The Missed Opportunity in E-Commerce for the SME Retailer is Surprisingly the Physical Store


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Resent research by the Department for Business Innovation & Skills shows that fewer than a third of UK SMEs transact online, staggering when you consider than between 2003 and 2012 internet retail volumes grew by more than 6 times from £4.8 billion to £31.1 billion. The situation is similar in other countries.

E-commerce is considered to provide substantial benefits to business, including SMEs largely by way of improving efficiencies and raising revenue, and there are many examples of successful retailers providing online e-commerce. E-commerce offers access to a global audience of potential customers.

But competition online is fierce, so as an SME you have to stand out. Why should anyone visit your online store and how will they even find it, are key questions you have to ask yourself. The trick is to find an opportunity or pain point in the market and fill it with something people really want or need.

Of course you have to think about things like creating a smooth website, protecting the customer’s data, meeting local regulations, getting the right infrastructure in place and other practical matters. You also have to think about terms, legal matters and payments.

Today though, online resources like SME Toolkit provide solution to assist an SME to go online; there are tools to evaluate web sites, kick-start guides, how-to articles, library resources and lots of other tools. There are even EU programs such as the “Digital Agenda” supporting the adoption of e-commerce in the SME space.

What’s lacking in the e-commerce puzzle?
This is great, however, what is fundamentally lacking in all of these discussions on why SME should invest in online e-commerce is how the physical store still plays a role. Working with large enterprise retailers I often see this as well, but for a small retailer this is even more important. Because really, why should I buy something online from a small retailer when I can buy at the mega online retailer?

Amazon is today the most successful E-retailer in the world and they have been at it for more than 20 years. They have put a lot of pressure on a lot of businesses in the physical world, but the pleasure of shopping “in real life” still keeps some 70% of the retail sector analog.

Amazon does not drive physical book stores out of business because of lower prices or better inventory. It’s Amazons fanatic focus on customer service and incredibly clever design of their sites that underpins their success. Think about it – Amazon has probably even outperformed and killed more digital competitors than physical stores.

But what is it that makes the Amazon customer experience so good? It’s that you, as a customer, is recognized and appreciated. You are greeted by name. You are offered a number of interesting books or other things, partly based on the items newsworthiness, but also based on what other stuff you have bought – or glanced at. When you come to check out, all you have to do is breeze through – Amazon knows your credit card, where to ship your stuff, your preferred method of shipping and many other things.

Meanwhile, in the physical stores with many bricks and mortar retailers: no one takes notice when you arrive. No one knows who you are. No one knows how long you have waited for service. No one knows what kind of product you are interested in. Does anybody even care?

The opportunity for the SME

I personally go to local stores and smaller stores for the service. I get personal advice and I can ask questions about the product. I get an opportunity to touch and feel the product and I can buy it immediately. What I sometimes feel is lacking is the range. This is potentially something that a complementary service like e-commerce could add to the total offering.

The advantage the smaller retailer has is that they can take advantage of smart new technology that integrates the online and the offline in a much quicker way than the bricks and mortar’s.

Let me take one example; Click and Collect.

We all know that “Click and Collect” represents a huge opportunity for retailers to enhance their customer’s view of their brand, to lower costs from unsuccessful deliveries and to increase basket size. But it seems to me, that in the headlong rush to “digitize” their bricks and mortar business models many of the brands that serve us are running the risk of turning the powerful “Click & Collect” opportunity into “Click & Disconnect” for their customers. They provide a fantastic experience online but when I go and collect it breaks down. How often do I not end up in an unorganized queue when I expect just to be in and out without any friction.

Brands spend a fortune on having a sexy and effective digital presence but they need to think hard about the way this integrates with the face to face experience that the customers are often forced to endure in store. But it doesn’t have to be this way. The tools exist to manage the process of service allocation in store and connect this up with the on line experience seamlessly and in a way that will delight customers. All that’s required is a little thought and preparation, the ability to “put yourself in your customer’s shoes” and a modest investment in the solutions which will pay for themselves many times over through increased customer loyalty, basket size and a wealth of useful data around the physical shopping experience.

The personal interaction is key
Over 70% of all purchase decisions are still made in face to face space and yes, that includes the additional purchases that “Click & Collect” customers make when they come into store to pick up their online purchases. But these purchases will only get made if the journey is good, stress free and presents opportunities to buy in a relevant and convenient way to the visiting customer.

SMEs has a wonderful opportunity in using new, smart and available technology to create seamless journeys. And if they manage to keep up the great personal service they have in the stores today – that we all as human beings like so much – then the SME can be a winner in the new digital customer age.

Image Courtesy: Qmatic / Shutterstock

Sven-Olof Husmark
Sven-Olof is the founder of Experify, a business consultant firm, Senior Advisor at Egain Group a pioneer in intelligent AI driven energy optimization of buildings and former CMO at Qmatic Group, a world leader in creating better customer journeys.Sven-Olof is a senior executive with demonstrated success in growing companies globally by initiating effective sales, marketing and customer service strategies.


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