For SMEs considering including online retail within their omni-channel strategy, there is no time like the present.
As mobile penetration continues to grow, along with the customer’s need for accessibility and convenience, the pros to e-commerce are undeniable. But timing and preparation are integral to any SMEs success in online retail and a premature move into the space could have a considerably negative impact on a business’ bottom line.
“Seeing a brand grow online through social media follows and repeat purchases are just part of the success factors a business needs to measure,” says Matt Roux, CTO for Emerce Commerce. “The reality is that a business owner needs to see that each order is profitable and ideally, that online sales are at least 1% of retail store purchases.”
According to Roux, South Africa also presents trading nuances for which SMEs need to prepare. Costs for fulfilling orders to more remote towns can get very expensive, especially for large dimension products. Another local consideration is that payment gateway providers charge high per-transaction commissions for low volume online stores – a factor that could prove unsustainable for some SMEs.
SMEs therefore need to do a careful brand audit in order to determine if they are ready for the leap into online retail.
Roux provides a four-step checklist to help business owners make a considered decision:
- Cost implications: Businesses need to understand the cost implications – both once-off and monthly – for an online store. Courier costs and payment gateway charges are just two of these. Has the business set clear targets for monthly online sales that will assist the path to profitability via the online channel?
- Capacity considerations: Having an online store has significant resource implications for a business so SMEs need to check if they have the capacity within their internal team to cover roles and responsibilities including customer servicing; financial reconciliation; order fulfillment management; online merchandising; digital marketing; copy writing; and photography.
- Corporate identity: A clear and consistent corporate identity is key to a positive visual impact online. SMEs need to have sufficient lifestyle imagery to bring across the tone of the brand. In addition, between four and eight high resolution product photographs are required for each product. The associated costs here will be determined by how many products the business sells.
- Current IT: Does the business have any existing IT solutions that the online store can integrate such as accounting software and warehouse management software?
Opening up new revenue streams and engaging new customers are just two among many benefits that a move into e-commerce can offer a business.