Don’t get left behind in online dash for cash
No doubt by now you’ve done some shopping online, bought some CDs, ordered some books from Amazon, maybe even participated in some online auctions. What was your experience? Probably your first foray into online shopping was at a trusted site, purchasing a product that you knew could be easily be delivered, and if it wasn’t up to spec would be a cinch to return. This customer experience is what we expect in the bricks and mortar world, as well as the online space.
So now take some time to think about your business. Do you have an online presence, or is your primary contact with customers through a traditional store shopfront? When your customers go online can they find out everything they need to know about your goods and services, or if you really analyse it, is online not on your radar as a way to grow your business? If you’ve been slow at recognising the opportunities an online presence can bring to your business, it’s time to ask yourself – what’s holding you back?
Australia lagging behind
At the Federal Government’s recent Online Retail Forum, Senator Stephen Conroy revealed that Australia is lagging way behind international competitors in the online retail space, with a staggering 58.5 percent of Australian small businesses not even having a website, and of those that do, 72 percent leave their customers high and dry by not offering sales or transactions online.
There can be many barriers to getting your online business in shape; hard work and time especially! Most often the feedback I hear from small businesses is that the start-up costs are too high to move into ecommerce: the cost to build an online shopping cart, hire a third party payment gateway or open a merchant account and drive traffic to the site. The merchant fees from the banks for credit card transactions (such as MasterCard, American Express, Diners Club and Visa) are often the big stumbling block. Many businesses simply feel that with tight margins, as well as the other costs, a move to online selling will mean taking too much of a hit to the bottom line. But is this a real concern? For example, when considering the transaction fees, I tell small businesses that three percent of nothing is nothing! If you don’t sell anything, then there are no transaction fees to pay – which makes it a no brainer really.
Consider the buying power
Not convinced? Think about it from this point of view. Look at the buying power that the online payment space offers. Visa, MasterCard, American Express and Diners already have in place the networks you need to streamline online transactions, with no mess and no fuss. Plus payment gateways can make sure all the funds go straight into your bank account. If you really think the fees charged are too high then do some simple maths as to how much it’d cost to set up, design and deliver a rival payment network. Suddenly the two-to-three percent fees don’t seem so bad do they?
Next, consider what growth you are missing out on if your business is not online? According to Forrester Research, sales by Australian-based sites are set to soar to more than $33 billion by 2015 – nearly double the $16.9 billion made last year. We’ve all read the recent press about Australians spending more time shopping online, and there’s no doubt the market is booming. In fact it is evening up the playing field for smaller businesses to compete with the likes of Myer, David Jones and the larger ‘bricks and mortar’ retailers.
It’s not going anywhere
Need some hard stats? For example, we’ve found that on average, eWAY’s merchants saw an increase in revenue of 74 percent over two years after they started accepting online payments. Would you like to see this type of growth in your business, just by opening it up to new customers locally and globally? It’s definitely worth considering or at least re-evaluating your online strategy.
And let’s not forget what’s around the corner too – mobile. Global creative network DesignTaxi recently reported that the mobile commerce industry that stands to see the greatest boom in popularity in 2011. So a move online now will put your business in good stead for the next wave online too.
I suggest now’s the time to compare the expense of setting up an online store, and the potential sales gains, with the infrastructure costs associated with a physical shop – one you’ve taken the hard yakka to do already – rent, electricity bills and public holiday wages must all be taken into consideration. Next think about how the online market set to explode, and if you still think the merchant charges are your final stumbling block, then ask yourself what’s a two-to-three percent charge in order to grow your business? Nothing.
Tips from someone who has been there and done it
Bjorn Behrendt is co-founder and managing director of StyleTread.com.au. With a strong background in online enterprise, Behrendt identified Australia’s growing online retail revenue early on. He saw the opportunity for a comprehensive online shoe store that prioritised ease and convenience using state-of-the-art web technologies and customer service processes, as well as free delivery and returns.
He launched the business with co-founder Mark Rowland in November 2010 amd StyleTread is already Australia’s number one online shoe store, leading the market with its fast and free delivery,100-day free return policy and a 100 percent record delivering shoes within three working days to every state and territory in Australia.
Bjorn’s five top tips for online retail start-ups
1. Set up a Google AdWords account and Google Analytics conversion tracking to manage as many relevant keywords as possible on a daily basis.
2. Use Google’s Insights for Search and Keyword Tools to analyse search trends and consumer interests.
3. Analyse best practice from the US and Europe and implement it quickly on your own site.
4. Get the basic SEO and HTML structure of the website right and create good content every day to get free traffic from search engines.
5. Use Facebook and Twitter as support channels with a team member answering customers in real-time.
–Matt Bullock is CEO of eWAY. a leading payment gateway solution.