The new retail world is convergence.

The Productivity Commission report into the Economic Structure and Performance of the Australian Retail Industry released in December is not about winners and losers; it is not about retail vs. online; nor is it about commerce vs. e-commerce; it’s about the new retail paradigm.

With more than 10 million Australians now shopping online, commerce has hit a critical inflection point; consumers are spending an average of one hundred minutes shopping online each week. They are shopping on their computers and on their mobile phones – on the bus to work, while watching TV, and while browsing in their local shopping centre.
The internet empowers consumers like never before with greater control and choice, but it’s only the savvy retailers that are embracing this consumer-driven change that will ultimately survive.

This has been reinforced with figures being released that retailers had their busiest ever period of online shopping over Christmas 2011.

Mobile phones will increasingly have applications that allow barcode scanning. Still in its infancy in Australia, these applications will allow you to scan an item in store and instantaneously, see everywhere it is available for sale online or nearby. You may be searching for a camera in your local store, the application informs you of another store selling the exact item at a discount, but you don’t want the hassle of going somewhere else. You decide to order the product on your mobile phone, and the retailer offers free shipping and they will deliver the next day. These scenarios will be increasingly common and can be achieved with current technologies that will continue to blur the line between online and offline shopping.

Australian consumers will continue to get smarter, and more demanding. They are now using their mobiles more than ever to make price comparisons, search product information and ensure they are getting the best deal possible.

Global financial firm Morgan Stanley predicts that within 4-5 years’ time, there will be more people using their mobile than the internet on their desktop to shop. According to eBay’s own research, Australia has amongst the highest smart phone penetration globally with 1 in 4 Australians regularly using their phones to shop online.

Online is not a competitor to traditional retail, it is a partner, that if fully embraced will guarantee future growth for retailers, large and small.

One of its key recommendations, the Productivity Commission recommended the establishment of a Retail Council of Australia to make recommendations on the future of the retail sector. That Council representation would certainly be strengthened with representatives from the online retail environment.

Multi-channel commerce is the biggest catalyst for growth in the retail industry today, encouraging entrepreneurship, enabling new businesses to emerge and compete with more established players, and opening up the opportunity to sell to a global customer base.

This in turn spurs long term economic growth. It also creates significant opportunity for established manufacturers; retailers and logistics providers who are prepared to evolve and meet the needs of this new modern day consumer.

To do that though, retailers need to embrace this new retail paradigm.

You can follow the eBay Government Relations team on Twitter at @ebaygr.

Note: The following is not intended to be and should not be interpreted as constituting legal advice.

Online business is quickly becoming the way to do business for both large and small business owners. Many consumers favour online shopping given that it is quick, convenient and often cheaper than a retail shopfront trek. It is no surprise then that many savvy entrepreneurs are trying to get in on the action. However, before you embark on this new online endeavour, you need to consider the legal considerations and responsibilities of running an online business.

Registration

The first thing to remember is that even though you do not have a store front, you are still operating a business.  As such, there are certain legal requirements that you will need to abide by.  In particular, you need to think about:

• the structure of your business – asset protection, taxation issues, income splitting
• registration of your business entity (if any) and business name
• obtaining an ABN and if required, registering for GST
• government regulations  regarding the products or services that you wish to sell
• whether there are any advertising restrictions on the products or services that you wish to sell.

Although these considerations may seem daunting at first, it is important that they are given due consideration. Take for instance the choice of business name. Many would consider this the most important decision in the establishment of an online business. When choosing a name, you need to make sure that it does not infringe upon or is not too similar to an existing business name.

Consumer Law Requirements

Before embarking into the world of e-commerce, it is important to remember there have been major legislative changes to the laws regulating business transactions. In particular, you should take note of the new Australian Consumer Law which seeks to regulate the large majority of consumer affairs and transactions. Provisions which may be relevant to an online business largely concern the issue of misleading and deceptive conduct.

Consider the descriptions that you will be putting up about the products you will be selling and the impact that these may have in the mind of the consumer. If you think that they may create a false assumption then it is best to re-word them and make it clear exactly what the product or service does.

