The status quo of sales in traditional channels such as brick & mortar stores is slowly but surely being challenged by that of online shopping. We are constantly being reminded by businesses with traditional business models of how they are having a hard time competing with cheaper prices found online from overseas competitors.
As a business owner you shouldn't let this discourage you, in fact don't consider this a weakness but an opportunity! There is a very good reason why big business is kicking and screaming about online shopping - it is a huge threat to their well established business model and they don't know how to react. The good news is that for existing small businesses, a pivot in the way you do business is easier than for those big businesses.
The statistics don't lie, in 2009 for all sectors of the economy in Australia domestic online retail sales achieved between $19 & $24 billion dollars - Australian Bureau of Statistics. Thats huge! This is only set to increase as the internet penetrates our daily lives in the way of our internet connected devices, home broadband connections and access to the web at work.
As a business owner you can embrace this opportunity, offer your existing customers the convenience of online shopping while opening your business up to a market of consumers that you would otherwise miss out on through an online store.
There are many benefits of tying an online store in with your online marketing efforts as well. Think of it this way, for a traditional store if you do a television ad or direct mail campaign your customer still needs to get in the car and go to your store to get what they want. The key thing here is that they either need what your selling so much that they must have it immediately or it's a higher involvement purchase requiring them to get hands on before purchase. However for an online store you can use online marketing to get your customers attention in the same medium that they will be using to buy your product - their computer!
This is a fantastic position to be in, as an existing business you already have the basic infrastructure in place. Merchant banking accounts, inventory, suppliers and hopefully a website - if not check out our post about The Importance of a Web Presence. Not only this but you have an existing client base and undoubtedly a knack for running a successful business.
This puts you in a unique position to open your store up to not only the entire country you operate in, but the world (if you want), imagine that!! Suddenly you will see why the big established businesses are worried, your boutique store for selling the best fashion in town, or your product that the supermarkets won't stock are suddenly available to an entire nation of shoppers.
The exciting part is that setting up an online storefront no longer has to mean that you need to employ a web developer - of course you can if you want, but there are so many e-commerce tools available that make it easy to manage this to make it a seamless extension to your current website.
Start Up Business
This is where the internet is extremely exciting for budding business owners. In fact thanks to the internet setting up a store no longer means that you need huge amounts of capital to get selling. Your start up business can skip the steps of finding an expensive lease in a retail strip, hiring the right staff, paying to have the store fitted out and hoping you've set up shop in the right area for the correct customer demographic.
Through utilising an online storefront, you have the advantage of being able to market your offerings nationally & internationally at the click of a few buttons. The lower upfront costs and the lower ongoing overheads of a virtual store rather than a brick & mortar store mean that you have the ability to either:
- Sell your goods at full retail & take advantage of a higher markup due to lower overall running costs.
- Undercut your offline competitors and offer your product at a lower price to gain a higher quantity of sales.
Both options are possible due to the lower operating costs, resulting in profits for you - the business owner. Do with this what you will but ultimately higher margins or higher revenue (and hopefully profits) will mean that you can put money back into successfully marketing your business to help drive customers for continuing success.
The internet offers businesses a wealth of opportunity to expand an existing business or simply just get started. While it may not lend itself well to every product category, the categories it does suit offer customers convenience, price advantages, greater accessibility (think 24/7 shopping!!) all factors that customers love and help drive loyalty and repeat purchase.
We have attached an infographic below that shows a few reasons why having an online store makes so much sense especially for categories such as clothing, digital media, furniture, electronics & jewellery.