The Black Hole: Why Many Independent Retailers Struggle to Sell Online

The Black Hole:
Why Many Independent
Retailers Struggle to
Sell Online

Working for an independent brick and mortar retailer for 5 years and now working with them for 12 years on the e-commerce side has given me a unique perspective on why selling online can be elusive for some.

If you would like to skip the next two thousand words and get it all summed up in one sentence then here you go.
Steve Berke
June 09, 2021

Owners don’t treat their online store
like a brick and mortar store.

It sounds so simple and something they should inherently know, but for a variety of factors it’s not. The core reasons independent owners have made their businesses successful are:

1. They work hard.

2. They hire the right people.

3. They listen to their customers.

4. They provide a great in store experience.

5. They differentiate themselves from their competition.

I was asked by one independent owner recently for a “blue print, template, step by step instructions” on how he can have a guaranteed successful online business to complement his wildly successful brick and mortar business. While I usually don’t give my secrets away for free, I figured I could make an exception, so I gave them to him.

1. Work hard.

2. Hire the right people.

3. Listen to your customers.

4. Provide a great online user experience (UX).

5. Differentiate yourselves from your competition.

Many independent owners have been thriving for decades, so these things don’t scare them or they would have gone out of business a long time ago. However, once you look closer you see something that does scare many owners and it can be summed up in only one word.


Change

“The only constant in business is change” which means owners have been here before. However, many I meet fail to change and do not apply their same core principals to their online business. It all starts and stops at the top; the owners themselves and 1. on the list.

Most owners can’t work hard on their online business because they are already working hard on their brick and mortar business. I have yet to meet an owner of any size, in any vertical, anywhere in the world who said, “Sure. I have an extra 50-60 hours a week to wear another hat.”

Yes, there is a “can’t teach an old dog new tricks” aspect happening as many owners in the independent channel are on the north side of 60, so this whole technology (change) thing is certainly harder for them to grasp. But that’s not the core issue. It’s the time or lack thereof.

Okay, so owners don’t have time to do a lot of things this isn’t exactly a revelation. That’s why there is 2. on the list as they just hire the right people to get the job done. Problem solved.

Only this creates a bigger problem as many owners don’t know who to hire, so often they hire the wrong people. With the right people a business can do tremendous things. With the wrong people a business can go out of business.

They are looking for
the wrong people
to begin with.

Instead of looking externally for an e-commerce manager with business experience they look for an “IT guy” with IT experience. The world certainly needs IT guys and my company would not run without them, but they are there to help build the online store, not the online business. They need to be an integral part of the team, not run the team.

Instead of looking internally at a top performing store manager, salesman, or marketing lead who can learn the e-commerce manager position they look for an underachiever who isn’t an asset to the company. Why? An e-commerce manager is still not seen by many owners as a real full time position in their company, so taking away a top performer from something that does make money to put them on an unknown is viewed as counterproductive.

Imagine an independent opening a new flagship brick and mortar store that will be their most visited and visible. The owner first goes to hire a store manager who will help build the team and run the day to day.

Would they look to hire outside the company for someone with IT experience (IT Guy) or someone with business experience (Business Guy)?

Business Guy

Would they look to hire within the company and promote a bottom performer who doesn’t even do the bare
minimum or a top performer who excels and goes above and beyond?

Top Performer

If an IT guy or bottom performer was running that flagship brick and mortar store then I would question the long-term profitability and viability of that location. Same goes for having no manager at all. In the brick and mortar world this would never happen to any store. In the online world, it happens every day and whether owners like it or not “your website is your flagship store; it’s the most important store in your arsenal” and having the right person at the helm is a necessity.

The buck stops here as 3-5 on the list won’t even come into play without an engaged owner and the right person leading the way. Only the buck doesn’t stop, it gets passed externally and a phrase I have heard on multiple occasions, from multiple independent owners gets thrown around.

“ The Black Hole ”

No, not the one in space. The one in a business where money keeps getting dumped into an initiative with no ROI. Are the owners, right? Can their online business become the proverbial black hole they fear the most?

Yes

Only not for reasons most think and this goes back to the early days when an online store was a minimum 6 figure investment. Ten plus years ago it was expensive to get into e-commerce and out of the reach for almost all independents. They have all heard the horror stories of enormous sums going into technology with no results. This should scare anyone.

Flash forward to today and Open SaaS e-commerce platforms like BigCommerce have leveled the playing field for independents. Even five years ago if I would have told an owner in the appliance vertical that they could be on the same technology, infrastructure, and 24/7 support network as GE Appliances for only $299 a month, then I may have been called crazy.

