Long after you have closed up for the day at your “bricks and mortar” premises, your online business will still be there, canvassing potential customers and making sales. It is your 24-hour, seven-days-a-week selling tool. Its beauty is that you don’t even need to pay staff to be there to do it.
It allows you to provide a service, which will fit in to whatever lifestyle and time constraints your customers have. And in essence, your customers will be doing most of the work for you by showing themselves around the site, gathering their own information and going through their own ordering process.
This makes it very easy for you to cater for customers’ demands. A Web site is very dynamic. Unlike any other business, your Web site can change to suit your customers’ needs virtually instantaneously. Prices can be changed, products can be added and it just takes a few minutes at a keyboard.
Cheap and effective communications
With the Internet you have a highly effective customer communications tool. The Internet will allow you to improve customer communication, give prompt customer feedback, allow you better access to customers and provide an excellent platform for promoting your products.
Communicating with customers in your offline store can often be difficult, time consuming and expensive. This may have made it difficult for you to properly service your customers. For example, follow up calls can be time consuming. However, with the Internet it can be done in a split second via e-mail (electronic mail).
E-mail is an excellent and inexpensive communications tool you should put to full use. It can be used as a promotional tool to alert customers on your mailing list of a new product or changes in pricing.
You will also cut down on printing, telephone and advertising costs. While it is still important to maintain a certain degree of traditional marketing and advertising methods, the Internet offers a variety of alternatives.
You can send out electronic catalogues and flyers. Instead of printing out letters and sending them, you can e-mail as many customers you want with the push of a button. Instead of sending out blanket information about your business, you will be able to tailor it to meet customer queries, needs and expectations.
The beauty of e-mail is its speed. You can respond quickly to customer complaints or questions, which will boost your customer satisfaction. It will also allow you to deal with your suppliers more effectively and provide a much more streamlined approach to your business operations.
More and more suppliers are taking the computerised approach to placing and filling orders. The Internet allows for faster communications between you and these suppliers.
Initially there will be a lot of outgoing costs when putting your business online. You must remember that this is a long-term investment and its financial rewards will come. In terms of cost savings, you can expect to see these as more of your business is done online. They won’t be evident in the first week, but will filter in as your business becomes more streamlined.
Firstly, consider the market exposure you will get by going online. Then think about how much it would cost to set up a “bricks and mortar” store with the same exposure.
The costs in setting up your Web site are low considering the likely returns and savings you will make.
Once your Web site is operating, you will not have the traditional costs of an additional store like rent, lease, electricity bills and rates. Of course, these will still apply to your offline store. But your online site will be making money with considerably reduced overheads.
The Internet will also help to reduce costs when it comes to ongoing marketing and advertising. For instance, you can quite easily ask for customer comments and feedback on your Web site. This is instant market research at no real cost to you. You can then find out what products/services are working and what might need to be changed.
Other cost savings will come when your business operations are streamlined. For example:
Staff time spent answering calls and fielding questions will be reduced. Your customers should be able to get most of the necessary information from your Web site
Staff can spend time on other areas of your business improving productivity
Advertising costs may fall as your Web site begins to take hold.
Depending on the nature of your business, e-commerce may also help to cut out the middleman from the supply chain. For example, if you own a hairdressing salon, a Web site is a great way to promote your business, your specials and for customers to make bookings. By being Internet savvy you could also save yourself money.
Say your suppliers are developing an Internet order-fulfilment program and salons which place orders via the Internet will be awarded substantial discounts. By taking advantage of this, you can save time and money. Additionally, you won’t have to rely on the local rep calling to find out about the latest special offers.
Larger market for potential customers
It would be wrong to think that the Internet was not having an impact on your business. Anytime a sale is made online it impacts on you, especially if it is in your retail area. Online, you are coming up against all sorts of businesses. You can ignore it but you can bet your bottom dollar that your competitors won’t be.
And now you can no longer think of your competitors as those in your neighbourhood or even the same state. You are facing competition for customers and sales from the other side of the world.
One example is a bookstore which used to be featured on the Ninemsn Web site. Although NineMSN is an Australian site, the bookseller was American.
So even international businesses are linking into major Australian shopping networks to get a slice of the action. Of course, this is the nature of e-commerce and as a small business operator, you should be prepared for it.
However, when you get online you too have a greater market presence and therefore, are reaching a lot more customers. In order to make full use of this greater exposure you will need to devote time and energy to turning your online prospects into online customers.
That new product you were considering supplying or making, but thought there may not be a market for in your area, may be more appealing online. Selling via the Internet potentially means more customers, which leads to more business, but it doesn’t necessarily mean more work.
Generate more sales
The way you generate sales is only really inhibited by your own imagination and ability. With e-commerce there are plenty of “tricks of the trade” when it comes to selling online. If you think your offline business may have reached its “maximum” in terms of market saturation and attracting new customers, e-commerce may give it a new boost.
