The internet is rapidly becoming the destination of choice for most shoppers, putting more and more pressure on the more traditional bricks-and-mortar establishments to keep pace with their online rivals...
Compare popping into any sort of retail outlet at rush hour to casually browsing online with the world at your fingertips and it becomes patently obvious that convenience is number one on the list of most consumers priorities. But how convenient is it for businesses to move online in the current climate?
Why - and How to - Make the Change?
Back in 2015, the United Kingdom had the third largest e-commerce market in the world and with roughly 80% of internet users doing their shopping online, the UK has the highest online shopping penetration in Europe. What's more, the costs associated with running a shop such as employing full-time staff and paying various bills means that items are often marked up in order to make up for this deficit. As a result, online retailers can undercut their rivals by dropping the price of their products, effectively shutting out competition from brick and mortar outlets.
As with any large-scale operation, a company must have a sound business plan before deciding to move their offline business online. Developing a strategy and setting short-term goals is also an important part of the process and there are many tips available for business owners who are a little sketchy on the details when it comes to developing an effective market strategy. It's important to note that when starting out online, a business website is everything and represents the identity of a business. However most businesses realise that overcomplicating their online operations can be intimidating to customers and as a result, most employ the K.I.S.S method ("keep it simple, stupid") in order to help consumers navigate their web page much more easily.
Consider Google - the website simply has a logo and a search bar and yet remains one of the most successful homepages of all time. In the current technological age, businesses are also aware that being social media savvy is everything to consumer and companies such as Hubspot have successfully launched their business through intelligent content marketing which included plenty of interaction through social media. In just four years, Hubspot increased its revenue growth from $2.2 million in 2008 to $52.5 million in 2012 and this is just one of many examples of a company using every tool at their disposal in order to make their foray online a success.
The Challenges and Drawbacks of E-Commerce
Moving online can be tricky, especially for smaller businesses who often don't have the capital to hire a professional web designer for example in order to get the ball rolling. Whilst up and coming e-commerce platforms such as Shopify and BigCommerce have been game changers for smaller ventures in recent years, the costs associated with building an online portfolio can be high - not to mention all the sleepless nights and headaches for those undertaking the task. It's often difficult for businesses to directly transplant their physical, in-store operations online (and vice versa) without some degree of differentiation and a lot of hard work.
What's more, while many of us don't fancy queueing up for an eternity in a shop with a room temperature hotter than the sun, a good amount of customers still enjoy the experience associated with physically purchasing items. With regards to clothing, in particular, the importance of being able to try before you buy cannot be understated. In a recent study by Barclays, 57% of online retailers reported that dealing with returns forces them to protect their bottom line by either charging for delivery or increasing the prices of items full stop - when all is said and done, higher prices will keep consumers away no matter how good the product or service is.
Finding the Right Balance
Whatever the approach, it appears that selling exclusively online or in the high street limits the potential of a business. As a result, more and more retailers are finding ways to overcome the hurdles associated with the in-store experience, giving customers a wider variety of options. It seems that many brands at the moment are choosing to have both an online and a physical presence.
This has been seen recently within the gaming industry, with companies such as Buzz Bingo offering customers the chance to play a wide variety of games online or at their more traditional brick and mortar outlets. Additionally, sporting companies such as Nike are attempting to make their high street experience more user friendly by allowing customers to customise their items in store and pick them up within the hour - a pretty big deal considering consumers used to wait up to a month for their products after completing the same process online. In the UK luxury market, MatchesFashion.com maintain a few London showrooms in order to showcase their products but their sales aren't reliant on in-store purchases. As a result, the company has a firm grasp on their data and can more accurately predict stock, demand and other trends.
Consumers are Unpredictable
Market trends are difficult enough to forecast on their own. However, it's virtually impossible to accurately predict where consumer trends and loyalties will lie in the next few years. For now, it seems that the best approach for businesses is to keep a keen eye on their high street operations whilst continuing to operate online in some capacity. Customers are quite prone to changing their mind, and the modern day business must be flexible and adaptable enough to deal with these changes whenever they occur.
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