Henry Goettler, global business operations manager for eCommerce software vendor Intershop, says businesses have a choice – either move online or fall behind the rest of the world.
Goettler, who will be speaking at the CeBIT conference in Sydney next week, says online retail is changing. Australian small businesses aren’t immune from the trend and need to adopt a multi-channel strategy to survive, Goettler says, and need to innovate or risk losing out to international business targeting the local market.
What are the big trends in eCommerce right now?
There are some big challenges in the IT sector. Over the last decade, a lot of technology has been developed to enable eCommerce for businesses, but there is really a second wave occurring at the moment, and challenges are coming out of that. What I mean by this “second wave” is that things are becoming more complex. Businesses need more application to get things working, technology is moving very fast and making a huge difference, and there are a number of different ways for businesses to sell online. This is making things that were unsellable now available for the market online.
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An example I use is the iPod. Ten years ago Steve Jobs came out with this technology. Before that, there was music, but file sharing was making it more difficult and people said “you can never sell music online”. But Steve Jobs created a piece of technology that allowed people to sell music, and you see the next wave of that coming with online stores selling all sorts of things.
Some people suggest larger items can’t be sold because people want to see them in store. What do you think?
I remember people telling me that shoes could never be sold over the internet because people would need to try them on, walk over them, and so on. But today – this happens all the time. People say users want an “experience” like being able to touch and try things, but for a lot of products they just don’t care. Groceries like toothpaste and toilet paper, more of these things will be sold online.
The second wave will see bigger and more important products sold online, as I said before, like shoes. New business models are allowing products to be sold that weren’t traditionally sold online. Even things like furniture.
Should businesses be online, or offline?
I certainly don’t think it’s one or the other. Both channels are enabling each other, and there are good statistics available for that.
If you are a bricks and mortar store today, and you are going online, then you are going to help your business, there is no question about it. Put the store online and it drives businesses, and in certain circumstances the other way around.
To some extent there is a little bit of conflict, yes, and a cannibalising effect, but the effect of the greater sales outweighs that. I think what we are seeing now as a part of this new wave of eCommerce is a much more multi-channel approach.
Why is being multi-channel so important?
For being multi-channel in general, people’s behaviour has changed in how they search for things. About 80% of the population is online, opposed to a decade ago, and people are using the internet for their day-to-day lives.
A good example of this is with my kids. I describe to them that Google is only about 15 years old, and they ask me how the world worked without it. I laugh, but if I look at my own habits, if I need to know something or search for something I go straight to the computer. Because of this shift, there is absolutely no question about it – you need to be online.
People like social events, and I don’t think that is going to change, so we’re always going to see shops and that sort of thing. But for commodities and things that you don’t need to see or touch, the online world is going to be the dominant force there. And a mixture of both is going to be the best strategy for businesses in those sectors.
If you’re an online business, what should you be doing to increase your sales?
For being online there are two major strategies you need to look at. The first is ease of use – don’t make the buying experience complicated. People want to buy, and they want to buy quickly, so make sure it’s easy to use and that sort of thing.
On a side note of that, make sure you have a full assortment of products. If you are a brand online, a retailer or whatever, make sure customers have access. The expectation is that if they search for something they will find it, and if you don’t have something they will easily move on. So just make sure they aren’t disappointed in that regard.
The second thing is internationalisation. It isn’t just your local market you need to look at. If you can bring your products internationally, then you are going to have an entirely new market and that’s the way the winds are blowing these days anyway. Look overseas.
What are the biggest trends you see happening in eCommerce over the next few years?
What you are going to see is massive international approaches by companies. You are going to have a lot of brands in their own countries, and then they will be speeding up the international approach side of things over the next couple of years. We will see companies start to promote their brand across the world, and they will be defined as “global”.
The important thing for those businesses is to make sure their image and brand is clear, and the same across the world, including bricks and mortar. Being recognisable is a huge factor.
The second big trend will be in eCommerce, we are going to see innovations in the way people actually do business. Companies will trade with each other on new platforms. To give you an example, we’ve been building an example for architects to do business with building suppliers in China directly through the internet, where suppliers bid for projects and so on. We will see more of that.
ECommerce is going to become international, that is a huge trend, and we are also going to see so many more options on the web for consumers, so it’s a good time for online commerce.