With e-commerce you have an additional 24-hours sales machine at your disposal. And with research predicting a boom in the number of Internet shoppers worldwide, it will mean a growth in your bottom line. The bonus for your business is that your online store will be promoting you.
You will also be able to more easily track customer needs through your online business. This can be done a variety of ways, from customer feedback surveys and e-mail to specialised tracking software. This way you will be able to provide better customer service and satisfaction. This will help to attract and keep the customers coming back.
E-commerce strategists say customer service is the biggest key to generating online sales. At your “bricks and mortar” store you have the opportunity of a one-on-one experience. You can wow customers with your sales pitch or “read” them to know if they are genuine or not.
Not when it comes to e-commerce. The shopping experience must be made as easy and as pleasurable as possible for the Internet shopper.
Increased awareness of your company and product
Imagine your company and your product being on bulletin boards in every capital city in the world. Well, go one step further. Imagine your company and your product on a bulletin board in almost every house around the globe and then you might have some understanding of the Internet and e-commerce.
Your Web site should be your number one sales tool. The information it supplies online shoppers will be invaluable. Even if Internet users are not specifically looking for you or your product, you will still be able to get their attention. And by doing so, if you put your Web site together properly, you will make a sale and gain a valuable customer. Your Web site will help to create brand awareness and encourage new sales. It can also be used to create new business collaborations or investments.
Selling products online may not be for everybody but the Internet is an excellent way to inform potential customers about your business and your products. That way people will still be well informed and be able to make a decision whether you have what they need. By being on the Internet you have harnessed new customers. Rather than people not being aware of your existence, you are now building a name for yourself.
Having your catalogue or brochure online or even telling customers what is coming up or having a “what’s new” section will help keep their attention.
Your Web site will help you:
Win new customers
Promote your products
Take orders and appointments online
Distribute information faster about your company and products
Give better customer support and service
Develop relationships that may lead to new customers or investments
Develop a better relationship with current customers
Set up a faster, more efficient internal communications system for your business
Sell advertising space on your Web site
The pros and cons of disintermediation
Disintermediation is a selling tool used on the Internet to make more money. It has long been a buzzword in the e-commerce world. It is the seemingly simple, yet sometimes complicated, task of cutting out the middleman.
In a nutshell, strategists say the Internet will revolutionise the way products are bought and sold, and that disintermediation is the driving force behind this. This is already happening.
Disintermediation is basically the removal of the intermediaries in e-commerce transactions. By removing the middleman, companies can sell the products cheaper and faster. They can sell them straight to the consumer via the Internet. However, depending on the nature of the business, disintermediation has been more of a hindrance than a help.
Take Levi-Strauss and its experience with disintermediation. After investing millions of dollars in an online venture to sell its jeans direct to the public, it had to close down the Web site and revert to the original sales structure or risk losing even more money. There were a number of problems Levi-Strauss identified when it came to dealing direct with customers, especially customer service:
The problem with dealing direct with the customer is mainly the customer.
Problems with handling small orders, (which are more often than not in large volumes), handling returns, shipping and all the other customer service issues.
Keeping thousands of people who have placed orders for a single pair of jeans happy was harder than keeping a few large retail chains supplied and under control.
Again the issue of disintermediation comes back to the nature of your business. Disintermediation was a factor in the failure of many dotcoms. Some companies put all their eggs in the one basket only to find out the basket was improperly woven. Disintermediation seemed extremely attractive, and with dotcom experience still maturing, it was followed. The idea was that the middleman would be cut out, prices would go down and everyone would be happy.
But just like the Levi-Strauss experience, many companies just did not anticipate the outcome. They did not have the necessary measures in place to deal with the fall out and so many failed.
The benefits of hypermediation
The challenge of e-business today is to make the customers’ shopping experience the best that it can be and connecting them to all the channels, and linking to information they want, is part of it.
The bonus is you can make money from doing it at the same time. This is known as hypermediation. Unlike disintermediation, where the middleman is cut out completely, hypermediation adds more middlemen or intermediaries.
The latest trend is to add more middlemen to the supply chain with everyone being given a financial reward for being part of the buying process. For example, let’s say a user is looking for a Barbara Streisand CD. The shopper will search the Web, using a search engine, for Barbara Streisand. The shopper then may go to the Barbara Streisand Fan Club home page where there is a link to a CD store. He or she takes the link to the store, buys the CD online and awaits its delivery.
The intermediaries who will benefit here include:
The CD distributor
The search engine operator
The home page owner who may have an affiliate deal with the CD store to receive a certain percentage of any sales that result from a user going through their site.
The home page owners may also, as part of the affiliate deal, be given a fee for the number of “clicks” generated through their home page. While each click may only be worth a cent, just imagine how it would add up when you consider the volume of people using the Internet. Everyone gets to share in the action.