March 9, 2005
On Monday, Jennifer Schiff profiled Two Jakes, a quirky
furniture business that launched its e-commerce store
last year. Today, we hear from JupiterResearch's Patti Freeman Evans
about the growing trend of traditional stores finding success online.
"Online retail growth continues at double-digit rates, and will continue that way over the next five years," says Freeman Evans. "And the growth rate of traffic to retail sites is growing at twice the rate of the rest of the Internet. That points to consumers becoming more and more comfortable with the online shopping experience. And that bodes well for small businesses who are currently playing the e-commerce game," such as Two Jakes.
Additionally, using the Internet to sell your goods can be more cost effective than traditional print advertising, says Freeman Evans, especially when you consider the cross-marketing and partnership opportunities available online.
But just being online does not guarantee success. To improve your chances, Freeman Evans suggests the following strategies:
Have a competitive advantage - something that differentiates you from other online and offline retailers. Could be a unique product, a better price, or better service. "If you have the same product that Wal-Mart sells or Saks sells, you don't have a differentiator," she says.
Be upfront about shipping costs. "If it's going to take you five days to pick it and pack it and get it ready to ship, then tell the customer that."
Don't miss your shipping date. Be patient. Just because you create an attractive Web site, have some sort of differentiator, and have your fulfillment process down pat doesn't mean the money is going to come pouring in right way. "It could be a day or it could two years [until you realize revenue from e-commerce]," says Freeman Evans. "It all depends."
"The thing about being online that's great is you don't have to invest in a real estate contract. And you don't in the initial stages have to invest in too much additional inventory," stresses Freeman Evans. "So you can test some things to find out what's going to work."
You also don't have to set up your own e-commerce site. "You could put up a storefront on eBay or on Yahoo! very quickly, and gain the benefit of the marketing they do to help small businesses grow," says Freeman Evans. "You don't have to do it all on your own."
For bricks-and-mortar retailers who are worried that an online outlet could cannibalize their existing business, Freeman Evans says not to worry. "You're going to get exposure outside your natural trade area," which can only improve business.
Moreover consumers like to shop multi-channel. They do a lot of research online, but they tend to shop offline.
"So if you're evaluating your Web site just on the basis of the sales it generates alone, that's fine.
But it also is underestimating the true value of the impact of the online experience on your offline sales, which can be very great. In fact, we think that for every dollar spent online, six are spent offline, based on research people have done online. Though it totally goes both ways - and catalog as well."
Which is very good news for businesses like Two Jakes.
Article by Jennifer Schiff,
Source: eCommerce Guide
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