As the coronavirus pandemic has spread throughout the world, lockdown restrictions have forced shoppers from the high street into buying more goods online. In the UK, for example, 18.1% of all retail sales were purchased online in September 2019 whereas in July 2020 30.1% of all retail purchases were online. This is a staggering 66% increase.
This huge growth in online sales is clearly attributed to the coronavirus restrictions, but it looks increasingly likely that shoppers will focus more of their buying intentions online in the future, which will exert a large effect on high street retailing from now on.
In this article, we will look at how traditional bricks and mortar businesses can move towards a bigger eCommerce presence without leaving the high street entirely. There are plenty of lessons to be learnt from successful internet companies such as Amazon and other large retail organisations that have both a strong internet presence and bricks and mortar stores.
We will examine the possibilities for smaller businesses by looking at several case studies.
Amazon.com
Amazon needs no introduction, but over the years this ecommerce behemoth has evolved in many subtle ways, learning lessons from rigorous data analytics and focussing on making the finding of goods to buy and the actual purchase process as smooth and frictionless as possible.
Data analytics
Data analytics play a major role in the display of related products which keep buyers on their platform even if their first search does not yield the products that they were originally looking for. This has become highly optimized and requires large amounts of data to ascertain how a large number of customers react and what products they actually buy once they have searched for a specific product.
Frictionless checkout processes
The detailed analysis of huge amounts of data must underpin most, if not all, of Amazon’s ecommerce processes, but there is one area where considerable focus is brought to bear as this is at the crucial point of sale, or on an ecommerce platform, the checkout process.
Amazon is a master at making the shopping basket and checkout processes as easy to use, and as frictionless as possible. Abandoned shopping carts are the bane of many online businesses, so looking in detail about how to reduce the number of failed purchases is incredibly important.
A new online retailer needs to spend time looking at some of the ways that Amazon optimize their point of sale. For example, when you find a product and look at its detail page, a prominent box is displayed inviting you to add it to your basket or buy now. One click on that buy now button and bingo!, you’ve bought it.
If you add that product to your basket then during the checkout process you have the option of one click purchasing too, which uses your default deliver address and payment method and makes the actual purchase miraculously easy.
Many online businesses use similar techniques and an optimized checkout page to make it as easy as possible for their customers to buy their products as quickly and as simply as possible.
John Lewis Partners
John Lewis Partners is a prominent UK retailer with many high street department stores. They also run a phenomenally successful web site. Although John Lewis has experienced a significant downturn in high street sales during the lockdown and are closing eight stores as a result, a key part of their ecommerce success (which is now eclipsing their high street sales) is by offering excellent click and collect services.
Click and collect
This service allows a customer to order online but receive the next day delivery from either a local John Lewis store or, crucially, at other partner shops. There is a small charge to have the parcel delivered to a partner shop or it is free to have it delivered to one of its own shops.
This neatly circumvents one of the major bug bears of ecommerce – having to hang around at home waiting for your parcel to arrive.
John Lewis Partners are mostly price competitive, and they also offer a market leading two year warranty on most of their electrical items, but by combining these attributes with excellent parcel delivery mechanisms this is proving to be a winning strategy for this large enterprise.
What can an SME learn from these examples?
We have taken a quick look at two major companies and examined some of their market winning strategies to assess what a SME could learn to develop their own successful online business.
Clearly the ability to acquire and analyse customer data is particularly important. This helps understand how customers navigate through the website and offers an important insight into the products that they are initially interested in, and those which they eventually buy.
Data analytics also feeds into creating as frictionless and easy to use checkout process as possible. It must be as straightforward to manage a shopping basket and make the payment as possible so there is no opportunity for hesitation or second thoughts. Abandoned shopping carts must be avoided.
The final part of the process is in delivering the purchased items. Although most customers will want a home delivery for convenience, have you considered running your own click and collect service in which customers pick up the item from your shop? This gives you, the retailer, an opportunity to upsell to them and also build a relationship which could boost your customer lifetime value, which is another important concept to master!