Ecommerce Isn’t the Future.
A mix of ecommerce and retail is.
Do you remember that time when everyone was panicking over the death of radio? Well it didn’t happen. Radio re-invented itself (a little bit), went local and flourishes, while holding it’s own against podcasts.
The same thing will happen with brick and mortar stores because retail has some advantages, just like radio did.
And for online stores, ignoring it is letting an easy advantage go waste. Retail is going to change, adapt and find it’s own niche just like radio did. (Note: If you want to read more about how this transformation is already happening read more in this post by our API team.)
If you are wondering..
How that is even remotely Useful for a Ecommerce Store Owner
Well, it is useful because while big ecommerce brands can open their own showrooms, a smaller Shopify store can get an edge by understanding what works in retail and mimicking those advantages on their online store.
A lot of the now successful brands like Dollar Shave Club and Warby Parker actually did co-opt some physical retail advantages. For example, Warby Parker allowed customers to choose 5 options and delivered those so that customers could physically see their choices before picking one.
Retail has Some Real Benefits and Ecommerce is Hard
There are hardcore loyalists who claim that it’s in-store or nothing. And industry veterans who always advise clients to go brick and mortar rather than online store. In all the noise about Amazon taking over the world it is very easy to miss these voices.
The things is though that they are actually right. Or rather, they are making some very good points.
Selling online has some real problems.
The conversions that physical stores see has always been MUCH higher than anything online stores can even dream of typically ranging between 15% to 20% based on different reports (here and here). And location? Oh, location is a blessing. Location can do 80% of the job for a retail store. Stores will always have walk-through traffic and if it’s correctly placed in a neighbourhood then a (good) thing will sell itself.
So those are the amazing things about retail but there are some pretty not-amazing things as well. For starters, there is rent.
The rent for a fully functional Shopify Store is $29.99/month.
For a retail store it would be a 100x that. At a minimum. In a sorta-okay-not-fabulous place.
Getting setup with a store would also take lots of logistical planning and expenditure. If you store isn’t bright enough people won’t walk in. If the items aren’t place correctly people won’t notice them. If the decor doesn’t match your brand then customers will be confused. The list goes on and on.
So I’m definitely not saying, go retail. I’m saying, stay online but get the best of both worlds.
Get all the benefits of a Retail store on your Online store
Setting up an ecommerce store is easy — having a successful ecommerce store is not so easy. Our experience working with stores shows that there is a pretty steep curve to success — which a lot of the stores aren’t able to overcome.
But ecommerce businesses are agile, adaptable and more financially accessible for entrepreneurs. And is it the this agility and adaptability that should form the bedrock of your successful business.
Online stores can easily leverage the advantages that retail has by adapting them to ecommerce specific use-cases.
How do you do it?
Have a mixed bag — online store + pop ups based on popular locations
We’ve seen stores that are based in Greece and selling to customers mostly in Florida. Now imagine if he could do a pop-up once a year and take those conversion rates from an average 2% to a whooping 20%?
When you already know where you customers are coming from you know where to go.
Use your analytics to keep tabs on where you customers are coming from. Google Analytics gives a breakdown of the locations for website visitors but since it is anonymous data it’s hard to move beyond vague projections. Ideally track not just the popular locations but also who it is that came from these locations. That way when you decide to attend a trade show in Phoenix you can also inform customers that you’ll be in town — and maybe do a pop-up!
Use this not just for locations but to figure out which fairs, trade shows and markets it will be worth attending. Physical stalls or pop-up stores are demanding and taxing. But they can have excellent conversion rates if you are able to go to an audience that already knows you.
2. Use all that extra cash and market, market, market
Use those TONS of saved rent money to sustain yourself longer and spend on marketing
You’ve already saved money by starting an online store. Use it, and use it wisely. Market on relevant marketing channels and make sure you get the word out. The most effective marketing techniques tend to be:
Of course, this depends on multiple factors like your niche, target audience and type of product. But hey! You can afford to experiment and A/B test now.
3. Be everywhere like Starbucks
Starbucks took 25 years before they opened up in international locations. You don’t have to wait at all before expanding internationally. Unless you’re selling hot coffee — then just mail me, we’ll chat.
Point being, you can be based in Vermont and selling a majority of your skin care line to customers in France. Or based in Ottawa and selling to people based in Australia. Not being bound by your physical location is the obvious advantage. There is another bigger and much better one — not being bound by your physical look. You could be one person operating your store and yet ensure that your customers get the same stellar experience that the high-end brands deliver. Get help from apps — here’s a great article by Dafina Smith, an entrepreneur and stay-at-home mom on how she leverage apps to help maintain a professional front to customers while mothering twin boys.
Give your customers a million dollar experience on a $5 budget.
That’s the key to earning their love, and getting that love is always the key to success in any business.
4. Understand your Customer as well as You Would in a Shop
How to understand them? Follow them around.
Sure, no one likes going into a store and turning to find the sales assistant following you like a shadow. That’s why the best ones ones don’t interfere. They just observe from a safe distance and step in only when they sense you need help. It’s a superpower really — helping without interfering.
And that’s what your aim should be on an online store as well. Observe discretely. Learn based on what you see. And step in to help the customer at the appropriate times. This means knowing what pages your customers browsed, how many times they visited the store, what they added to the store, what they’ve bought or not bought in the past.
That’s where we can help.
Semantics3 Analytics is an ecommerce analytics tool that tracks everything on your store.
You can see where you customers come from, who they are, what products they viewed and how many times they viewed it. You can then use this information to, 1) figure out which locations most of your customers are coming from, 2)which marketing channels are effective, 3) when to step in an offer more information to a customer that will help them make a decision and so much more. Basically, you can really know your customer. Better than a retail store would.
If you want a personalized walk-through for our dashboard just drop me a note.
Written by Anjali Krishnan and the Semantics3 team in Singapore and San Francisco.
Published at: October 31, 2016