To ecom – but at what cost?
To ecom or not to ecom. A modern retail version of Hamlet. To ecom – but at what cost?
Ripped from the headlines:
“Walmart’s e-commerce unit is projected to lose $1 billion this year on as much as $22 billion in revenue as the retail giant races to catch up with Amazon online, according to a report released Friday by Recode that cited anonymous sources”.
“Wayfair’s revenue rose 39% to $1.94 billion in the first quarter of the year, compared with the $1.92 billion expected by analysts, according to Refinitiv. Wayfair’s loss widened to $200.4 million, or $2.20 a share, from $107.8 million, or $1.22 a share, during the same period a year earlier. On a pro forma basis, it lost $1.62 a share, but that was steeper than the $1.60 a share loss analysts were expecting”.
Ask most traditional retailers, and they will quickly respond we have to do more (or “do”) eCommerce. “We have to sell online”. “We have to …. “. However, the best struggle with this; how is the local bricks and mortar retailer ever going to compete? I mean seriously with Wayfair and Walmart and anyone on Amazon dropping the same lamps and the same tables in the same zip codes – why would any retailer think they have a chance? Guess what. They do – but they must be smart! And they must not waver.
You have a beautiful backyard. Play in it.
Most retailers underestimate the value of local eCommerce. The same zip codes that you currently serve – that is your local “ecom airspace”. Your backyard. If 7% of home furnishings is done online – simple logic would say that a proportionate share of that is doled out to your local market(s). What if you took all your efforts and attention and focused on maximizing that. Don’t fall victim to revenue grandeur. Focus local. Think about it one step further. Profitability of your business. I bet you have capacity. I bet you have operational burden that isn’t fully “burdened”. Those delivery trucks need to deliver. That warehouse staff needs to “warehouse”. A revenue dollar is not created equal.
Local is proximity. You have that customer within reach. Amazon Prime is exciting – but guess what; you have your own version. I was in a furniture store a week ago and they were scheduling delivery a week out for a stocked product. “The team is busy”. “We only go to that area on Friday’s”. Are you kidding me. “How about we meet you at your place” should have been the answer. Proximity is your victory. DO NOT GIVE IT UP based on legacy practices. Re-think everything local.
“In-Stock on display” should be shouted from the rooftop. Think about your own personal online “consumer behavior”. You want to know if it’s in-stock. Why wouldn’t you? Now – why would you expect your retail business to be any different? Consumers look at your retail business just like you look at others. Everything you have “in-stock” and “on display” needs to be current and promoted. Does your website meet these 2 must-haves? Do all your marketing activities align with this practice?
Price it! I still cringe when I see retail websites without prices. “Well I don’t sell online”. Well so what. Seriously. Do you hope to sell in store? Not to posture to aggressively on this one – but this was an argument years ago. It’s settled, and consumers settled it for you. Trust me. You are researched and evaluated, and if you are lucky one of the 1.4 retail stores a consumer will visit for that product. Do you think you will be that one if they have no clue what you are charging for it? Would you?
Local eCommerce is the best offense when it comes to a traditional retailers’ online efforts. Once that is mastered – go big! But master close to home first.