Over the last 10 years, eCommerce has increased its share of the U.S. retail market from 5% to 15%. Although the pandemic has certainly played its role in this trend, consumers’ growing desire to make their purchases online was always inevitable given the level of convenience involved in this way of shopping. As developments in logistics lead to faster delivery times, this trend will only grow further.
There are several benefits for a brick and mortar retailer to transition at least part of their operations online. These include:
- The potential to scale beyond your immediate geographic locations
- An increased capacity to hold inventory
- The ability to take orders around the clock
Here we will go over some of the key points that you will need to think about when moving a brick and mortar store online.
1. Focus as many resources as possible to moving online
This may seem obvious, but given the number of moving parts involved in moving your retail operations online, you need to focus as much of your energy and your organization’s resources on this goal.
Much of this transition will involve upskilling existing staff from working in a more customer-centric environment to fulfillment roles. This is simply incompatible with trying to grow the brick-and-mortar arm of your business. Staff will become overstretched, the focus will become scattered, and the likelihood of the transitioning failing will grow exponentially.
There are a few ways that you can strip back your brick and mortar operations in order to give your team the breathing space to pivot to eCommerce, this can include:
- Trying to funnel your existing customers to buying your products online. This can be done by advertising in-store that you sell online, sending email blasts informing customers that they can now purchase online, and offering a click and collect service.
- Cutting back your opening hours to allow more time for staff upskilling. These reduced opening hours can also encourage customers to move online.
- Not trying to expand to stocking any additional products until you feel comfortable with your eCommerce operations – this point is vital given inventory management will be one of the biggest learning curves of this transition.
As a store owner, you need to psychologically prepare yourself that the move to eCommerce will likely involve a period where your revenue is reduced in addition to the additional expenses that you will incur investing in this pivot. This is normal and should not be a cause for dismay – the sacrifice will be worth it if you get this transition right.
2. Get your inventory management on point
By far the biggest challenge involved in moving from being a brick and mortar retailer to being an eCommerce store is the additional strain put on your inventory management team.
In a brick-and-mortar retail operation, where purchases and inventory are all handled in the same physical location, you can get away with having a degree of “organized chaos” in your backroom. Ecommerce is different in this regard. Data points like levels of stock, your best-selling items, and reviews for each item all need to be made available to customers online, and this means that inventory needs to be monitored meticulously.
There are a few ways that a brick and mortar retailer might need to adapt their inventory management practices in order to cope with the additional demands that selling online places upon them. These include:
- Investing in a more robust inventory management software. Software that can integrate with the front end of your online store and your POS system can allow you to keep your inventory updated even if you are selling through multiple channels.
- Setting stricter policies around stock checks and updates. Whereas an overlooking of stock checks may have been quietly tolerated in the past, especially on days where there was a greater than expected flow of customers, this now needs to be completed at least once a day without failure. Neglecting this should be seen as a performance issue by staff and a system should be set up for handling this appropriately.
- Putting investment into upskilling your current team to be more rigorous in their inventory management and hiring dedicated specialists for this if necessary.
Efficient inventory management is also necessary for a smooth delivery process which is the next piece of the eCommerce puzzle.
3. Source a reliable delivery partner
Part of the eCommerce game is competing with the likes of Amazon and other larger vendors who have fulfillment centers all over the country and are therefore able to offer cheap (and often free) next-day delivery.
Recent consumer data suggests that 63% of online shoppers base their purchasing decision on the speed of delivery. Therefore finding delivery partners who can ship off products at a pace without eating into too much of your margins is key to competing online.
Some tips for sourcing a reliable delivery partner include:
- Start off by marketing your products to specific locations where you know you can offer affordable next day delivery (more on this later).
- Try to anticipate the volume of orders that you expect to sell in the next 12 months and look for partners who can offer a competitive price at that specific volume.
- Take into account the size and weight of the products that you sell, some courier services hike up their charges massively for bulkier deliveries. If the majority of what you sell is bulky then you may want to look for courier services that specialize in these types of deliveries.
It’s worth moving to sell your inventory online bit by bit in order to test out different delivery partners. Telling your existing customers that you are starting to sell certain products online, and offering them a discount if they make these online purchases can also offer a relatively risk-free way of testing out delivery partners
4. Set up and market your online store
When setting up your online store, you want to opt for a done-for-you eCommerce platform, to begin with so you don’t end up getting stuck in the weeds on the technical side of things. Try to go for a platform that is relatively easy to use and that does those basics well rather than having every feature under the sun. As you grow, and your eCommerce operation gets more complex, you can always switch up your platform to get added functionalities.
When it comes to marketing your online store, there are essentially three means of driving traffic. These are:
- Paid traffic such as Google PPC and Facebook Ads
- Organic traffic (people finding you when searching for the products you sell)
- Direct traffic (people searching for your brand specifically)
Unless you have developed a decent-sized brand from your brick-and-mortar store, your best chances of getting early sales are through paid traffic.
A general rule of thumb with paid traffic is to use Facebook Ads if you sell products related to a particular passion or interest (sporting apparel for example), and Google Ads if what you are selling is more of a universally used commodity (electrical fixtures for example). This is because Facebook (and other paid social) advertising is based on people’s interests, whereas Google advertising is based on keywords that people specifically search.
As far as organic traffic is concerned, although there are technical elements to this, search engines are moving towards favoring ranking brands, so a strong presence in organic search will naturally flow from good all-around marketing.
Although there is a learning curve to moving a brick and mortar retail operation online, you’d be surprised how much of an advantage a traditional retail experience will give you. In addition to this, the sophistication and ease of use of eCommerce tools can significantly ease this transition. With a strategy to build out your inventory management and fulfillment and a solid eCommerce platform, you should soon the benefits of selling online.
This article was written by Mike Skoropad. Mike is the Co-founder and CEO of tire retailer United Tires.