If I would have told a owner in the furniture vertical that they could migrate to the same highly customizable and scalable platform as an e-commerce startup who has raised 55 million to date with only a 4 digit investment then I may have lost all my credibility. Burrow Gets Cozy With New Ecommerce Platform

Over time, technology (tangible or not) gets better, more intuitive, sleeker, faster, and more affordable. No different than the products they sell, but independent owners still predominantly attribute a direct correlation to the black hole and technology. Also, agencies like ourselves often get sucked in as well. Technology and those who support it should be independents best friend, not their enemy.

After I already put fingers to keyboard on this blog post I ran across a polarizing article from Forbes “Independent Home Furnishings Retailers Are Losing. Only The Big And Virtual Will Survive.” I’ve since read several compelling counter arguments, so to please everyone I suggest to alter the headline to “Many Independent Home Furnishings Retailers Are Losing.” There are some independents who fully embrace the new omnichannel reality, but I would put them in the minority.

If Technology Isn’t the Cause of
the Black Hole, What Is?

In Feb 2020, I was at an event in Houston where I was set to present with some colleagues in front of a small buying group of about 10 independents on how they can enhance their e-commerce business. Right before I was about to speak the head of the group stood up and said, “If you do not do this, you will go out of business.” While I would not have been so blunt, certainly echoed his sentiment. Now he was not referring to next month, next year, or even the next 5 years. This was more of a 10-15 year down the line statement.

Look at that date again. At this point Covid was still just a joke or a punch line to many. I know I was still sending memes on how the Corona Virus was only going to be bad for Corona Beer sales. Then a month later the world changed overnight. Stores closed and e-commerce boomed, which gave those words immediate merit.

This of course meant the independent owner who made that bold statement worked even harder to get their online business up and running, right? They would put the right people in place, right? Then everything else would take care of itself, right?

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5 Effective Ways to Promote Your Small Business Online

Catching fishes has never been this easy.


Here’s a fact more solid than reality: some of the biggest marketing campaigns in history is driven by a multi-million dollar budget. These iconic campaigns swept across the world and propelled their marketed brands into staple names of their respective industries. Nike’s Just Do It, Coca-Cola’s Share a Coke, and Apple’s Get a Mac will forever be etched on the memories of current generation consumers and will be remembered as the campaigns that must be.

 

Photo by: http://constructionexec.com/article/the-fishermans-model-catch-new-work-with-sales-and-marketing

But for the MSMEs (Micro-Small-Medium Enterprises), those campaigns are tough acts to follow. To illustrate things, mind you, it’s like fishermen are required to have a huge boat to take home a large catch.

And yet, it was far simpler back then—there was no technical know-how; the breadth of knowledge and awareness of billions of consumers are limited to mostly three channels: radio, print media, and television. The fishes were smart, but they almost instinctively fall for the bait every time.

Today, however, it has become much more complex—but it was never this easy, and cheap for that matter. Yes, the fishes—consumers—are way smarter in this era, but modern fishermen—marketers—are never this prepared. Some give nearly all the credits to the astronomical rise of e-commerce and online marketing. We’d like to call it evolution—of both the fisherman and the fish.

Nonetheless, we live in the second decade of the 21st century. The Internet dominates all forms of media, so we thought it could be a good thing to collate all the ways and know-how of the marketing titans—Nike, Apple, Coca-Cola, you name it. Read on and learn.

EFFECTIVE WAYS TO PROMOTE ONLINE

1. Website Optimization

Arguably the most convoluted method to market online, Search Engine Optimization (SEO) can help you make serious traction in any industry. Can you imagine? This elaborate sets of processes can pave the way for near-limitless amounts of internet traffic to any website or online store you create.

Yes, it holds that much potential. But then again, it isn’t quite that simple. SEO is among the most complex technical undertakings you can embark upon for your business’ growth. We highly suggest employing—not just anyone—a highly skilled SEO specialist for optimal results. You can also use this web tool to analyze if your website is SEO optimized.

2. Giveaway Stints

Giveaway promos are highly popular among the growing millennial market. Here’s a tip: find something in-demand these days (the latest iPhone, an airplane ticket to a famous vacation spot, or concert tickets for a whole group) that you can give away and co-sponsor the whole thing with another company or perhaps with a celebrity. Your goal is to reach a wider audience and actively engage with them using these promos. Most importantly, it will add value to your business in the public eye.

3. Email Marketing

One of the oldest effective ways to promote your business online is through email marketing. To be effective, you need to attract the right niche in the market. It is almost always imperative to gain and establish a core customer base—individual consumers who are not just customers but are loyal patrons of your business and/or product.

So how do you attract the right customers? Create compelling content that resonates and leaves something to be desired by the customer. The goal is for them to sign up, and once they did, you’ve still got work ahead of you by having to share useful information with them periodically.

