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Selling
e-commerce is a part of everyday life and it is growing fast. Everyone's doing it and they are doing it on a surprisingly large scale. Don't believe it? Here are some numbers (from IMRG and others):
- £42bn will be spent online by UK shoppers in 2007
- The average UK online shopper will spend £1,600 in 2007
- Internet shopping accounts for 10% of all retail sales in the UK
- Tesco recently announced that its online sales during the year reached £1.226bn
- Ocado sales were up 60% in the final week of 2006 before Christmas
- John Lewis's Department store online sales have grown by more than 50% in the last year
The opportunity
Retailers - The obvious opportunity for e-commerce is for retailers. Previously limited by the geographic location of their outlets, retailers are now unconstrained in terms of reach. All retailers should be viewing the web as an opportunity to trade on a national basis; some internationally.
Business to business - this is an even bigger opportunity. The stats for online business transactions dwarf those for retail. The opportunity is again to reach new markets, but it is also to develop better and more profitable relationships with your key clients.
Direct channel - There is also the potential for non-retail businesses to establish a direct channel to market. This direct channel offers margins that most manufacturers (and other businesses down the food chain) can only dream of. Imagine, the margins that wholesalers and retailers add to your products can all be yours!
The threat
Of course, every opportunity has a corresponding threat. If your customers are taking their business online, you have to be there if you are going to keep them. Foreign competitors with a lower cost base can effectively market to "your" target market. Your suppliers can sell direct online. You need to be there too to compete.
The cost
The cost of setting up an online shop (or e-commerce solution) is not high. Certainly compared with setting up a shop, it is very low. The starting price for an effective solution is £3,000 (any less than that and it's likely to be ineffective - see blog). Of course your website is not the only thing that you need to set up, but most businesses can leverage existing staff and resources to get a basic fulfilment solution off the ground.
If you'd like a meeting to talk about how your business can sell effectively online, please call 0845 838 2328 or email info@barnesgraham.com.
