Why your e-commerce website is a separate business

How many retailers fully grasp the opportunity that the internet presents?

Clearly many do. Amazon and now Alibaba lead the pack from a ‘department store’ perspective while locals like Shoes of Prey and Peters of Kensington have cleverly worked hard to own their respective niches.

But sadly, successful online retailers are few and far between compared to the number of bricks-and-mortar retailers out there.

I believe the fundamental reason for this is an inability to understand how to re-position their business for an online market.

It really isn’t rocket science.

Location, location, location restrictions

Physical stores are predicated around a location and the customers that can reasonably get to it.

Take Melbourne shopping monolith Chadstone for example.

It is so ubiquitous, offers so much choice and is so well located near the Monash Freeway that its customers are likely to reside within a 30km radius of it.

If you’re a retailer at Chadstone, that means your physical market is going to lie within this zone.

But clearly, once you put your e-commerce website online, there is no such location limitation.

A world wide market

Your website resides on the ‘world’ wide web, which means that anyone in the world with a connection can visit — provided of course that they know about it, or can find it.

The ramifications of this fact alone are massive, exciting and simultaneously scary for the retailer.

The exciting part is that if you are set up well enough, you can cater for customers around Australia and beyond just as well as you can those living near Chadstone — provided freight costs can be kept in reasonable check.

But because location is less of a concern, your market is both significantly larger and more difficult to target with your advertising.

Managing your markets

In my view, the massive difference between the two local and potentially global markets requires specialist attention and resourcing.

It really stands to reason that if you are going to provide your physical store with the resources it needs to service its local market, why on earth wouldn’t you resource your online store in a similar, or preferably even greater way?

You could even argue that the different markets your website can service could each command its own resource in the same way that a large retailer has stores in different locations.

But in turn, there’s the rub.

Low barriers to entry

Because of the lack of location barrier, competition is fierce. For just a few thousand dollars and a minimal ongoing charge, you can have a professional e-commerce website created.

You don’t even have to invest in inventory as many are willing to ‘drop ship’ (freight direct to your customer) on your behalf.

The world as your oyster

Still the question remains. If you can be successful servicing a market within a given location, what’s stopping you catering for the same demographic on a much wider scale — notwithstanding freight limitations?

You may even already have the warehousing and pick and pack capabilities in place — a huge advantage over those contemplating competing with you.

But being competitive in the space is going to require far more thought, planning and resourcing than just building a website and hanging it out there in cyberspace.

Think about getting a dedicated and experienced resource to run it for you. You might well find that such an investment will yield sales from locations you once could only dream about.

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