Targeting the online customer
The main difference between operating a business out of a shop or office, and running the same outfit online, has to do with expectations. Customers that shop in a physical store will immediately want different things of the same business on the web – with respect to price, shipping costs, and selection.
Simply copying what your offline business has to offer onto the internet is not necessarily going to generate the same degree of attention and sales. Before you take the leap, it’s wise to consider how your business might work differently in the digital space. How should your product focus online change to meet the expectations of web-savvy customers, and what can you offer them that you can’t give your in-store regulars?
Put yourself in their shoes
The success of an established business starting a web store comes down to how well it understands and addresses the differences in expectation between online and offline customers. The most important of these is demand. Are people actually buying what you want to sell?
A simple way of gauging demand is to spend some time testing product names and keywords with the Google Keyword Research Tool and Google Insights. These are free for anyone to use, and give an informed overview of the volume of people searching for your products or services on Google.
Having checked there is a sufficient market for your wares, it’s essential to think about how this demand might differ from offline. A simple, useful way of doing this is to take a moment to step into your customer’s shoes. Consider your own approach to online retail – given how you shop online, what would you expect from your business as a consumer?
“One of the things that always fascinates me is that business owners consume technology – they consume digital media, they do stuff online – but they don’t think their customers do it,” says Nima Yassini, founder of New Republique. “Sometimes we think we’re not the consumer of our own product. It’s as if we forget that we’re actually consuming our own products, services, or platforms, and we think that none of our customers exist there, or we draw this blank when it comes to thinking how our customer would react.”
Create something new
This is why it’s important to reconsider the role of your business for web customers, and accept that its online focus might be considerably different from your everyday operations. It’s best to do this before you start online, as altering a website to match an amended focus can be complex and costly.
“The first question I ask businesses is: What’s the purpose of the website? Is it a way of reaching greater Australia without having to create a store? Is it about creating a supplement to the physical store – creating products you can only buy online but pick up in-store, so when they’re in-store you can up-sell and cross-sell? Or is it about just providing another place that you can go,” asks New Republique’s Yassini? “Fundamentally, the focus isn’t all about going online to sell, which is a big problem,” he continues. “Businesses often begin with how to make more money, rather than how to potentially create more efficiency.”
For consumers, the appeal of an online business is that it gives them a simpler way to get what they want. Accordingly, your primary goal in going online shouldn’t be just to make more money but to create new ways of keeping customers happy. Instead of viewing a website as a way to reach a broader watershed of customers, think of it as an entirely new side to your business, with its own unique things to offer.
A good example of this approach is the way Sydney business Butcherman, which started life as a wholesale butcher 35 years ago, evolved to create the consumer-facing online delivery service it offers today. Chief executive officer Paul Tory explains the idea to go online started with friends and family asking to buy meat straight from the factory.
“They’d literally walk in and ask if they could buy the meat direct. We said ‘yes, and they told friends, and it started to grow, which we were happy to do,” he explains. “But then one lady suggested that we drop it to her house, as our vans drove right by her house. That’s where I got the idea because there was no one else doing it well, so we set about doing it.”
Testing the waters
In many cases, it’s best for existing brick-and-mortar businesses to be cautious with how they make the transition. A sensible approach is to not put the whole of the business online but to consider which isolated aspects might be best suited to keeping web customers happy.
When Butcherman started, explains Tory, it offered only certain aspects of its existing product range that were likely to appeal to the digital consumer. He also avoided getting too niche with the products he was offering.
“We just sold the things that we did readily in the wholesale. If we didn’t sell a lot of it wholesale, it didn’t go online,” he says. “I didn’t carry stuff just on the off-chance that a customer would want some obscure cut.”
In some instances, heading online might require your business to broaden what it offers, or change its offering slightly to differentiate from competitors. With a retail store, it’s possible that customers are already researching your products online, using your store to investigate them firsthand, and buying wherever they find the cheapest price, which might not be with your business.
“If you’re not online, you might find that you just can’t compete on price alone, because the same or similar product is being sourced from overseas, or from suppliers who don’t have the same overhead costs as what you do in bricks and mortar store,” says Simon Johnson, director of Domainer Income. “More of an advanced technique is trying to sell products online, and making a very slim margin in order to make it up on other products and services.”
A sound way of working around this obstacle, says Johnson, is to think of your business with the lifetime value of the customer in mind. A business that sells baby clothes, for example, might find it’s not able to compete with online retailers that are selling similar, cheaper products. In that case, it might be worthwhile doing some research around other products that are relevant to that market and test the waters with those.
“Now you have this customer, you can anticipate a need as their kids grow up,” he says. “They’re going to need prams, they’re going to need cots, they’re going to need kids’ DVDs. If you think in terms of that model, you may be able to compete in different niches quite well within that particular market.”
Complex expectations
The simplest way of keeping online customers happy is to tailor your products to match their expectations. This might be as simple as only offering products that work in an online context, or it might involve venturing out into services that complement what your business does in store.
In many cases, a bit of research, coupled with the process of stepping back and reconsidering your products, will reveal that some simply aren’t going to work online. Sometimes, it’s more complicated; your customers might like the idea of buying from you online, but value something about what your offline business sells that can’t be fully replicated in the digital space.
Brent Quill has found this with his administration training business Training for Work. As most of its clients are based rurally, the appeal of the internet as a means of bridging the gap between trainers and trainees is one that’s not lost on Quill – but taking the business online has posed a few obstacles.
Although it makes sense for a training business to serve rural clients over the internet, one of the main appeals of Quill’s operation is its ability to actually travel and provide face-to-face training to businesses where other providers might not be able or willing to.
“The reason people buy our product, and why we’ve had such great success in terms of a startup story, is that consumers aren’t interested in getting an education on the internet. They’re interested in a trainer going one-on-one to the worksite,” he says.
“So we have this really big challenge where our consumer wants one-on-one, and we need to embrace the internet – but the problem is embracing it can never give you the same product the same way that retail can never deliver the same product.”
He uses the analogy of a retail customer wanting to buy a particular item of clothing. They might not want to pay the bricks-and-mortar price if they can get it cheaper online, but they still want to go into a store and try it on. It’s healthy to anticipate this customer purchase paradox when assessing how your business is going to work online; it may mean you need to modify the range of products you offer specifically for the internet shoppers in your target market.
