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Bricks and Mortar Retailers Can Triumph over Online Competition

May 1st, 2012

Category: Online Retailing, Point Of Sale Systems


According to a recent article in The AustralianOnline retail sales are growing at more than 15 times the rate of the overall retail sector, highlighting the need for traditional merchants to accelerate their internet sales strategy.”

Additionally, “online spending totalled $10.9 billion over the 12 months to the end of February 2012, accounting for 5 per cent of all retail spending.” The article also mentions a Dunn and Bradstreet survey conducted last month which found that 56% of surveyed retailers “were concerned about the threat of online competition”.

Why you needn’t be concerned

Beneath the current gloomy media and industry statistics is a clear message to bricks and mortar retailers: you need to jump onboard the e-commerce gravy train. And jump on quick.

The old adage ‘if you can’t beat ‘em, join them’ holds true because online retailing isn’t going away and is only growing from strength to strength.

In fact, a recent study supports the growing pervasiveness of online shopping in Australia. Recently, Power Retail Extra notes a comprehensive global study by IBM that Australian consumers lead UK and USA in using three or more technologies to shop, ranging from website, mobile, social networks to retailer website, co-created products.

What’s really encouraging for retailers and unfortunately isn’t being shouted from the rooftops is that a bricks and mortar retailer that decides to go online has a better chance of success than a brand new online retail operation. This is due to a number of factors:

  • Local market recognition (seen as less risky)
  • Established brands (seen as more trustworthy than new online retailers)
  • Established relationships with your customers
  • Established supplier relationships
  • Proven business processes
  • Access to expert and knowledgeable staff
  • It’s less costly to bring bricks and mortar customers online than to attract new customers to a new online retailer.
  • Bricks and mortar customers tend to be more loyal so will likely follow you online as well.

Why bricks and mortar plus online retailing is a powerful combination

But the biggest advantage by far when you take the step into online retailing is that it has the effect of driving more customers to your retail stores.

The cumulative effect is this: not only are more customers now buying more stuff in-store they’re purchasing online as well – and this is during normal business hours only. Sales are on the up and you’re not paying attention to the negative press about the dire state of the retail industry.

Even better, at the end of the day when you shut shop, you’re still open for business, albeit online. Some consumers will be new customers who only shop online, others might be your current customers who didn’t have time to visit your store that day, and still others will be customers that don’t live in your local or even geographical area.

Profits go up and suddenly you think, hang-on, I think it’s time to open another store and I might also introduce international shipping for my online operations because there are a lot of consumers in Japan and South America that are buying my products too.

Is it really that easy? Well, there are a number of things to consider when moving into online retailing such as having to categorise all your stock (something you don’t need to do in a bricks and mortar operation) and uploading images of stock. Both are arduous processes but worthwhile once you see orders and sales flow through.

Though, the most important thing to consider is coping with demand for your products which tends to increase in the online space. One of the best ways to not succeed online is to anger consumers who buy a product and don’t receive the stock because you’ve run out of the item.

While this is an enormous issue, there’s a simple and straight forward way to overcome it.

Integrate bricks with clicks to really profit

The key is integration. That is, you really need to integrate your offline retail business with your online operations so they work as one seamless entity. This enables you to easily track and manage stock cross all sites whether online or in-store. (Hint – see: CONTROL e-POS)

Disadvantages if you don’t integrate online sales to your storefront business

You may think, ‘well I’m just going to get my feet wet in the online retail space. I’ll start with a simple ecommerce site before I dive right in and make a big commitment’. And this is still a good thing as the aim is to get into online retailing. You have to start somewhere. But consider the disadvantages if your online business isn’t integrated into your bricks and mortar business:

  • Labour intensive management of ecommerce sites
    – More costly
    – Prone to human error
  • No consolidated view of stock resulting in:
    – incomplete inventory picture, impacting purchasing decisions
    – Stock run-outs leaving consumers fuming and departing
  • No consolidated view of sales
    – Difficult to analyse true profitability
    – Inability to make astute business decisions
  • No unified insight into your customer preferences
    – Ineffective marketing campaigns

Benefits integrating bricks and mortar with your online site

Integration enables you to run your in-store and online retail operations cost-efficiently, effectively and profitably. For example:

  • If a product suddenly becomes unavailable (out-of-stock or sold out), your online site can by default automatically adjust itself (without human intervention) by making the product disappear as a sale item.
  • You are able to easily manage different price points (if you so wish) for your online and bricks and mortar stores.
  • You have a consolidated view of all stock across multiple stores (including the online store) allowing you to easily manage stock (move; deliver, back-order, new orders).
  • Purchasing new stock is a based on accurate stock and sales figures across all sites.
  • If you have multiple websites each with a different business approach yet selling the same product, you can easily set different price points while managing them from one central area.
  • You can easily analyse sales across all sites (online and bricks and mortar).
  • Your campaigns are more targeted and effective as you have one consolidated view of buyer’s sales history and preferences in-store and online.

Other benefits of integration include:

  • Customers can order online but pick-up at the store. A study found that one out of every three people who bought something online but went to the store to pick up the product also purchased other products.
  • Your customers can research your product online and are armed with this information when they come to your stores. This improves the speed of a sale and more time to up-sell or cross-sell.
  • It helps you strengthen your relationship with customers as you’re better informed of their purchasing history and preferences online and in-store.

CONTROL e-POS – a proven integrated e-commerce system

Whether you’re thinking about jumping into the online retail space or you’re already there, you might want to consider investing in CONTROL e-POS designed specifically for bricks and mortar retailers that have online stores.

The CONTROL e-POS solution is a fully featured online store that is tightly integrated with other CONTROL POS modules including Point of Service, Order Entry and invoicing, and Inventory Management. And importantly, it comes with all the benefits mentioned above. To find out more click here or contact us today on 1300 646 536.