If you are planning on selling products internationally, then you may also need to consider legal requirements of the countries you are proposing to deliver to.

Terms of Trade

Most online businesses do not sufficiently state the terms of their proposed sale to consumers in their contract (i.e. the terms of sale). The description of the goods is usually there, as is the price and a method of delivery… but that’s about it! What if something goes wrong – what other terms would be useful?

Consider these:

• Which legal framework applies to contractual arrangements? E.g. State, Commonwealth
• At whose risk are the goods while in transit and are they insured?
• What warranties or indemnities (if any) are required?
• Can the performance of the contract be delegated to a third party?
• Can liability be limited in the contract?
• What happens if circumstances beyond my control prevent me from fulfilling my contractual obligations?
• Do I need to protect my intellectual property in any goods sold?
• How will any disputes be resolved?

Many, if not all, of these matters can be addressed by having appropriately drafted terms of trade in your contract. If you haven’t brought all of your terms to the customer’s attention before the contract is entered into, they do not form part of the contract.

Security and Privacy Concerns

Online systems are at risk all day and all night from fraud originating from anywhere in the world. When dealing with sensitive information such as personal contact details and credit card information, it is important that you have appropriate security measures in place.  You should aim to:

• Ensure all personal details and credit card information is securely stored (or not stored).
• Take steps to seek to prevent fraud by using appropriate firewalls and software.
• Provide a safe and secure online space.

Remember that by doing these actions you are not only protecting consumers, but also protecting yourself.

Spam

Although you may be keen to let everyone know about your new online business venture, before you begin advertising your business you need to be aware of legal requirements under the Spam Act. Essentially, spam refers to unsolicited emails promoting goods or services. The Act applies to all those undertaking ‘e-marketing activities’ so if you plan on advertising your business by email or in an online medium, then it is applicable.  The key features of the Act are:

• provides a range of civil penalties for business that use spam to advertise
• prohibits the use of electronic address-harvesting software
• requires that messages contain an unsubscribe facility.

ABOUT THE AUTHOR:

Craig Pryor is a principal at Warren McKeon Dickson Lawyers in both the Corporate and Commercial Group and the Commercial Litigation Group. WMD has offices in Sydney, Wollongong, Ulladulla, Batemans Bay, Bega, Merimbula and Eden. For more information visit www.wmdlaw.com.au

It sounds like the plot to a TV show, but that is the story behind Birdsnest, which features in our latest case study video. With a successful bricks and mortar fashion store located on the main street of Cooma (population 6,500), founder and ‘Big Bird’ Jane Cay recognised that online was an open space of limitless opportunities for her business.

The team at Birdsnest have worked hard to create a great online experience for its customers. They proudly proclaim on their website that, “We want you to have just as much fun as coming into the store, in the comfort of your home”.

Today the Birdsnest website records over one million views a month, making it one of the top 50 apparel sites on Australia. As Jane describes it, “We are sitting next to… big names in the retail industry”. They were a finalist in this year’s BRW Australian Retailer of the Year Awards.

That’s pretty impressive for a small business located in a small regional town. But as Jane points out, location is not a barrier when it comes to digital business. “Google doesn’t care where you are… If you are the most relevant person or the most relevant site, they will find you.”

Jane sees running an online store as needing the same kind of commitment as a physical store: “you really have to understand who you want to be online and resource that”. That’s why the team has grown to 40 people. They have people ordering and managing the stock, photographing outfits for the website, writing detailed descriptions about every item they sell, and carefully wrapping and posting orders out to customers. And they have someone there to answer the phone when you need that extra personal help. A lot of love goes into managing their online store.

Jane didn’t have any guarantee that their online experiment would work, but having the bricks and mortar store provided a safety blanket. When they started the online store they were literally selling the stock off the floor of the physical store, so if “the online thing flopped”, they still had a way to clear any extra stock.

To learn more about how Jane gets to “live in the slow lane and work in the fast lane” you can check out the Birdsnest story on our case study page or the embedded video below.

By Natalie, DBCDE

However, the 2011 Big Australia Report recently found that savvy Australian businesses are increasingly using online technologies to deepen and personalise their relationships with clients. Why are they doing this? To better serve their customers, increase return business and build brand loyalty.

