There are now a large variety of options to choose from if you’ve decided to establish a new online store. So many, in fact, this can be overwhelming for new entrants to the brave new world of e-commerce.

Apart from the sheer volume of options to choose from, all the technology associated with e-commerce is changing rapidly with new ideas and new ways of setting up an online store popping up rapidly.

And not only is there a huge range of ways to set up an online store, there are now hundreds of associated applications of apps to consider which offer ways to enhance the functionality of your business. understanding how these work and how these apps can benefit your business can take an enormous amount of research. Even then you’ll be working hard to cut through marketing spin and decipher geek jargon.

I’m going to try to explain three categories of options which new entrants to online retail need to understand in the next three blog posts. I’ll explain the categories in lay terms which non-technical types can comprehend, so if you’re looking for a detailed comparisons of specifications, you may need to look at other sites such as Top Ten Reviews  or Ecommerce Platforms.

To make the huge range of alternatives easy to understand, I like to divide them up into three categories. Of course this might be debatable, certainly there is already a lot of overlap between these categories, but this should help the decision-making process. Decide on your category first, then you can drill down into the offerings in each category to make your decision. These categories are as follows:

  • Option 1: Your own shop on a big platform (like eBay or Facebook)
  • Option 2: A hosted platform solution (like Big Commerce, Shopify or Volusion)
  • Option 3: A custom-built solution on a content management system (like Magento, Joomla or Drupel)

Now as I said, the lines between these categories can be blurred and there are many solutions which fall outside of these categories. I wouldn’t worry about those anyway.

With the rapid pace of technology development for online shopping, I think web shop owners should be prepared to update to new platforms from time to time. Sure, that can mean a lot of work, like moving a traditional shop into new premises, but the resulting benefits can make this well worth your while.

I know of a number of successful online retailers who have started out with option one, selling their merchandise on eBay, and progressing through options two and three described above. I think this is a far more sensible business decision compared to diving in and spending a large amount of money setting up an option three custom-built store.

You can read a more detailed description about each of these categories in the next three blogs.

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There are a lot of names used to describe a website where you can buy stuff, so I thought I’d do a little research to see if I can get a clearer idea of just what to call this retail revolution.

Actually, finding this out hasn’t just been about satisfying my insatiable curiosity. If I want people to read my blog, or the rest of this website for that matter, then I need to be sure the words I use are similar to the words people are most likely to use to find me. This is a small part of the art and science of Search Engine Optimisation or SEO. And of course SEO is a vital factor for achieving success in any online business.

Thanks to the Google Keyword search tool it’s possible to find out exactly how many people are searching for any given word combination each month, either globally or Australia-wide. So to undertake my research I entered a few keyword phrases into the tool to compare results. The really great thing about Google’s keyword tool is that it comes back at you with a long list of suggested alternatives which you may not have otherwise considered.

One result in particular has both surprised and delighted me. Apparently both globally and Australia-wide it is almost twice as likely to be called an online shop instead of an online store. You see, I’m rather fond of my adopted Australian heritage and often try to dodge the creeping influence of USA cuture into Australia; I like to call my male friends “mate” instead of “buddy” and I’d far rather go to a dunny than a bathroom (what a silly euphemism!)

Anyway, in Australia we’d come across as rather pretentious if we were to announce we’re going down to the store. We go to the shops! So why should it be different online?

I have to admit, though, that when it comes to online jargon, we generally use Americanisms. So there are very few searches for the Nike online shop, for example, it’s almost always going to be the Nike online store.

Another interesting thing I’ve learned is a considerable number of people will search for a shopping cart, and I don’t think that a high proportion of these searches are looking for software solutions. Of course, searching for a shopping cart isn’t nearly as accurate as searching for a shopping site, yet twice as many people are looking for the online equivalent of a supermarket trolley.

Here is a chart showing the number of global searches for these names:

Number of global searches (1,000s)

Number of global searches for online shops

 

And here’s a similar chart showing the number of searches in Australia for the same keywords:

Number of Australian searches (1,000s)

What's an online shop called in Australia?

 

As you’ll see, I often refer to e-stores on this site. I think it’s a sort of cool and succinct name to call an online shop. But now that I’ve done this research, I think I’m going to have to refer to online shops more frequently if I want searchers to find me. And yes, I’ll also talk about online stores a whole lot more.

