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Are webshops following retail chains

Are shopping streets of retail chains the forerunner of what is about to happen to webshops?

few examples of major struggling companies, Office Depot (US), SEARS (US), BlockBuster (US), Vroom & Dreesman (NL), Blokker (NL), La Senza (UK) Unipart Automotive (UK). And this list can go on, and you can easily find examples in every country.

You should ask yourselves if what is happening with retail chains is that the forerunner of what could also happen in the online commerce street looking at both B2C and B2B.

an empty shopping street

In shopping streets, a lot of stores are struggling to find the right engagement to attract customers. I am convinced that if a customer is getting a better feeling in the store he is also willing to pay the price in the store. We need to remember that not everyone is always just shopping for the lowest price. The majority is still looking for the best price, which is price combined with quality and experience. However if he does not get that feeling of engagement he could easily turn in to hunter for the cheapest price. And that is still online, where you find the lowest price.

And a search for the cheapest product always starts with Google. Unfortunately most people tend to forget that time looking for the cheapest also costs money.

It is surprising to see so many webshops look so similar. It seems that investing in an online shop is not the same as in developing a new building or shop. The architect, or UX designer for online, is traded in for a standard template or reference store. In my believe, that will lead to a similar situation as you see in the shopping streets, stores will be struggling with their identity and stores will end up only competing on price, while their business model is not equipped for that. And when you business model was not set up for that at a certain point you will drain all your business reserves, leading to no funds to invest, and could lead to “end-of-business”.

In order to stay attractive online and not get sucked into price competition, you need to stand out in your market. You need to be better than and different from your competitor. For that you need to make sure that your webshop is flexible enough to adapt to your changing customer demands.

A three layered approach to longterm customer satisfaction.

Your webshop should actually be regarded as a three layered approach.

Layer one is the layer of leadgen, being attractive, showing experience, it is like your shopping window. It is pre-sales, get to know your prospect and act accordingly. In a regular store it is the interior design of the store and the store sales who, is doing the presales. Make sure that this layer is an online engagement or experience platform, which suits your online marketing strategy. Remember that your online marketing needs change over time, and it tends to grow. Most e-commerce platforms have some level of online engagement, but miss the capabilities to really engage with your customer, or build online campaigns or do personalization based on visiting your site.

Layer two is your e-commerce platform, which presents the information to do the actual transaction. It should not only present the right price, calculate the coupon, discount or freight in a quick and correct manner. But it should also be able to provide shopping lists, re-ordering, order online & pick up in store. Especially e-commerce can become very complex when you consider B2B, which characterized by multiple users per customer, customer specific product catalogues, prices, discounts, delivery methods, one order being split up in multiple delivery addresses, parts lists as bill of material, and many many more. Besides the complexity of B2B e-commerce, B2B also needs to embrace a proper engagement platform as the business customer is used to online experience as a consumer too. So layer 1 is also important for B2B, maybe even more, as B2B is even more used to the personal touch of sales.

Layer three in my model is integration with ERP. E-commerce is not a silo anymore in a business; it is an integral and mature line of business. It enables companies to quickly enter different regions without having to set up foreign offices. To benefit from e-commerce, and being able to have your e-commerce platform show for instance the right stock or prices makes an integral relation with ERP necessary. A lot of e-commerce data is managed in an ERP and you benefit best of this when ERP data is instantly presented in your webshop. You need to step away from bulk updating your webshop. As you are now in a 24/7 business you will not be able to find the moment to close your webshop to do a massive product or inventory update.

Just as I was writing this blog, the news on about the closing of reached me. It is one the first e-commerce stores that will need to rediscover themselves.

In order to achieve the best out of your online commerce, I always advice our customers, choose a online engagement platform that fits your online strategy, use an ecommerce platform like Evision E-Commerce that does not overlap with your engagement. And make sure your e-commerce platform has a strong integration with ERP.

If you do not want to be pushed in a price war with your competitor you need to not only stand out with your product portfolio but more you need to look at your branding and engagement. I think everybody who went to business school heard the story on Coca Cola. They do not sell a drink, but they sell a happiness.

picture credits go to Alamy (Daily Mail Online UK) 

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