Could you be retailing online 1 month before Christmas?

Is it possible to set up an online retail store in time for Christmas?

With less than a month to go before Christmas, and probably just three weeks to sell online, I won’t shy away from saying it’s a tall order.

Setting up a rudimentary online store can be done very quickly, but before going ahead SMEs should make sure they understand exactly what they want to achieve through selling online.

What kind of investment would it require?

At its most basic level, marketplaces such as eBay or Amazon Marketplace require a very small upfront cost. In fact, the main investment needed here is the time to upload products and manage orders and inventory.

Many SME e-commerce solutions operate a tiered pricing system. These typically start at less than £10 a month and increase in cost as the retailer adds more products and sells more. However, they also usually reduce transaction costs as sales increase, so in reality your profit margins will increase as more products are sold.

SMEs should not underestimate the investment of time and resources that can be required as their e-commerce presence grows. Once it reaches a certain size there is no way a small business owner can do it alone and they should hire an e-commerce manager to help with their efforts. 

Is it better for businesses to develop their own online presence vs. using a site like eBay?

All businesses should have an online presence, but the key question is whether they should have their own transactional site with full capability.

In the long term there are more benefits to be had from developing your own e-commerce site. However, this has to be weighed against the objectives and aims of the SME in question. The value of having your own transactional site depends on how much is actually being sold online, versus the time and money invested in developing the site.

What level of business does an SME need to be doing to go its own way?

Rather than focus on size, product range or number, SMEs should focus on customers’ needs and the competition their store faces.

It is much better to start in a niche where there is room to compete, rather than look to sell a huge array of products which get ‘lost’ online. Retailers should start small with a quality offering, which they can always scale up when needed.

How easy is it to set up online retailing for mobile?

Many off-the-shelf services or marketplaces will already have mobile functionality built in. Over 20 per cent of the 30m smartphone users in the UK use their device for shopping, so this massive market shouldn’t be ignored.

When choosing an off-the-shelf website provider, it’s important to look for one that has mobile commerce functionality, and is constantly updating their product. That way the provider will make the site more capable as technology and consumer habits change.

What can businesses do about postage and packing? What’s the winning strategy?

Retailers should really look at their margins here. When first setting up an e-commerce presence, product selection is key. Depending on cost, size and volumes, business owners can choose from multiple shipping and courier services.

It’s also really important to make sure customers know exactly how much delivery and returns will cost them. Reasonable cost and delivery times are a big factor when making online purchase decisions.

What data should be collected by retailers and how can this be carried out?

The two most basic ways to collect data are through web analytics and some kind of customer relationship management system, which usually comes in the form of an email list.

Google Analytics is a good place to start. It’s free and there’s a huge amount of information online. Then look to create a newsletter through a free or low cost email provider. Having a prominent ‘sign up’ call to action on a website homepage helps attract an interested audience and will help collect customer contact and purchasing information.

How can retailers provide shoppers with advice and a better online shopping system?

Go social for advice. SMEs should encourage their customers to ask questions on social media because it’s free, good for marketing and generates a large reach.

What deals and promotions work well for online retailers that are just starting out?

Although it may be tempting, SMEs should steer away from offering steep discounts for new customers as this may send out the wrong signal. Instead, look for other ways to increase value, such as free gifts. For example, Boden ships a small handbag and notebook free of charge to their customers on their first order. This leaves a lasting impression without training customers to expect money off.

Social media advertising can also be very targeted and cost effective. Typically small businesses could have success by spending less than £10 per week on Facebook advertising, although there are many variables that need to be considered.

Andrew Warren-Payne is a senior research analyst at Econsultancy.

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