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Another useful business app well worth checking out can be found at Asana.com.

Asana is a lot more sophisticated than a to-do list and offers great ways to stay organised. One of the most sophisticated features is that it can integrate with the rest of your team. If everyone uses Asana as their to-do list, it offers ways to collaborate and communicate around tasks more efficiently. It’s ability to prioritise or drill down into more information is simply stunning.

Best of all for small businesses, the app is free for use by teams numbering less than 30 people.

Even if you’re a sole operator, Asana is worth looking at if you feel the need to get more organised in keeping track of your many projects. I particularly like the way Asana can be used as a simple CRM tool to list projects by clients, thereby keeping prospective clients constantly on your radar.

There is one fundamental drawback for me, however. It doesn’t integrate with my Google Apps Gmail account. I understand it is possible to integrate with my Google calendar, but what I really need is to be able to link to my emails as they arrive. That way I would be able to access most of the information I need by accessing relevant emails as I work through my tasks. According to the Asana feedback forum, Gmail integration isn’t planned anytime soon. Unfortunately a deal-breaker in my case.

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At ShopLab we talk a lot about automating your e-commerce business by using smart cloud-based software apps. Trouble is, once you start looking you’re going to find such a diversity of cloud based business apps to choose from, it could be all-too-difficult to find the right combination for your business needs. So how do you choose the ones which will really work for you?

Here’s my suggestion on how to start assembling the right suite of apps for your needs:

The apps you’re already using is where you start

Start with the core requirements or with what you’re already using.

For example, I started using Xero about a year ago after finding the MYOB LiveAccounts cloud solution to be woefully inadequate for even my very basic requirements (read my review on the difference between Xero and MYOB LiveAccounts). So for me, Xero is my starting point and I will probably recommend this wonderful accounting solution to anybody who asks me.

I have also opted for using the Google suite of Apps for my email and calendar requirements.

Now when I consider adding to the range of cloud applications my business uses, I will be sure to ensure they integrate seamlessly with Xero and Google Apps.

To use another example, if I have a client using Xero who wants to set up an online store, I’d introduce them to Shopify because Shopify integrates extremely well with Xero. I would then be recommending they build good records of customer dealings by using a Customer Relationship Management application which not only works well with Shopify, but will also integrate with another application for sending out regular newsletters. Along the way they might wish to extend the inventory functionality offered by Shopify and Xero by using another third party application with integrates well with both Shopify and Xero… and so it goes.

I invariable recommend a unique combination of cloud applications for each of my clients when I help them create an online e-store business , depending on the specific functionalities their business requires. The most important factor is that all their apps should integrate as seamlessly as possible.

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This blog post is part of a series considering the various categories of e-commerce solutions to consider to set up a new online shop. Read the first blog post here.

Option 3: Building your own custom store

Building your own custom online shop is quite a big step up from option two described in the last blog; hosted solutions. The biggest difference is establishment costs.

As an example of a custom-built e-store think of custom-built fast food outlets such as McDonalds or KFC where franchisees build their own distinctive building, complete with car-parks and children’s playgrounds. Of course they’re expensive but they have so much more freedom to build infrastructure that generates more sales, like a drive-through ordering system.

Up until a few short years ago this was your only option for establishing an online shop, outside of selling on eBay or other similar selling websites. So of course great numbers of online shop builders sprang up in every city. Generally these online store builders can be divided into two categories: developers who can write code and are great at developing functionality, or graphic designers who can produce great looking stores but may struggle a bit if you ask them to add something more complex, like loyalty voucher systems or deal-of-the-day promotions.

There are still a lot of these online store builders around whose entire business is dependent on convincing customers to build a custom e-commerce store at considerable cost when really a lot of those customers would be far better off looking to the established platforms like Big Commerce, Shopify or Volusion.

Nevertheless, a custom-built online store is still the option any aspiring e-commerce entrepreneur should aim for, primarily to save on the fees charged by hosted solution providers.

So if you are an established retailer with a larger budget and a clear understanding of the features you need to run your e-commerce business, what are the options to choose from?