 Going digital with your business can actually provide you with more ways to get to know your customers and help them in their purchasing decisions.

Getting to know you – capturing customer data

Customer Relationship Management software (or CRM for short) can help you to better understand your customers’ habits, preferences and wishes. With CRM you can track what your customers buy and what they like and don’t like. If you find over time that certain customers prefer a certain service or product line, you can email them to let them know when you have a special offer or are getting new stock.

Chances are, you’re already doing this with loyal customers who visit your shop or use your services. CRM makes it easier to do so both on and offline.

Depending on the level of customer information you collect, you can send personalised birthday wishes (with in-store discounts) or remind your customers that it’s time for their routine service or check-up (as my dentist helpfully does for me every six months). CRM can also let you know which customers haven’t visited you in a while so you can email them with a special offer or your latest newsletter to remind them you are still open for business! (Of course, make sure you comply with anti-spam laws, because everyone hates spam, and that you comply with any other laws relating to the collection and use of personal information, such as privacy laws.)

Put simply, CRM helps you to ‘remember’ your customers – if you remember them, then they are more likely to remember you too.

Habits and interests – website user analytics

Just like watching the ways customers wander through a shop, website analytics can help you to get a better understanding of what is and isn’t working on your website. 

Frequently visited pages can give you great insight into your customers’ interests and could provide opportunities to value-add by inserting links to other complimentary products and services you think they might be interested in.

In contrast, if your customers are checking out your online specials and browsing away from the webpage after only a few seconds, your specials probably aren’t so special after all. Or you may need to improve the design of your webpage. Likewise, if your most visited page is seven clicks deep in your website you might want to move it closer to the top or insert a prominent link to it on your homepage.

By evaluating your customers browsing habits you can make it easier for them to access your products and services, making it more likely that they’ll visit you online again too.

I think I ‘like’ you – the social business

Social media provides an invaluable opportunity for business owners to directly speak with their customers, in their own home. 

Social networking sites, forums, blogs, polls and online competitions all provide ways to further deepen customer relationships. They provide opportunities for customers to actively participate and provide feedback to your business. This can help you to improve your service, build trust and develop brand loyalty with your customers.

A recent contest by socialmediaexaminer.com found that the best small business Facebook pages were consistently the ones that actively and meaningfully interacted with their ‘fans’ (i.e. their customers). That is, they responded quickly to enquires, provided relevant and useful information in their posts and were personable in their communication style.

In this sense, social media is just like talking to a customer on the phone or across the counter – respond promptly and you may just get a new customer and another sale!

Let’s go steady – digital engagement works

While the digital detractors of the world may say that online business prevents you from getting to know you customer, the tools and resources described above show that they are clearly doing it wrong. Digital business provides a wealth of opportunities to better find, understand, interact and respond to customers’ needs. The fact is that using digital business tools can help build better customer relationships, and in so doing, could help you to grow your business.

By Dylan, DBCDE

P.S. Carie Lewis from The Humane Society of the United States has created a great Prezi on ‘the do’s and don’ts of social media’. Check it out:  Why I Don’t ‘Like’ You.

Speaking at a Business Spectator webinar on how to apply best practice for social media in your business, Kate Carruthers, digital marketing consultant, emphasised the need to be strategic in your approach to social media if you want to be one of those businesses that stands out.

Getting Started

What do you want to do? Kate emphasises that this question is always the starting point when it comes to social media. Are you trying to publicise? Or respond? Or interact? And what content to you want to share? Photos? Videos? Detailed content? Newsflashes? These questions will help you decide which social media platform you should use or whether you should be using social media at all.

And it isn’t just about what you want to do. Do you know what your customers doing? What social media do they use? Do they use it to hear about sales? Or share experiences with others? Or interact with brands they like? Before delving into the new-tech world of social media you should use old-fashioned marketing and audience analysis to make sure you match your strategy with your target market.

It is important to think of your social media presence as part of an ecosystem. Think about how to coordinate your social media presence across each platform that you have a presence on. A good social media strategy should indentify how they all work together to support what you are trying to achieve and how it drives traffic to your business.

