26 | Ask the experts 2014 published by Business in VAncouver
Online offers a new world of opportunities for expanding your company’s business Question | What do I need to know if I want to take my retail business online?
Kevin McLeod | Founder and CEO, Yardstick
David Robertson | Owner, the Dirty Apron Cooking School & Delicatessen
Daniela Cubelic | Tea master and founder, Silk Road Tea
hen taking your retail business online, you are potentially starting a whole new business with a separate marketing strategy, sales process and operational flow. Here are seven things that retailers need to think about: •Competition. These can be websites from around the world. Examine your online competition, and don’t assume that it’s the same as for your retail store. •Differentiation. Going online means you’re open to being price-shopped. Be sure your products are differentiated enough from the competition that they can’t be compared solely on price. •Software-as-a-service. There are a number of SaaS e-commerce platforms that will give you a fully functioning e-commerce website at a low monthly fee. This is a lower risk option, which will avoid you having to pay thousands of dollars up front. •User experience. Get your users to the product they want and through the checkout process with as few clicks as possible. Fewer steps mean fewer chances for users to give up before the transaction has been completed. •Shipping and returns. Get a handle on your process for packaging and shipping products as well as the costs therein. And have a system to promptly process any returns. •Internet marketing strategy. Online shoppers may not buy right away. That’s OK. Think about engagement and building relationships. If in doubt, read up on some local social media or Internet marketing success stories. Copy what has worked for other companies. •Foot traffic. Typically, an in-store shopper is more likely to buy and will spend more money than an online shopper. Encourage your online shoppers to come down to your retail store through promotions or special events.
ecause customers now expect to be able to get what they want without having to leave their desks, taking your retail business online would appear to be a logical decision. However, the room for error is much greater. Because you have to track your inventory based on online sales as well as the sales in your physical retail store, it takes an enormous amount of organization and attention to detail to maintain a high standard of customer service and keep the numbers accurate when expanding online. A big aspect to keep in mind is timing. For an online order to be processed in a timely manner, one must check back often to ensure that no orders are being missed. This proves especially true with our catering business that takes online orders. If we do not check back often to see if there are any last-minute placements, we might not only miss a deadline, we could also lose future business. Therefore, it’s vital to be unmistakable about deadlines for online orders. We have made it very clear on our website that orders need to be placed before 4 p.m. the day prior. This way our staff know what to expect when starting their working day, and customers can expect their order to be delivered at the appointed time. Beware the illusion that an online store will reduce staff costs. In order to have staff process online orders, one must hire employees who are computer-savvy, and thus more expensive, while maintaining staff to help customers who prefer to visit the bricks-and-mortar location. The Dirty Apron’s Cooking School system is 100% online, and after four years, class bookings are now at about 50-50 between online and phone bookings. So while there is a good portion of customers who are happy to book online, there are just as many people who still prefer to be able to talk to a person. That 50% of our customer database can’t be ignored. Without it, our business would not be profitable.
nline sales are an opportunity to grow your business with lower overhead costs as compared with a bricks-and-mortar outlet, but it’s important to consider whether you can be truly successful at it. Do you have unique products that aren’t available anywhere else? If not, assess whether you can compete on price, selection and service. Your competitors are likely to have sophisticated software, a larger product selection, lower pricing and enticing incentives, including free shipping and generous return policies. If customers love your product or if it’s unique, they may be willing to pay for shipping. If not, do you have the margins to absorb the cost? Beware of hidden costs, including packing materials, labour on assembling orders, and higher merchant fees for online transactions. Breakage and returned goods can double postage fees and staff labour. Will you need to add new telephones or hire customer service staff? How much can you afford to invest in a website, online advertising and search engine optimization? It’s your 24/7 sales force and a well-designed site drives sales, but it can cost significantly more than a bare-bones option. Do you have the infrastructure and policies to ensure a great, consistent and congruent customer service experience online and in-store? I also always begin and end by thinking about how I can exceed my customers’ expectations, knowing that happy customers are my best ambassadors. Finally, be sure to take the time to do your research and develop a strategy for success.