There is a considerable range of content management systems which have evolved for building websites over the years. The best known of these is WordPress, although there are still more websites built on the Joomla platform. A Joomla website can be more complicated to set up than a WordPress site, but the open-source community offer a wider range of components or modules which can be incorporated into the site structure to add functionality. The two other top open-source content management systems are Drupal and Magento. These systems have all been built by many generous-spirited volunteer developers over many years, so the software is free to use and offer high levels of stability and functionality. Bear in mind, however, that you WILL require technical expertise to configure these platforms to suit your specific needs, so that is where the cost comes in.

These platforms are all excellent, but what sets Magento apart from the others is that it has been built specifically for e-commerce while the others rely on third partly add-ons, some of which are free and some of which require payment.

So while you might not need help from a website builder for building your online store in ways described in the previous two blogs, you definitely will need to pay for expertise to have your own custom online shop created. And who you choose to create your shiny new e-store is probably a bigger consideration than the platform they will use.

It’s worth adding one word of warning, however. Some website builders might try to steer you into using a content management system (CMS) which is a subscription platform, not an open source CMS like the ones described above. They might do this for their own vested interests, just as to earn ongoing commissions or because this is where they have built their expertise.

Don’t be fooled into believing that a subscription-based CMS is better than one of these open-source platforms, just because you’re paying for it! My experience is that the open-source options are invariably better solutions because they are supported by communities of thousands who update the platforms frequently and are constantly extending the capabilities of the systems.

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This blog post is part of a series considering the various categories of e-commerce solutions to consider to set up a new online shop. Read the first blog post here.

Option two: Move into a shop already set up for you.

This option is a bit like setting up business in a suburban shopping centre. Generally you sign a lease, put up some signage and make your store look great by stocking it with a great range of merchandise. You then cross fingers you sell enough merchandise to pay the rent and cover the other overheads, including your own income.

Sure you might need to buy a cash register and some furniture like a service counter or display shelves, but in this environment there’s a lot you don’t need to worry about, like customer parking, security and other facilities for customers.

The online equivalent is setting up a web shop using a pre-built platform. A lot of really technical stuff has already been prepared for you, allowing you to focus on uploading products photos and descriptions. You generally have a lot of freedom to change the look of the store buy choosing a pre-designed template and further configuring this with your preferred logo and colours. Of course you can even have your own domain name (your website address).

Much like the shop in the suburban shopping centre, you then become a destination store where people may even go out of their way to find you because they’ve heard about how good you are either through advertising or word of mouth. Turns out that setting up the store is the easy part, getting customers is the really hard bit. So that’s our focus at ShopLab; helping retailers learn a whole lot of new skills to attract customers online.

The top three alternatives in this category include

  1. Big Commerce
  2. Shopify
  3. Volusion

With these options you generally pay monthly ‘rent’ to use the platform and you should be prepared for other transaction costs associated with running an online store. These fees are not necessarily charged by the platform host, they include payment gateway fees and/or credit card commissions.

Of course there are many more hosted e-commerce platforms to consider outside the top three. These include:

  • Lemonstand
  • Shopping Cart Elite
  • Ashop Commerce
  • Pinnacle Cart
  • 3Dcart
  • goEmerchant
  • CoreCommerce

Of course choosing between these alternatives can take a lot of homework, but there is one key factor that seems to be ignored by all the websites I’ve seen offering feature comparisons. That’s all about the other apps and platforms they connect to.

Think of your e-commerce business as a Lego set. By assembling a great collection of functionalities provided by multiple vendors, you can build a highly integrated system that fulfils and perhaps even automates many of your needs. The functions may include marketing, account keeping, inventory control, shipping automation and customer relationship management. The list is very long.

If you’re setting up a new shop in the physical world, location can be everything. When it comes to setting up your online store, I believe the key consideration is connectivity. The range of software apps and platforms your store will connect to for your future growth needs.

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This blog post is part of a series considering the various categories of e-commerce solutions to consider to set up a new online shop. Read the first blog post here.

Option one: Where the shoppers are: Large platforms like eBay or Facebook

Setting up an online store on one of these platforms reminds me of a business model I admired enormously when I was a young teen, it was called the Hippy Market. (Okay, perhaps I’m showing my age here… this was back in the 70s!)