Measure your effectiveness

Just like you track your sales volume, store traffic or customer loyalty, you should be tracking the effectiveness of your social media presence. And not just how many ‘likes’ or ‘followers’ you have. For example, you can use the bit.ly service to track how many people come to your website from links on your Twitter account. Or you can see how many people retweet your Twitter messages. Kate’s tip is to decide what you want to measure as part of your initial planning, as it can be very hard to retrofit metrics.

Social media pitfalls

Kate identifies four key pitfalls that many businesses experience when it comes to social media:

People: Do your staff really know how to use social media effectively? It is important that your people have the skills to post interesting, relevant and effective content and that you set clear boundaries of what can be said in your business’ name.  

Process: Do you have a process of how you will manage your social media presence? Who can post? What do you post? What is your response time? What approval is needed? You need to set clear, documented and repeatable processes to ensure consistency in your message and your customers’ experiences.

Technology: What technology are you using? What technology do your customers use? Do the two match?

Policy: Have a clear documented policy that sets out what your staff and customers can expect and how they should expect to be treated. Be explicit and transparent about what you will and won’t do on social media.

The key message is that doing the ground work before you start is critical to a successful social media presence. Manage the expectations of your customers and make sure your staff are clear on what you expect from them. And don’t treat social media as an island. Ultimately, it should always tie into your core business plan.

Learn more about social media and how you can use it here on the Digital Business website.

Have you fallen victim to any of the four social media pitfalls? Or have you done things in your social media strategy that have proven very effective? Let us know by sharing your comments.

By Natalie, DBCDE.

The Australian Communications and Media Authority’s (ACMA) latest research report, E-commerce marketplace in Australia: online shopping, is our first look at the developing online shopping market from both a supplier and user perspective. The report reveals insightful findings and developments, and helps consumers and businesses see how e-commerce may develop over time.

Here’s a glimpse of the research findings we found the most fascinating:

How many Australians are shopping online?

Approximately 62 per cent of internet users purchased a good or service online in the six months to April 2011.

Who shops online?

Internet users aged 35-44 years were more likely to have shopped online than any other age group (73 per cent).

Those with higher incomes—$150,000 or more per annum—were also more likely to have shopped online (86 per cent).

Why do we shop online?

Convenience (67 per cent of people purchasing online) and price (47 per cent of people purchasing online) are the main reasons consumers shop online.

How do we shop online?

Online shopping is predominately conducted via computer, with mobile phone internet e-commerce largely used for banking and bill payment. In the six months to April 2011, 91 per cent of people who shop online purchased online using a credit card and/or money transfer service (eg PayPal).

What do we buy online?

Travel goods, tickets and accommodation are the most popular items purchased online, although there is some variation based on age and location of the purchaser.

Where do we shop – Australia or overseas?

The majority of online shoppers continue to buy from Australian websites (53 per cent). The proportion of online shoppers also accessing overseas websites increased from 19 per cent to 29 per cent from November 2009 to April 2011. This increase is likely due to an increase in the Australian dollar.

Supporting local industries was the leading reason why people mainly shopped on Australian websites (30 per cent).

Where do the majority of online shoppers live?

Aussies from all over the country shop online. However, Australians living in remote locations had a higher incidence of online shopping than those living anywhere else—70 per cent of internet users in remote or very remote areas had purchased a good or service online in the six months to April 2011.

What about Australian businesses?

Businesses are increasing engagement with consumers via the internet: 59 per cent of Australian small to medium enterprises had taken orders online from consumers at April 2011. In April 2011, 18 per cent of Australian small to medium businesses used social media for business purposes – an 8 percentage point increase from April 2010.

The full report is available on the ACMA’s website.

Also, please see our interactive presentation: http://engage.acma.gov.au/commsreport/

Thanks,

Joseph Di Gregorio
ACMA Manager
Communications Analysis Section
You can follow Joseph on Twitter at @joeACMA

If not, it’s a national campaign that recently sent a blue bus full of small business advisers through regional NSW. There’s also the Driving Business Online website, which offers advice and some subsidised services to help small businesses start a basic website.

