Many physical shops have an online presence as well as a shopfront, so you can visit their shop or go online to their website and purchase the same goods.
Online sellers open up their market to a lot more potential customers. If you are a physical bookstore, you can sell books to people who come to your physical shop and buy them. If you offer online sales, you can post the books to customers anywhere in the world, but postage costs may be prohibitive. If you sell eBooks, then customers can buy them anywhere in the world and download them without any postage costs.
The most effective way to sell may depend to some extent upon what you are selling; however more mainstream businesses now sell online than ever; and to ignore the potential for online selling can be a perilous mistake for any business today.
A good example of a physical shopfront business that also effectively utilises an online market is that of Tescos in the UK. Tescos (a supermarket) recently launched a mobile “shopfront” at Heathrow Airport. The billboard style sign allows customers to search through images of groceries and scan barcodes of the products that they wish to purchase and then have those products delivered to their doorstep on arrival either at their destination, or when they get home from their holiday. Anyone who’s ever been on a long holiday knows what it’s like to arrive home either to an empty fridge or one full of mouldy food. This marketing technique fills that need.
As mentioned above, local, regional and even national retailers are coming under increasing pressure from online shopping. Every day traditional retailers are closing down due to this pressure. Department stores in Australia in 2012 are currently identifying a loss in market share caused by customers purchasing goods online from department stores in other countries. Despite the distance, the John Lewis online store in the UK was guaranteeing Australian customers a faster delivery than David Jones was guaranteeing within Australia. Clearly the dynamics of competition, in this instance, were changed by the online shopping phenomenon.
Starting an online business is not a ticket to instant success! Like any other mode of trading an online business, needs to have a business plan and a marketing plan. It also requires knowledge of how the online selling process works, how to capture and retain customers (as already discussed) and how to utilise all the forms of media available at your fingertips to your business advantage. You also need to know the advantages and advantages of operating an online business, plus the associated costs and the potential pitfalls.
What do you need to set up an online store?
There are a myriad of packages available that are fully integrated and simple to install and run prices range from a few hundred dollars to several thousands of dollars a month depending on what you include in your package.
The following are the basic requirements:
- A registered domain name.
- A social media presence (social media accounts, active and being used appropriately)
- A well-designed web page.
- A business email address.
- A secure web host.
- An ecommerce system (including a shopping cart) with integrated analysis (these can be bought as packages).
- An internet data plan that is appropriate to the size of the business.
- Electronic security (e.g. SSL [secured socket layer] encryption – this is very important if you are offering customers credit card payments services). SSL certificates are issued (by software providers) according to your business needs.
- Search Engine Optimisation (SEO) and Search Engine Marketing (SEM); these will optimise your ranking and your marketing however be wary as this can run to many thousands of dollars – make sure that the package you chose to set up your store has this integrated as part of the software rather than as ‘add-ons’ which are a lot more expensive. This is potentially something you can waste money on, so be sure to engage people with an established track record; and do not let them work on your site until you are certain they properly understand your product and customer demographic.
- Payment providers such as credit card providers and a merchant bank account
- Payment gateways (that are integrated into your website) – there are many payment gateways you can use for example such as PayPal, eWay, SecurePay etc. Although not all online stores use payment gateways if you want to accept credit card payments it is far more secure to do so through a payment gateway. Credit card information is very strictly regulated so you must understand these regulations and abide by them (you can source this information by contacting the various banks etc. that offer credits cards). You need to set up an an account with the payment provider.
- Appropriate software licenses. Do not try to save money with illegal copies. You are more likely to be caught than what you realize.
- A delivery system e.g. couriers, postal system etc.