A really cool dude, a little older than all the other hippies at the time, rented a somewhat run-down rambling old building in the middle of the city. He then carved up his floor-space with painted lines on the floor and rented small sub sections to lots of other hippies who invariably sold jewellery, clothing and furniture they had made. The big advantage for each of these sub-lease holders was that this really cool venue attracted a considerable and continuous crowd of young shoppers who wanted to be a part of the scene, so there was always a steady stream of potential customers passing by their little patch. It didn’t matter if those micro business owners weren’t around at the time a customer wanted to buy their stuff, there was a cash register next to the exit where all purchases were paid for. (Well that was the theory, anyway!)

In much the same way, you can set up a store on eBay. The biggest advantage of doing this is that this is where the people are, so your marketing becomes a whole lot easier. People looking to buy the products you sell WILL find you there by searching for you on eBay. Of course the big down-side is that you will have so many competitors on eBay offering similar products, just like the hippies did. So of course your primary point of difference will be the biggest reason why anybody shops on eBay: Price! And if you’ve already had experience in retail you’d know that being the cheapest isn’t always the best business strategy.

Setting up an online shop on eBay doesn’t require any technical skill, so you can do this all by yourself if you decide this is the way to start your online e-commerce journey. This can be a great way to get your business up and running while you sort out the other essential details for your business, like sourcing product supplies and researching your competitors. Of course, the products you sell on eBay can be for a fixed price rather than participating in the auction system eBay is known for.

To build your business on eBay you’ll need to work your way up the ranks, starting out as a regular registered seller. There are a few hoops to jump through to establish a Basic Shop, then a Featured Shop, then an Anchor Shop.

You should expect to pay rent in the form of a monthly subscription as well as an insertion fee for each item you load onto the system, but the real crunch is the fee you’ll pay for each product sold. This can take a substantial bite out of your profit margin with so-called ‘value’ fees as high as 12%.

You can also set up a store on Facebook using one of numerous add-on apps now available. You won’t face as much competition as on eBay, but you’ll need to put more effort into attracting customers into your shop. This could be a great way to start out if you already have a lot of potential customers you’re connected with on Facebook.

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If you share my fascination for Futurology, the study of future developments in science, technology and society, you might like to explore the work of Australian CSIRO scientist Stefan Hajkowicz. He has co-authored a publication entitled “Our Future World – Global megatrends that will change the way we live”. Those of my readers who are working hard to establish an online e-commerce business will be heartened by some of his observations.

Dr Hajkowicz and his team from CSIRO have identified six megatrends that they reckon will change the way we live over the next twenty years. Included among trends relating to the aging population, the rise of Asia and the perilous state of the world’s biodiversity.

There are two trends Hajkowicz has discussed in his work which are likely to be of great interest to readers of this blog:

  • Structural change in the retail sector fuelled by online competition and
  • The “Anywhere Working City” whereby people will work from home or public spaces rather than being office-bound.

ShopLab has been established specifically to meet the needs of these two predicted societal changes:

The freedom to work from anywhere

I think I might go just a little further than Dr Hajkowicz and look beyond the move from offices to public spaces. Owners of e-commerce businesses who get themselves sufficiently organised in their business operations will increasingly enjoy the privilege of being able to work from balmy country hamlets or picturesque coastal towns rather than cities. (The rollout of the NBN will make this even easier.) Better still, many more online retail store owners will be able to enjoy being able to continue to operate their business while travelling for significant portions of the year, either Australia-wide or internationally.

A retail revolution characterised by very different consumer behaviour

Traditional retailers who are attempting to ride out a perceived temporary downturn in retail spending should take heed of Dr Hajkowicz’s advice, especially in regards to his observations of the need to change business models in response to the rise of the digital world. Retail is being changed drastically, inexorably and permanently.

Traditional retailers will need to continually evolve their business models if they are to avoid the fete being experienced by so many Australian retailers turning belly up.

If you would like to read more about Dr Hajkowicz’s work, I recommend his contributions to the academic blog “The Conversation” or you might like to download an excellent summary describing Megatrends on the CSIRO website.

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Every week our news seems to carry new stories of retail businesses going under with fingers pointed at the rise of online retail.

But talk to a bunch of online store owners and you may also hear grumbles about tight margins and increasing competition.

The fact the retail game is changing is a given. They question is, how to take advantages of the changes being brought about by the revolution?

1. Start learning about e-commerce now

There’s a lot to learn if you’re a retailer who’s new to the online environment, but the learning curve is only going to get much steeper. Soon.