With the on-the-road campaign wrapped up for 2011, we caught up with Emma Hunt, who as well as organising Driving Business Online, is the head of Paypal Australia’s small-medium business division.

According to Emma, more than 500 small-medium businesses visited the bus, looking for advice about everything from getting online to building traffic.

One of the most interesting stories Emma and her team have come across came from the founders of online business ‘Hardware2u’. It starts out as a familiar story – a misjudged Christmas shopping season in 2005 left the business with huge amounts of excess stock. Then comes an interesting twist – business founder Scott Asbey-Palmer decided to sell some of his stock on eBay, and became one of the first businesses to sell hardware on the site. Three years later he closed his bricks and mortar shop to focus on his online store.

Emma said the hope is that small businesses who visited the bus will take the advice on board and find similar success for themselves.

“Our eCommerce experts hosted 192 one-on-one consultations with businesses looking to take advantage of the online opportunity,” Emma said. “It is too soon to know how many of these businesses are now online and enjoying high trading volumes, but we will keep in touch and provide ongoing guidance as they grow their business online.”

Emma and her colleagues haven’t finalised plans for next year, but they’re still delivering advice through their website. At the moment, some of the most popular content includes articles on search engine optimisation and online marketing. 

By Nick, DBCDE

Small business lagging with web presence

While 90.1 per cent of businesses had internet access in 2009/10, only 40 per cent had a web presence such as a website. Big business (200+ employees) is well represented online, with 94 per cent boasting a web presence, but micro businesses (less than 5 employees) lagged far behind at 29.2 per cent.

Looking at individual industries, the arts and recreation services industry led the way with 64.9 per cent having some web presence. The wholesale trade sector also has a strong online representation at 57.3 per cent, while we would expect IT sector to be relatively well engaged online (58.3 per cent). In contrast, just 10.9 per cent of agricultural businesses have an online presence.

While most businesses of all sizes used their web presence to provide information about their business and offer online contact facilities, interestingly it was the micro businesses that were outdoing small and medium businesses on website features. 17.4 per cent had online payment capabilities, 6.8 per cent had facilities to track orders and 6.6 per cent had personalised pages for repeat customers.

Businesses are making orders but not taking orders online

The rate of businesses making orders online is growing faster than the rate of businesses taking orders online. Between 2007/08 and 2009/10, the total share of businesses that have made orders over the internet has increased from 42.7 per cent to 46.5 per cent. But while nearly half of Australia’s businesses are willing to make orders, much fewer are actually giving others the option to order from them over the internet. Only 24.8 per cent of businesses received orders online, up marginally from 23.7 per cent two years ago. Looking specifically at retail, 33.8 per cent took orders over the internet in 2009/10.

Nearly two thirds of online orders come in the form of an email not linked to a website, which is most common amongst small businesses. However, the use of more sophisticated methods is increasing slowly. 16.8 per cent had an order form on their website while 13.6 per cent had an online shopping cart.

Income from online sales growing

Businesses who do receive orders online are seeing it account for a larger share of their total income. In 2007/08, 15.0 per cent of these businesses said more than half of their income came from online orders. Just two years later and that figure has risen to 21.9 per cent. And the biggest gains are occurring in smaller businesses. The share of micro businesses with at least half of their income coming from online transactions rose from 19.0 per cent to 23.3 per cent, while for businesses with 5-19 employees it was up from 10.3 per cent to 21.4 per cent.

Overall, Australia businesses earned $143 billion in income from orders received online during 2009/10. That is a massive increase on the $81 billion reported in 2007/08.

Most businesses have not experienced security problems

The survey reveals that 11.7 per cent of businesses connected to the internet have experienced some sort of internet security incident. The impacts of these breaches are most likely to involve service downtime (61.8 per cent) or corruption of hardware or software (53.0 per cent). Big businesses were more likely to experience security incidents (19.4 per cent), however micro businesses were more likely to experience loss of income as a result (15.3 per cent).

So what does this all mean?

