Q. I have an information-only website for my store. Am I losing a lot of business by not selling online?
A.The growth of e-commerce is remarkable. Online retail spending now accounts for 7 percent of all U.S. retail spending, excluding food, autos and gas.
Does that mean every traditional independent retailer is losing money by not jumping on the e-commerce bandwagon? Not necessarily, according to Doug Fleener, retail consultant and author of The Profitable Retailer.
“If you’re not cautious, an online store can be a huge distraction. It has to complement your brick-and-mortar business.” The marketing or informational website is essential, but not every retailer should move to selling online.
“I’ve seen retailers actually mess up their in-store sales because they sought to be competitive online, where prices are very low. Those same prices in their brick-and-mortar store create a much lower margin than necessary, hurting the bottom line. Low margins and high volume work for Wal-Mart, not for independents.”
Of course, some businesses do very well by adding an online channel
to existing stores. You know your business better than anyone and should
decide, with some research, whether yours is well suited to online sales.
If you decide to open an online store, hire the right people who already
know what they’re doing, advises Fleener.
Don’t spend your time learning how to do it if that means (as it often does) neglecting your current business and customers, which is likely to be your expertise.
How do you find the right web developer? Notice other store websites that appeal to you and keep a list. Contact these retailers to find out who developed their websites, or look for links at the bottom of homepages for the web developer’s company name and a link to its site.
Ask these retailers for honest evaluations of the web designer or developer, including a description of what duties the web developer handles and how much the retailer is involved.
Fleener also advises keeping separate numbers, such as profit and loss statements, on your two channels—traditional store and online—to evaluate whether your strategies are proving profitable.
Do you have a retailing question? Ask the Michigan Retailers Association
by mail: 603 South Washington Avenue, Lansing, MI 48933;
by fax: 517.372.1303;
by e-mail: mra@retailers.com.
