Before digital technology came into existence, opening good old brick-and-mortar stores in busy neighborhoods was the ideal way to expand the reach of your business. Today, businesses can boost their retail revenue by transitioning to an e-commerce platform. An online presence is crucial, but before jumping on that wagon, you should do SWOT analysis to weigh the negative and positive aspects of digital transformation.
a) Entry restriction: The startup costs for an e-commerce store are lower in comparison to a normal brick and mortar store, reducing the limitations to entry.
b) Better communication: The Digital transformation of your business into an e-commerce platform means your customers will be able to communicate directly with you when placing an order, during shipping, and for concerns or queries.
c) Competitive pricing: An e-commerce platform allows you to sell your products directly to consumers at a lower price compared to the market value. This can be achieved by reducing the number of distributors or market agents, saving you and your customer money.
d) More geographical reach: Transitioning your physical business into an e-commerce platform gives you the ability to increase your business activities and customer base on a global scale.
e) Global marketing & branding: An e-commerce platform makes advertising of services and products more cost-effective compared to traditional marketing methods. Additionally, there are several internet marketing tools you can use for free such as target emailing, Search Engine Optimization (SEO), or Social Media Marketing (SMM) to help promote your business brand.
f) Simplify financial operations: Conducting financial transactions using electronic payment systems is fast and easy and can be done from anywhere in the world.
a) Higher customer expectations: In case of an online store, consumers have similar expectations from a small business as that of an industry giant. If the expectations are not met then it results in customer dissatisfaction.
b) Reduction in face-to-face interaction: Some customers would rather buy their products personally on a visit to the market instead of buying them online.
c) Shipping costs: Sometimes the shipping costs of a product can be higher than the product cost.
d) Psychological impact: The merchant and the customer do not interact directly making it difficult for the seller to influence their decision-making.
a) Market growth: The number of people using the internet is increasing rapidly, giving e-commerce platforms the opportunity to expand their customer base since more people are doing things online including shopping.
b) Industry growth: Online and other non-store retail sales have experienced exponential growth in the last few years. According to The National Retail Federation, online and other non-store sales could rise as much as 12 percent in 2018. By undergoing your digital transformation to expand your business online, you should realize the ROI in 1-2 years.
c) Worldwide influence: Companies that start their business online attain the ability to distribute their services/solutions throughout the global market.
d) Availability: eCommerce platforms allow businesses to take orders on any day of the week and 24 hours a day.
a) Future legislation: The growth of e-commerce platforms has seen a significant loss of tax revenue. The government is beginning to write laws to impose a tax on all online sales. This could eliminate one motivation for digital transformation.
b) Privacy and fraud: Some consumers are hesitant to provide their personal information on e-commerce platforms for fear that it will be misused. There are also concerns about fraud, especially where financial data is involved. This comprises an entire group of people who are still hesitant about making purchases or conducting business using the Internet.
c) Competition: Reducing barriers means that there is an easier entry into the market. This leads to increased competition between e-commerce platforms and a reduction in profit margins and prices.
Strategies to Digitally Transform Your Business
While a physical location is an integral element for local consumers, the online presence of a website is of equal importance for your international and local customer base. The development of a clear strategy for your digital business transformation is critical to ensure the successful transition to an eCommerce platform.
#1 Identify your New Online Customers
The needs of your brick and mortar customers will differ from those of your potential online shoppers. Expanding your business to an e-commerce platform means you will be shipping both nationally and even internationally. Businesses must develop an e-commerce strategy to ensure that their marketing initiatives resonate with the new online audience.
#2 Determine the Products you want to Sell Online
You may not want to sell all of your products online. For example, some items will be too costly to ship, making online purchasing difficult. Additionally, some products will have a longer decision-making process that users may not find conducive to their online shopping experience. Careful selection of a limited product line is critical to a successful kick-off of your e-commerce approach. Once you have tested the waters with this smaller product line, you can expand to offer more products.
#3 Reevaluate Customer Service
Think of how you will cater to your online customers as you have been doing for your brick and mortar customers. Will you have a help-line for them to call? How will you deal with product returns and complaints, or follow up on your sales? Review your shipping department processes and capacity because you will be shipping more products with the addition of an e-commerce platform than you did for your brick and mortar store. It is important to ensure that your shipping department has the required capacity to handle the increased workload.
The employment of email automation software is a must to facilitate immediate customer follow up and engagement. Automated emails are sent to follow up on sales, offer discounts, and route customer requests to the appropriate division to ensure a prompt response. Additionally, you will need a software that can set up a shopping cart on the website and track inventory.
#5 Set Up Secure Payments
Online consumers need assurance for making safe credit card purchases. Set up a simple but secure way for your customers to pay online. PayPal is popular but you can also use a processing company to process major credit cards.
#6 Create a Website
Building your website before developing an e-commerce strategy is a big mistake. You need to take all the above-mentioned steps before you can think about website development to ensure that everything works together to deliver a cohesive and satisfactory customer experience.
Employing Your New Strategy
After launching your business online, you can increase your customer base by uploading pictures of your new products, offering discount coupons or freebies via emails, providing discounts for online orders, and providing new products weekly or monthly.
Kellton Tech can help you build customer engagement solutions with the help of latest technologies to streamline your digital transformation process. Our digital transformation solutions reshape the way retailers derive value from their customer interactions.