Now that retailers have reopened, albeit in an altered way, will retailers drop their online efforts? How can you move your retail business from a bricks and mortar store to online? How do you decide what online elements will work for your business? And what are some of the pitfalls you should avoid? During the lockdown, when all but essential retail business premises were shut down, many businesses quickly moved to increase their online presence.
The government has offered support through local enterprise offices (LEOs) to enable businesses of all kinds to improve their ability to trade online. The Trading Online Voucher Scheme is a grant for businesses to promote their products/services online. Businesses which are approved for the grant can claim 90% of their web-related expenses back, up to the value of €2,500.
The benefits of trading online
The benefits of having an online trading presence were highlighted during the lockdown as businesses which were already online could continue to trade even with the shutters down. Depending on the size of the business (and the ability to socially distance in warehouses and business premises) some were able to gain new customers and retain existing ones simply by continuing as normal.
The risks of changing trading practices
However, as with everything in life, for every silver lining there is a cloud! When switching from instore trading to online there can be risks involved. For retail businesses which have outdated technology, moving online may require an upgrade with the potential to disrupt existing trade.
Anyone who has ever ordered anything online knows what it’s like to wait for the product to be delivered. We can all remember the stories of people who had done all of their Christmas shopping online only to have to double up with last minute instore shopping because Santa was overwhelmed due to demand or bad weather and he couldn’t deliver the goods on time. For retailers, making sure that they can meet the demand for their product is important. Managing customers’ expectations around delivery and stock is vital to build and retain trust. While customers have been conditioned to expect delays due to the pandemic of late, they might not always be as accommodating. For retail businesses that have physical stores, adding an online element may require installing more up-to-date point of sale technology. Deciding whether this is worth the return on investment will come down to balancing the potential new markets beyond the existing loyal customer base.
Chicken and egg: which comes first, online or instore?
Some brands which began selling online, through websites or even Instagram or Etsy, have shifted to having an on street presence as well as online. Having built a reputable online brand they successfully add a bricks and mortar side too. Reuzi, the sustainable-based retail business, began as a website and pop-up shop before moving to a premises in Foxrock Village. Reuzi continues to serve a much wider customer base than Dublin 18 through their website and hugely popular Instagram channel.
We’ve also seen some Irish independent retailers dipping their toes into online in imaginative ways during lockdown. A good example of this was Books Upstairs, something of a Dublin institution, an independent bookseller with a very limited online presence. Deprived of the joy of browsing for books, they appealed to their book-loving customers with “book bundles.” Using a simple mailchimp landing page customers could choose from themed book bundles which were selected by members of staff. Part of the thrill was the low-tech way in which things unfolded, delivery times were longer than Amazon and there was excitement in not knowing what would arrive. Staff members had to maintain social distancing and the store was only opened occasionally to allow them to select stock. Books arrived individually wrapped in magazine pages, tied with twine and stamped with the Books Upstairs logo. The lucky dip element created a buzz on social media channels like Instagram and Twitter. Books Upstairs has reopened but they continue to offer the book bundles online. This has allowed them to reach customers further afield than would usually pass the doors of their D’Olier Street shop.
Advantage of online retail: knowing your customer
Another advantage of having an online presence is that you have additional customer data that you can analyse to increase sales and profitability. Physical stores can tell from past experience when the busy times are – during the day, month and year – and plan their stock intake and staffing accordingly. However, unless the store has a loyalty card scheme or some other way of tracking their customers’ behaviour, they may not know too much about the rest of their lives. Online shopping can offer extensive additional data to retailers. From the website analytics retailers will know which pages shoppers return to view, which items they spend more time looking at and which items they add to their virtual carts. If customers “abandon” their shopping before completing the online purchase they can retarget their marketing towards the shoppers. The beauty of online trading is that retailers can also A/B test different landing pages and campaigns without investing a lot of money. Different segments of customers can be targeted in ways that are most likely to appeal to them, even down to targeting them at specific times of the day and on different channels.
Things to consider before deciding
Like all business strategies, deciding whether to offer online trading or to move to a physical store requires a cool head and careful analysis. They say you should never let a crisis go to waste and the pandemic has certainly provided a crisis for retailers. Here are some questions to help you to think about whether offering online trading is right for your business.
- Can I stand out from the crowd?
- Can I integrate my existing point of sale/stock management system with an online system?
- If not, am I ready to upgrade to a system which integrates with an online system?
- What is my overall marketing strategy and how does online trading fit in with that?
- Do I have the skills needed to manage this?
- Am I willing to learn or to pay someone else for this?
Do your research. Look at other retailers’ online presence, both your competitors and completely different businesses. Talk to ecommerce and web design companies (and listen to my chat with Paul Dunne of Flyingfish.ie here). Ask your LEO about what training, funding and feasibility grants may be available to support your business to make the transition to online trading.
Trading online will take time to get up and running. You’ll need to watch and wait to decide if it has worked. It’s not a quick fix and like all things in retail it is no small task. It takes time and money but can be done gradually. And it has the potential to open up your business to a world of customers beyond your physical location.
If you’d like to talk to me about your retail business strategy contact me.