a Multi-Channel World: With consumers shopping for more things in more channels than ever before, businesses must think multi-channel. Building a Web site alone will not generate the traffic nor create the learning your business requires. It is now estimated that more than 50 percent of online purchases begin at an aggregation site such as NexTag, Shopping.com or Yahoo! Shopping. eBay alone accounts for almost 25 percent of all e-commerce in the United States and it is likely your brand can already be found on eBay. These channels must be considered in any online offering.
Most SMBs do not have the headcount, expertise or technology to effectively launch a multi-channel online selling strategy. As a result, they start by making it a part of someone’s ‘day’ job. Online marketing and sales are critical—and complex to execute well. While many organizations understand the basics and get excited about new initiatives, most lack the know-how to actually execute them. The smart money is on outsourcing the execution of your online strategy to a leading third-party service provider, one that is capable of working with your organization to build a strategy and then manage the implementation. Your costs will be lower, your results will be faster, you’ll be able to validate the multi-channel opportunity and you’ll have a whole lot more fun thinking creatively about future business opportunities.