I believe than in just five years’ time when we look back at the current online retail landscape we’ll marvel at how relatively uncomplicated it was. In other words, if you think it’s hard to learn how to operate in the current online environment, you ain’t seen nuthin yet!

E-commerce is predicted to experience exponential growth in the next few years. Forrester Research predicts Australian ONLINE retail sales will reach A$33.3 billion in 2015.

With that much money up for grabs you can be sure the big end of town will become more and more sophisticated in their techniques, driving innovation and technical development. The rollout of the NBN will make it more and more possible to integrate video and other immersive experiences to entice shoppers. Already fragmented marketing channels will diversify further.

If you’re a retailer who’s been toying with the idea of moving at least a part of your business online, the sooner you make a start, the sooner your education can begin.

2. Extend your horizons

A lot of my clients typically have only a handful of stores which are limited by a common factor; geography.

It can take a rather big brain shift to start thinking nationally or even internationally, but that’s the reality of online stores.

The key point of difference is how you market your business and I am frequently amazed at how many of my clients struggle to make this change in their thinking. A marketing strategy that’s focused on attracting customers from a local district or even just passing traffic is obviously going to require a completely different marketing plan if you plan to acquire customers from around Australia.

3. Think niche

I am convinced this is the single most important strategic consideration which so many aspiring online retailers get wrong, and this includes the big boys running large traditional retail businesses who are attempting to open up to online shoppers.

This point is closely linked to the above point about extending your horizons to broader markets. It can take a profound shift in thinking to get this right.

Rather than thinking along the lines of the department store concept – servicing a wider range of the shopping needs for your customers – think boutique. The future of online retail is niche specialisation. If you want to think bigger, think multiple boutiques which can cross-promote using smart data marketing management.

4. Manage your brand strategy carefully

A significant strategic issue confronting retailers considering taking the operations online is the issue of how they price their merchandise.

Like it or not, consumers have come to expect to pay less for goods bought online. A lot less. So if you are selling the same products in your physical store and in your online store, you’re inevitably faced with either cannibalising your physical retail operation with cheaper online sales or at the other end of the spectrum, hardly selling anything online because your prices match your physical store, not your online competitors.

How you solve this conundrum boils down the brand strategy. Unfortunately there are no ready answers for this dilemma, every situation is different.

5. Lift your game

As with every other revolution, it’s going to boil down to the survival of the fittest.

That means that every retailer, traditional or online, will need to carefully reconsider how they distinguish themselves from their competitors. How can they create a better buying experience for their customers?

A significant sector of traditional retail WILL survive, perhaps even thrive, once they clarify their point of difference. Research shows consumers prefer to buy groceries and furniture from physical store. Well for the time being, anyway. 18% of people like to touch, preferring the inst-store shopping experience.

Online web stores will need to offer better looking stores than their competitors with easier navigation and faster delivery times.

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The retail revolution is often characterised by two types of retailers, either online stores or traditional “bricks and mortar” physical retail stores. But it’s not all black and white. Perhaps a warm shade of grey should be the preferred option.

The alternative model I’m referring to can be described as the “click and bricks” alternative or, sometimes referred to at the “clicks and mortar” retail model. That is, combining both physical stores with online e-commerce stores.

Fact is, old-world bricks and mortar retail operators are often better placed to extend their business to an online environment than what they might at first realise.

Consider this:

  • Traditional retailers understand consumer behaviour better than most online retailers who might be cloistered behind firewalls. Old-time retailers have experience knowing what’s important to their customers, how to get them to reach into their pockets.
  • Experienced physical retailers also understand their range of PRODUCTS better than most, the difference between one brand and another, what sells and what doesn’t shift easily.
  • Online stores can reach a whole lot more customers, both nationally or internationally
  • Online stores require lower overheads than traditional retail outlets

 So what’s stopping traditional retailers from applying this valuable knowledge and special insight by expanding their business to the internet?

The truth is, the biggest problem for traditional retailers contemplating the internet often boils down to a simple issue of confidence. Or described in another way, fear of finding a way through the strange new world of online retail.

In actual fact, learning how to use the internet is often the easy part of the formula for online retail success. Traditional retailers already have so many of the required of the resources in place, along with much of the knowledge and infrastructure they need to build a thriving e-commerce business.

We have developed a series of e-books specifically designed for traditional retailers to teach them the basic things they need to know to take their business online. These are available for free, all you need do is ask!

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