Even small and medium-sized retailers now have their own online shop as a matter of course. When it comes to online sales, they often orientate themselves towards the Internet giants, although their requirements are completely different. In a guest article, Christopher Möhle from the digital agency Turbine Kreuzberg explains how retailers can meet the challenges of the market and improve their own online shop.
The booming e-commerce and recurring lockdowns have had a lasting impact on buying behavior and shifted it towards online shopping. According to EHI, the turnover of the top 1,000 German online shops increased to 68.8 billion euros in 2021 (from 51.7 billion euros in the previous year). The growth of suppliers in the "non-traditional" areas such as DIY products or garden and pet supplies is astonishing.
Among the top 20 online shops, companies such as Hornbach and Ikea recorded the strongest growth. At the same time, retailers are facing competition from the manufacturers themselves, who are increasingly establishing themselves in digital direct sales – keyword direct-to-consumer (D2C).
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In order to be successful online, even smaller retailers need a real-time overview of products, availability and physical locations.
In order to prevail in the future, retailers must not ignore current developments. It is important to optimize your own online shop.
Retailers as technology companies?
In a Handelsblatt interview from last November, Andreas Schobert, Chief Technology Officer on the Hornbach Management Board, was asked about the reasons for the company's growth. His answer was seemingly simple: "Retailers need to become tech companies themselves." It's about offering features and services that set the retailer apart from the competition.
Because one thing is clear: In the age of the Internet, customers can no longer be lured with opaque price structures and simple advertising promises – prices are compared online too quickly these days.
But the digital channel in particular can be used excellently to connect it with offline business – for example through click & collect functions, which have been significantly expanded in the course of the pandemic.
New services require real-time visibility
However, such services require that retailers always have a real-time digital overview of all products, availability and physical locations. However, the Hornbach case is not suitable as a general example for every company. The necessary tech investment is often not worthwhile, especially for smaller retailers who neither have large development teams nor have technology firmly anchored in the company for years.
However, that does not mean neglecting the digitization of your own business and thus the online shop. Rather, in competition with the "big ones", retailers should reflect on their strengths – i.e. their experience in delivery and advice – and rely on proven systems when it comes to technology. Specifically, this means:
Tip 1: Use e-commerce infrastructures with low barriers to entry
Concentrating on one's own strengths initially means leaving as many services as possible that are outside one's own comfort zone there.
So the question arises for the commerce infrastructure of choice: What is the feature level of the provider? Does he offer a user experience set that is suitable for my market segment and can he take over things like customer support or fulfillment? These selection criteria are important to maintain focus while meeting the needs of the business community and customers.
Tip 2: Don't be afraid of the cloud
Cloud solutions such as Shopify and Co. as well as software-as-a-service providers are always preferable, especially for small and medium-sized retailers. The reason for this is the high degree of agility of as-a-service solutions: Instead of setting up and managing an on-premises solution locally, shops can be put into operation in the cloud within a very short time – and achieve similarly good results there in much less time Time.
It is important to ensure that the implementation of the shop and the attached systems is kept as lean as possible. Any extensions can adapt the system to the respective requirements and design it individually.
Tip 3: In depth instead of in breadth
When it comes to product range, retailers find it difficult to compete with large platforms and marketplaces. After all, that is their core business. Nevertheless, retailers also have advantages: They impress with a high quality of advice and in-depth information on the individual products.
Ideally, retailers should include all information and product experiences in their online offer in order to make it easier for customers to make purchasing decisions. This can mean incorporating insider experiences and your own product tests into the product descriptions.
The aim must be to recreate the personal sales pitch as realistically as possible. Some retailers, especially in the handicraft and DIY sector, are already doing this successfully with YouTube instructions and "deep dives" into individual products and models.
Experience remains decisive
Whatever the future of e-commerce will bring, whether it's social commerce or virtual shops in the metaverse: convenience and the feeling of personal support will always influence purchasing decisions.
And that's a positive sign for retailers. After all, nobody else knows their products and customers in such detail. Anyone who manages to use this information is also well positioned in the future.
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