4. Mobile Markets

Never neglect mobile users. A study by New York University shows that smartphone displays have become the primary screen of humans since its inception in the late 2000s. For emphasis, a recent survey suggests that a staggering 73% of daily Internet users access the Web through their smartphones. The point? Make sure you take advantage of the different mobile markets (Apple App Store, Google Play Store, and Amazon Marketplace) while having a mobile-friendly version of your website so that customers can access your pages on the go.

5. Collaborations

Photo by: Photo by: https://www.create.net/blog/how-to-collaborate-with-bloggers

B/Vloggers have become powerful influencers. A single post of an ultra-popular internet celebrity (ahem, PewDiePie) can dictate the success of a particular product or brand. These personalities can rival the endorsing power of conventional celebrities—an undeniable testament of the growing niche of the online market

What does this mean for your business? Reaching out to popular b/vloggers in your niche is most likely an effective way to market your small business online. This works well if you have something of value to add to one of their posts (ex. Product ambassadorship). A great way to make this possible is to offer your products and/or services to a particular b/vlogger whom you think correlates to your line of work. It might be difficult at first, but it would be worth the shot if you managed to secure a sponsorship post. Imagine all of that b/vlogger’s followers buying your product or service. Ka-ching!

As the saying goes, there’s no easy way to catch the fish. While this proves true to nearly all businesses, online or brick-and-mortar, technological advancements have enabled us to fish almost effortlessly. These effective ways to promote your small business online will yield far better results if implemented properly and systematically.

And that’s what we do best. Our Internet-based commerce solutions have been a great help to dozens of small companies who want to find their niche in a saturated online market. Want to put our services to the test? Click here and let’s talk.

Harnessing the Power of
Luxury

Understanding the spending habits of the opulent and the wealthy


There’s a reason Salvatore Ferragamo doesn’t like making infomercials. That Maserati would only run TV ads in Europe for households earning 500,000 euros per capita. That Cartier remains a major powerhouse in embellishing the necks of superstars walking down the carpet of the annual MET Gala.

These brands—if they still prefer to be considered as such—tend to focus on, well, luxury. The glamour and glitz they inspire. The ostentatious quality they command. The sheer opulence that becomes synonymous with their logos and taglines that becomes a part of that brave, excessive consumer.

So whether you’re trying to sell luxury products or tap into the multi-billion dollar ‘luxury market’, your target audience needs to feel as though what you’re trying to sell—either a product or service—is a physical manifestation of luxury.

But how does the world perceive luxury? Wealth trends are constantly changing, so exorbitant prices are not always associated with luxury. To be perceived as luxurious, a product should’ve been created with the highest brand value and pricing power by leveraging all intangible elements of singularity—i.e. time, heritage, country of origin, craftsmanship, client portfolio, etc. And to properly allocate these intangible elements so as it could translate into real ROI, we need to understand the luxury consumer—and the way they swipe their cards or empty their wallets of cold cash.

Understanding the Luxury Consumer

Then again, wealth changes. But there’s more to that rule than we thought we know. Reaching the same luxury consumer today can be different a few months from now. When you try to understand the interests and buying habits of the ultra-rich (and any other consumer, regardless of class), you’ll discover more ways to influence those types of consumers and even new ones.

Strategy #1: Never underestimate a consumer. For the brick-and-mortar owners, wearing signature items does not guarantee a luxurious purchase. They might be a show-off, for all we know. The truth is that there are other chunks of the market who are equally likely to purchase these high-end products, and you can’t neglect them.

Let’s try to simulate that in a real-life scenario.

Think about that customer who has been saving up for that Oscar de la Renta cocktail dress she wants to get online. And, good lord, it’s a five-grand dress; you can buy five iPhone 11’s with that dress. But she’s desperate for it. She’s saving all year for a screenshot of that checkout page so she can show it off to her friends at work or as a treat for her husband. The point is: these consumers—regardless of their purchasing power—are so drawn to high-end items that they’re willing to save and splurge.

This tendency of the modern shopper gives you an opportunity to nurture them as loyal, lifelong luxury consumers.

This formula enables marketers to produce legions of loyal luxury consumers that serve as the core base of their target market. Because the luxury market is no longer solely dependent on managing brand reputation and recognition, marketers have to understand consumer behaviors, clarify their goals and intentions, and use market data to motivate even the most unsuspecting buyers.

These qualities will help you in establishing a loyal customer base.

Keeping up with the trends

Building a strong marketing foundation is just the first step. There’s much more to learn. Take into consideration the following questions:

  • How do you keep that luxury appetite going?
  • What can you do to captivate your customers?
  • What methods get people to recommend your brand as a luxury product?
  • How can you maintain their interest?