This snapshot of the business use of IT shows that most businesses are either reluctant to get online or are not realising the potential benefits it can bring them. There has been only a relatively minor increase in the percentage of businesses that have an online presence or are taking orders online, yet the level of spending occurring over the internet is growing at record pace.

If you would like more information about how you can get ahead of the competition by getting your business online, check out the following links:

-          How to establish an online presence
-          Getting started with ecommerce
-          Online shopping carts

-          Choosing your payment methods

-          Protecting your business’ data online

Is your business one of the 40 per cent with an online presence? Do you have any tips to share with other businesses about how to get online from your experiences?

By Natalie, DBCDE

So you have a website. It looks nice, and so it should, you paid good money for it. But the sales are just not happening and the leads are still coming from your traditional media channels. You got some guy in to do some Search Engine Optimisation (SEO) for you and you are on Google page one, or at least you were in the screenshots they sent you as proof of their awesome work. You get the Google analytics report sent to you as a PDF every month by the guy that built your website but you are not really sure what all that stuff means so it just clogs up your inbox. Starting to sound familiar?

Outsourcing to a web developer makes sense for many business owners but few understand that at the bottom end of the market, a web developer is likely to only do the bare minimum when building a site and may neglect some of the keys to website success. Let’s face it; you get what you pay for and if you don’t have a decent website brief that spells out exactly what you want then you also get what you ask for?

If your website does look good and all it needs is some tweaking to improve performance then these tips should help to improve your website performance pretty quickly.

Take charge of your Analytics

Do you track how many people walk in your door? How many products you sell? How many clients you meet with? Probably yes. Do you trust this information to a third party and ask them to give you a report on it monthly? Probably no.

I really do not understand why any business would get a monthly email of their site’s stats as their sole reporting and information tool, but many do. This is a core business information set that is vital for a business owner to take charge of.

In my experience I’ve found Google Analytics a good solution, but there are arguments to use other service providers. You can get your web developer to install the code on your site but it really is very simple if you have access to the back end and once the code is installed, it is usually only a matter of hours before you have access to the wealth of knowledge captured there. It may seem overwhelming at first, but learning the basics about your website analytics can be easy if you take it one step at a time.

Run a basic website diagnostic

Quality analytics are essential, but for a snapshot of a website I like to run a basic website diagnostic. If you have the inside tip on your own website then you will be able to make some informed decisions about what easy things you can do yourself. I use WMTIPS Site Information tool but there are a plethora of others out there. Basically, this service gives you a nice easy snapshot of where your website is at with regards to Google PageRank, keywords, inbound links (back links) and other useful information.

Run a website diagnostic on some competitor sites

Use the same tool you used on your own site and run it on some sites you think are doing it well that are in a similar market to or are more successful than your business. Compare your report to theirs. How many inbound links do they have? What are the linking sites? What keywords are your competitors using?

Act on the findings

Once you have some information about your site’s performance you can start acting on some of the findings straight away. Improving your inbound links count is something that you can do by asking your professional and personal networks to link to your site, adding your website to your social media profiles, getting onto relevant blogs and posting engaging comments with links back to your own site, adding a Google Places page and a host of other ways.

By adding inbound links steadily through this do-it-yourself method you should see positive results. It is tempting to outsource this and many people have seen great results using external SEO providers. However, I have also seen some real problems resulting from SEO providers inserting comments and back links on completely unrelated and sometimes downright dodgy sites – so be very careful to choose a reputable SEO firm if you go down that path.

Like all things internet, changes are inevitable. Keep yourself up to date and informed about your own and your competitors sites and adapt your site to new trends and innovations accordingly.

The Salisbury Business Enterprise Centre (BEC) provides eBusiness support to businesses via eBusiness Workshops, eBusiness Mentoring and networking opportunities. Please see our events page for the latest workshops and opportunities or call 08 8260 8205 for enquiries.

This is a guest post by Rhys Moult, eBusiness Strategic Advisor, City of Salisbury and Sailsbury BEC.

Nick: How can businesses work out the right balance of websites, location-based promotion (eg Google Maps, Foursquare, Facebook Places), online marketplaces (eg Etsy, eBay, Amazon) and social media for their business?

