He finally did it. After fulminating strongly against the relevancy, and then, conversely, the damaging impact, of online retailing, Gerry Harvey has decided to take the plunge with Harvey Norman Big Buys.
The launch of the site can be seen as somewhat of a watershed moment in Australian online retail. With the, albeit somewhat grudging, roll out of a Harvey Norman eCommerce offering, there’s now no excuse for retail start-ups that fail to look at their online strategy.
More needs to be done to stop the flow of dollars to overseas retailers – Harvey’s pet peeve.
National Retailers Association figures out this week show that three quarters of Australian SME retailers lose at least $50,000 a year in sales to foreign websites.
But rather than simply rage over the supposed unfairness of the GST-free threshold, we’ve put together 10 lessons from overseas sites that retail start-ups should heed to ensure consumer dollars stay in Australia – or even coax sales from overseas buyers.
“It would be great if Australia could turn the issue on its head and become a global retail player and net online exporter,” says Michael Fox, co-founder of online customised shoe retailer Shoes of Prey.
“For example, around 60% of our own sales are made overseas. It can be done.”
1. Don’t use offline thinking
It’s all very well for retailers to use their websites as an extra shop window, but simply replicating your offline offer on the internet won’t cut the mustard.
Compare the experience of using JB Hi-Fi, for example, to that of UK music retailer Play.com. Or witness the way that Toptable.com has transformed the art of restaurant reviewing into an online experience that includes 360-degree imaging and blogging.
Everything from offers and promotions to the way you display your products has to be framed within the online world. If you already have a physical store, you need to drop the bricks and mortar thinking.
“The obvious thing is to replicate your offline business online, but if people have no compelling reason to spend money with you they will continue to look overseas,” says Fox.
2. Find a point of difference
If you are selling a commoditised product, your main point of difference will be price. You will have to spend a lot of time negotiating supplier terms and trimming overheads in order to offer better deals than your rivals.
If, however, you want to be a tad more innovative, you need to identify your point of difference and amplify it. This point of difference can manifest itself in a number of ways, from product offering to its delivery.
US clothing site Zappos, for example, offers a 365 day return policy and next day delivery. Amazon has free shipping, as well as a huge breadth of product. Net-A-Porter’s key difference, meanwhile, is its high-end photography and its positioning as a luxury, fashionable destination.
Can you replicate any of these key points of difference for your online store? If not, don’t be surprised if customers go elsewhere.
3. Maintain relevancy
Much like every other business sector, staying relevant is crucial in online retail. You need to know who your customers are, how you can appeal to them and, if necessary, adapt your offering.
“You need to stay up to speed with what’s relevant to customers’ lives,” says Craig Hodges, managing director of digital marketing and content business King Content.
“Local retailers have really struggled with this and seen money slip through the bottom line as a result. You need to know exactly what your customers want.”
In order to go this, you need to utilise a raft of free online tools, from LinkedIn for leads to Google Analytics to test what the market wants. Keep a close eye on your competitors and analyse what’s going on in your industry – are you still fresh and relevant or are you being bypassed?
4. Keep the conversation flowing
Selling online doesn’t simply involve putting pictures of your products on the web and setting up a shopping basket.
The best online retail sites interact with their customers regularly, answering questions and dealing with complaints. A strong presence on Twitter and Facebook is becoming less of an optional luxury for businesses wishing to drive online sales.
“Best Buy, a US site, encourages it staff to use Twitter to interact with customers, even outside work hours,” says Fox. “They incentivise staff to do this, which creates a great point of difference.”
Hodges says: “I was at a business conference recently and a straw poll there showed that 10% of people were swayed by direct marketing and Yellow Pages, and yet 95% were swayed by social media.”
“I’m amazed that so many brands don’t understand social media. It’s such a great way to listen and interact with customers. You need to go where they are which is, increasingly, Facebook.”
5. Get the SEO basics right
Most online businesses worth their salt will be across the basics of SEO, from title tags to keywords.
But the top retail sites focus on one key area – links. Not only does their advanced social media presence allow them to talk to consumers, it also allows them to spread what others are saying about them.
“Zappos has so many blogs written about its customer service that it can link to them all, which looks great from them and really helps their SEO,” says Fox. “Blogging is an area that Australian sites could definitely do a bit better on.”
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