You’ve got your brick-and-mortar business established and now you’re looking to diversify your presence with a digital storefront. Smart idea. In fact, many of the small businesses that survived the economic recession of 2008 did so thanks to their online store. The typical storyline goes like this:
- Retail location opened sometime before 2005
- Between 2005 and 2008, launched a small online store as an experiment
- In 2008 and 2009, retail sales dropped, and the physical retail location closed. Suddenly, focus went to online only.
- Today, the online site has exploded and the store is increasing YoY revenues with enough to reopen a brick-and-mortar with one caveat: in-store revenue will be less than their digital sales. Ecommerce is just that good.
The ecommerce return on investment isn’t super high only for those that opened an online store years ago. Here’s the thing: though numbers vary from business to business, brick-and-mortars that open an online store are making 28% more in revenue* via their online channel in just six months. And no, they aren’t spending that extra cash on hiring someone to manage the online store.
Brick-and-mortars that open an online store are making 28% more in revenue.
Today, ecommerce platforms are sophisticated and can sync with your in-store inventory management system and help you generate traffic to your site with impressive SEO capabilities, built-in blogging platforms, email alerts and even abandoned cart savers, which can recover 15% of your lost sales.
So, where do you start?
You have two major options: build your own ecommerce site or join a marketplace akin to those supported by Amazon or Ebay. Better yet, in today’s ever-evolving ecommerce industry, you need to do all of the above.
Building an Ecommerce Presence
If you are already in the retail space and doing quite well as is without much of a digital presence, jumping onto a marketplace will increase sales, but won’t benefit your brand in the long run. For the marketplace provider, your brand is just one piece of a much, much larger puzzle. In fact, a marketplace solution is very similar to a wholesale solution, in which your brand is privy to the preferences of the stores that sell your items.
Your best option then, is to claim or buy your domain name and open up shop online in addition to your brick-and-mortar. In fact, already having a brick-and-mortar presence puts you far ahead of the pack when it comes to brand awareness, product photography and business strategy. The only additional needs you have for a successful ecommerce presence is a point-of-sale provider that easily integrates with both your online and offline sales, in order to properly manage your inventory.
Managing the Marketplace
Having your own ecommerce presence is ideal, but you’ll also want to be sure to utilize all of your marketplace options. The idea here is simple: get your products in front of the widest possible interested audience. Amazon, eBay and Etsy are certainly good marketplace options and, if you have the time availability, paying a little extra attention to your customer reviews and overall store design within the marketplace could have serious ROI improvements.
That said, you don’t need to have your products listed everywhere. Find the marketplaces that work best for your store and then optimize for time spent in order to weigh which platforms are worth your attention in the long run.
Helpful hint: most ecommerce solutions have integrated Google Shopping apps or functionalities, in order to get your products to the top of search.
If inventory management is a concern for your particular store, focus your attention on building digital brand awareness via marketing rather than on marketplace viability. Inventory management via marketplaces isn’t as synced as it is for owned ecommerce and in-store purchases, and without proper overseeing, could easily damage brand reputation based on a lack of product. Within these marketplaces, customer reviews carry a lot of weight and not being able to ship out an item that was seen as available on a marketplace isn’t a good way to start out your marketplace viability experiment.
In fact, at National Retail Federation’s annual Big Show, dubbed #NRF15 on Twitter, customer reviews were a popular topic. Turns out they aren’t just popular on marketplaces, but for the emerging generation as well.
— Tracey Wallace (@TraceWall) January 12, 2015
Overall, for brick-and-mortar businesses looking to increase revenue in 2015, look to ecommerce as your solution. With an average 28% increase in revenue* in just six months for already existing brick-and-mortars, along with a digitally motivated emerging audience that expects omnichannel presence and touchpoints, you’re losing out if physical is your only presence.
The marketplace ecosystem may look like low-hanging fruit, but the lack of advanced inventory management software combined with a lack of brand ownership pokes a few holes in a strategy that utilizes marketplaces as the only needed ecommerce solution. Instead, own your brand name, build a site and utilize marketplaces to expand your reach. It’s about long-term return here, and owning your brand voice and presence at an omnichannel level is how you do it.
*This number is based on data from the online merchants shared between Zing and Bigcommerce.
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