Thursday, December 15, 2011

Trending: Top 5 Must-Do's for Launching eCommerce

This is the second of a two-part series on non-traditional retail systems in Canada (Part I is available here).


eCommerce really isn't anything new by now in Canada- it's been around for over a decade, though in recent years has started to show explosive growth. This is in line with an upward trend for internet use and digital convergence: according to StatsCan, 81% of Ontarions used the internet regularly in 2010 and 51% of all Canadians placed orders for goods and services via eCommerce systems (114 million orders total, valued at around $15.3B). Most major national and global brands operating in the CPG and FMCG spaces have an eCommerce presence in one form or another. What we're now seeing is a series of disruptive technologies and platforms which are making eCommerce affordable for SMEs and owner-managed businesses.

As a Canadian business owner, one of your key questions about eCommerce systems should be this: how can I leverage eCommerce technologies to enhance my sales model and increase the health of my bottom line? Believe it or not, it's a big question that is sometimes forgotten about during the race to keep pace with the next big thing and be where the customers are.

eCommerce: Defined

The bread and butter of eCommerce in Canada is, of course, online shopping. Now-global brands like Amazon and eBay have established the perception that this is where there's serious money to be made for business. Which is true, but eCommerce isn't just confined to B2C companies. At its core, eCommerce is really just the transaction of payment across an electronic network in exchange for goods or services (most commonly the internet, through a closed transactional system on intranet or LAN would also meet this definition). Thinking back to our article on mCommerce- this type of commerce is also an eCommerce system, strictly speaking (though we differentiate the two, because there are important conceptual and technological differences between them).

Should you rush out and hire someone to develop an eCommerce system for your business right away?

That depends. What type of business are you in? If you offer CPG retail or high-margin recurring/subscription services in the B2C space, you should definitely take a hard look at the available technologies and put some thought into how they can benefit your growth and/or service essentials. You should also talk to a professional services firm with expertise in the eCommerce space. Hint: overhead costs for eCommerce systems are almost always significantly lower than for brick-and-mortar retail. An expansion into eCommerce would likely be far less expensive than an expansion of your physical location, and could very well yield the same (or better) revenue growth if properly implemented. Some Canadian businesses are also successfully adding eCommerce features to enhance their in-store operations. For example, Staples allows customers to order customizable print products online which can then be picked up in-store.

We can't stress this enough: unless you have an in-house marketing team which is highly experienced in eMarketing and eCommerce deployment for Canadian SMEs, have a conversation with an agency that has demonstrable expertise in this space before you move forward!

Top 5 Considerations for Bringing eCommerce to Your Business

1. Be a Savvy Planner - where does eCommerce fit in your sales model? What are your goals? How will you measure success? Will eCommerce support your existing model, or eventually replace it?
2. Be Design Conscious - the days of slapping together a functional (but boring) eCommerce site are over. The big players have invested significantly in design, and if their site looks better than yours, you may be seen as less credible. Think of it this way: if you walk into a grocery store you've never been to, will you be more or less likely to return if the floors are cruddy and the lighting dim when the grocery store across the street is clean and well lit?
3. Be Data Driven - ensure that a robust analytics platform is built into your eCommerce system, so that you can enhance your USP as time goes on and capture customer data to refine your online selling process
4. Be Security Conscious - consumers want to know you're doing everything within reason to protect their personal information, especially credit card numbers and home addresses. Thankfully, most payment gateways have invested significantly in securing this data- and you'll get that benefit (and brand equity) when you partner with a good one.
5. Be Innovative - if you're not offering consumers a serious added-value with eCommerce, what's the point? Remember: the purpose of technology is to make our lives easier. eCommerce is experiencing rapid growth because it eliminates time-wasting trips to physically go out and shop, allowing consumers to use that time for other tasks.

Sources:
Statistics Canada. The Daily: October 12, 2011. "Individual Internet Use and E-commerce".