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10 lessons Aussie retailers can take from overseas sites

By Oliver Milman
Friday, 08 April 2011

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.”

6. Make it easy to buy multiple products

 

Making it easy for your customers to navigate your site is an art rather than a science, but there are some pretty universal rules.

 

Don’t overload users with huge walls of text. It looks terrible and it puts them off. Also, don’t interrupt the flow of their browsing with large PDF files – a common mistake made by retailers with catalogue-based backgrounds.

 

Above all, link to other products whenever possible to encourage further sales. If someone has bought a jacket, maybe they’d like a shirt to complement it? If you’re selling tour trips, maybe a partner can offer products to aid customers’ trips?

 

“Two sites spring to mind when it comes to this – Amazon and Strawberry Net,” says Hodges. “They are just so easy to use and always link to other products.”

 

“Amazon is so well buttoned down that I always end up buying more from there than I should. You can use logical tools on these sites that can be very smart in helping your customers make further purchases.”

 

7. Find the right look for your proposition

 

It’s tempting to throw the lion’s share of your budget at creating a visually stunning website – a mistake that Naomi Simson of Red Balloon knows only too well.

 

As Simon discovered, having an attractive site is only part of the puzzle and, if your SEO and product isn’t up to scratch, can be extremely costly.

 

Indeed, a glossy website may not suit your business’ proposition. Amazon has a fairly simple-looking website, but still manages to pull in a fairly respectable $10 billion a quarter in sales. The site’s strength is in the depth of its range, which is well suited to its simplistic style. Craigslist is much the same.

 

If you’ve got a wide range of products, and lots of them, don’t over-complicate things. Clearly display your range and offer a clear path to purchase. A two-minute animated Flash graphic will do little to drive sales.

 

8. Build trust with suppliers

 

As mentioned above, if you are selling a commoditised product, you need to be screwing down costs wherever you can, including at your supplier.

 

However, for a longer-term, strategic vision of your business, it makes sense for you to be having conversations with your supplier that don’t just revolve around dollars and cents. Forging a good relationship with suppliers is key to offering customers a quality, prompt service.

 

“Treat your suppliers well and don’t push them on price all of the time,” says Fox. “If you are offering a unique product, incentivise your supplier to not work with anyone else. Be consistent with your business, make the ordering process easy and get to know them personally. It will pay off.”

 

9. Measure and learn

 

Whatever you do, measure the impact it has on your customers. If sales aren’t flowing, why not? What internet browser does your customers use and is it hindering access to your site? Do you have broken or obscure links that hamper purchases? How many clicks does it take to buy something?

 

Try to iron out problems as you see them, even if they are only experienced by a relatively small number of customers. Don’t be comforted by the ‘average’ user experience – you can always improve.

 

For example, if 10% of your customers find the shopping cart process slow and laborious, you are potentially losing out on a tenth of your income. If the site experiences peak times during the day, or peak periods throughout the year, does everyone manage to complete their purchase or do they give up in frustration?

 

10. Just do it

 

Launching a business of any kind usually takes plenty of planning, as well as a few sleepless nights. But the world of online retail doesn’t reward procrastination.

 

“The biggest problem with the Australian market is its size and population, which puts us on the back foot,” says Hodges. “But there is so much opportunity out there that retailers should move as a quickly as possible. Just go out and do it. Move quickly and react quickly.”

 

“So many people worry about a PR plan or a marketing plan. Don’t worry about that – you are a nimble online retailer and can adapt. Go and do it now and learn what the market wants.”

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