Mark: Based on the maturity of the online retail industry here in Australia, retailers should consider a fine balance between what will bring in the most revenue and brand awareness versus experimenting with unknown or new channels. All retailers should focus on first getting the basics right.


Having a transactional and easy-to-navigate website is a good start. Retailers can then not only drive foot traffic to their brick-and-mortar store via services like Google Maps and Foursquare, but also sell their goods and services online.

In addition, creating an online store on a low barrier to entry marketplace such as eBay would also be beneficial. eBay Australia drives millions of product searches monthly and both large and small marketplaces can benefit from the traffic it provides.

Balancing these easy steps with a new channel, such as social media, would be valuable. For example, retailers should experiment with Facebook pages and establishing a Twitter account, which are free and easy to manage. Small businesses in the services and hospitality industry and smaller retailers can gain good traction from these types of social commerce activities. As online retail continues to mature in Australia, the balance can shift toward a greater focus on these new channels.

Nick: What kinds of businesses benefit most from which kinds of online presence?

Mark: On numerous occasions we have seen that even the largest retailers, with the most recognisable brands, must focus hard on selling and marketing products which can be very costly. Many of these larger retailers also find it hard to stay nimble and are unable to make quick decisions affecting their online store.

Historically, eBay’s business model, with the auction-style listings, was less attractive to big brands that didn’t have the flexibility to compete in this environment. However, in an effort to appeal to larger retailers, eBay has made crucial policy changes by lowering listing fees as well as moving toward a fixed-price marketplace. These changes should encourage large retailers to bring their full catalog to eBay to tap into the potential of eBay’s 90 million active shoppers.

Smaller retailers, on the other hand, can focus on just selling their niche or specialised products and not be burdened by some of the red-tape that larger online retailers must go through. Small to medium-size retailers are often more flexible and can change their online strategy quickly. Since the Internet has such a low barrier of entry, smaller businesses can compete head-to-head with the larger companies overnight, especially through a site like eBay that already has the infrastructure and audience in place.

Nick: How can businesses manage inventory when they have the same items available for sale both online and in their bricks and mortar store?

Mark: There are many solutions available today which can help manage the issue of inventory being simultaneously sold on multiple online channels and a traditional bricks and mortar store.

One popular option is to use a company like Netsuite.com.au or MYOB.com.au which help to solve this challenge. Although many larger companies will create their own back-end inventory management systems this can be cost inhibitive and consume valuable IT resources.

ChannelAdvisor recommends that no matter what system a retailer uses, inventory updates provided should be in real-time. There is nothing worse than overselling a product that has been promised to someone and receiving negative reviews or feedback online. Systems like ChannelAdvisor can be used to facilitate online sales to backend programs like MYOB.com.au, Netsuite.com.au or bespoke system using APIs (Application Programming Interface) with minimal IT effort.

Nick: What do you see as the growth area for online business over the next few years? What’s the next big thing?

Mark: Facebook commerce has been growing since the launch of brand pages in 2007, but this is now about to explode. With Facebook as the primary driver, analysts have estimated social commerce will be worth $30 billion by 2015 – six times as much as 2011.

The stats speak for themselves. Facebook has more than 750 million users worldwide, with more than 250 million active mobile users. Of these users, 56 percent have clicked through to a retailer’s website because of a friend’s Facebook post. Furthermore, 67 percent of shoppers spend more online after receiving recommendations from their online friends. This is key for retailers because Facebook users are interacting with friends all over the world, which, when it comes to online shopping, can be incredibly valuable for retailers.

Consumers are much more likely to buy something if a Facebook friend has recommended it, so while ads and sponsored stories are on offer, the most important tool for online retailers is the ‘Like’ button. It’s already hosted on more than 2.5 million websites globally and has quickly become a vital tool for building brand awareness online.

Social commerce might still be a new way of reaching customers, and one where the best practices are still being developed, but retailers have a golden opportunity to get ahead of the competition by getting in now.

by Nick, DBCDE

For more information about the topics in this blog, visit:

Planning to go online

Social media

Getting started with social media: practical tips (blog post)

Social shopping: what it is and how you can use it (blog post)