Retailers continue to create their own competition

I am often asked to speak on selling online and other eMarketing matters by local economic development representatives in an effort to help local business operators move their business online and stay competitive.

Unfortunately, these proactive measures often fall on deaf ears.

Take last week’s workshop for instance. The local council which hired me to deliver the workshop is home to thousands of retailers of every size, shape and form.

Given that well under 10% of them are likely to provide a reasonably professional website, you would hope that a workshop designed to help them understand and embrace eCommerce would be very well attended.
But unfortunately the opposite proved to be the case.

Of the dozen attendees at the workshop, not a single one had a physical shop!

Everyone but retailers in attendance

Those that did attend were either providers of services looking at ways of selling online or those looking to set up an eCommerce enabled website.

So not only did existing retailers miss an affordable and accessible opportunity to learn how to tap into the swelling numbers of people shopping online, it allowed a swag of potential competitors to steal the march on them by boning up on this growing channel to market and in turn, potentially steal their business.

As regular readers of this blog would know, this is not the first time this situation has occurred, as retailers everywhere turn their noses up at the very initiatives that are trying to prepare and arm them for online competition.

So why the apathy?

One hypothesis for these no-shows is that they do not perceive that online sales are significant enough to warrant the trouble and expense of competing in this way.

To a degree that might be true. A recently reported 5.5% of Australian retail sales being conducted online may not seem particularly significant.

But if I was a retailer, the fact that any local people at all were shunning my well stocked and conveniently located shop in preference to buying online from a supplier in cyberspace would make me very annoyed indeed.

And critically, what this statistic fails to indicate is the number of people who research goods and services online prior to ordering via a more traditional channel. Research tells us that is somewhere between 70% and 80% of the population.

So if your goods and services aren’t well represented online, you will miss this critical walk-up traffic as well as the proportion conducted online.

What barriers to entry?

Another hypothesis is that the barriers to entry of establishing a competitive online presence are just too great.

In the not so distant past, that may well have been the case. But the drastic reduction in the price of eCommerce technology and professional help to establish and maintain it means that a professional web presence is now easily within reach of the smallest retailer – certainly well less than the physical equivalent.

All when existing retailers possess the vast bulk of requirements – staff, stock, storage, payment options, etc that online retailers have to set up from scratch.

Economic development representatives from all over Australia report a similar dilemma – no matter how good the speaker or how low the admission price, you just cannot get retailers out of their shops to attend good business events.

To these retailers I have just one oft-quoted thing for them to consider – if you don’t look after your customers online, your competitors will!

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Craig Reardon is a leading eBusiness educator and founder and director of independent web services firm The E Team which provide the gamut of ‘pre-built’ website solutions, technologies and services to SMEs in Melbourne and beyond.