Luxury marketing is perhaps the most tedious of all the disciplines of marketing. It will require you to be nimble and adept; your recognition of the fact that there isn’t one type of customer coming through your door is easier said—and realized—than done. Even more so, they have ever-changing needs and desires that must be satisfied.

Strategy #2: By tailoring your E-commerce mechanisms, you’re able to communicate your latest and hottest offerings in ways that are accessible and appealing to more individuals. Through the development of targeted messaging, your business can create not just a good foundation but also a robust connection with your customers for your brand. A reliable E-commerce side for your business is now a must for luxury brands.

Another luxury marketing trend is the “buy it to experience it” mantra. It’s a mix of product plus service goodness targeted for the decadent rich—the retirees, the pensioners, the “Oh, life’s good” market. They may be more inclined to buy luxury products associated with travel and leisure. Case in point: luxury marketing will allow consumers to feel that they are part of a novel and elite experience—something intended for the privileged, the opulent, and the decadent. Believe us when say: nothing is more thrilling for the ultra-rich, or even the modest spender, than knowing that they’ll be subjected to the adjectives ‘tailor-fit’, ‘personalized’, ‘custom-made’.

“This is what I am”

Let’s make this clear: luxury is not only about exorbitant price tags enclosed in laser-secured glass counters. For a product—or a brand—to be considered ‘luxurious’, it must be unique and incomparable. Luxury, for most consumers, is the expression of a taste, of a creative identity; it’s a bold manifestation of the statement “this is what I am.” Salvatore Ferragamo has an identity associated with authenticity. Maserati denotes power and exclusivity. Cartier is a timeless label of wealth and extravagance. These brands give their consumers that particularly powerful feeling of luxury that helps give an impression of privilege and incomparability.

Strategy #3: In the world of luxury marketing, you have to clearly, or even explicitly, position your product or brand as luxury or high-end. You will find this concept of positioning an advantageous mechanism for driving sales. Every classic brand has to specify its positioning, and then convey it through its products, its services, its price, its distribution, and its customer relations.

Look at Apple, for instance. It’s not a luxury brand, but how they positioned their smartphones created an immensely insurmountable gap even for its closest rival Samsung. Their marketing mantra (pseudo-luxury, if you will) created such a difference in value and position that it manifested a preference among the global market. The result? Apple may not be the best-selling brand, but it eats up profits by 73% of the entire smartphone industry. Now that’s luxury at its finest figures.

Then again, luxury marketing is all about personalization and tailor-fitting. Learn more about how targeted marketing—luxury or not luxury—can benefit your business by requesting a call from one of our E-commerce experts. Click here to visit our website.

The Rise of E-Commerce: What It Means For Your Business

No force on Earth can stop the rising dominance of e-Commerce. By 2021, it will become the largest retail channel in the world.

 

The numbers don’t lie.

US figures for online shopping in 2016 accounted for almost $395 billion in sales. This represents a whopping forty-two percent jump YoY (year-on-year) from 2015. In China, e-commerce sales accounted for over 26 trillion yuan in 2016, posting a YoY growth of 19.8%. The Asian giant accounts for 39.2% of all global e-commerce receipts made in 2016, with a lot of growth potential left untapped in this market alone.

Set for global domination

E-commerce is well on its way to becoming the largest retail channel in the world by 2021, a notion made and supported by Euromonitor International, a leading independent provider of strategic market research. A plateauing growth in mobile devices (eg. Smartphones, tablets, notebooks) poses a considerable risk, however, but won’t likely affect the momentum of e-commerce rising. It will soon outpace the sales of brick-and-mortar kings like supermarkets, grocers, boutiques, concept stores, among others.

In 2021, the Asia-Pacific region will lead towards a total e-commerce lifestyle with a 13% penetration rate. The channel will not reach the top spot in Western Europe, however, and will require businesses more aggressive integration of the technology on their company strategies. North America is not too far behind with the combined e-commerce markets of the US and Canada accounting for 16% of global retail sales.

What businesses need to consider

Being an online merchant, it is essential to be updated with all the e-commerce trends. Even traditional businesses have transitioned or have been transitioning to digital means of marketing and sales strategies. For online businesses, it is a compulsory task to focus on web development and/or mobile app development based on your industry. Since the onset of intelligent mobile devices and along with it the pioneers of e-commerce, the way people do shopping has completely changed. There’s no more stopping to an industry that is rising at an unprecedented pace. All we have to do is to adapt.

Integrate your existing business with the power of e-commerce. AOC is here to help you all the way. For more information, click here.