The Real Reason Industry E-commerce Firms are Growing Faster Than You
By now you have heard the fact that overall industry firms grew at 1 percent, while industry online firms grew at 33 percent. According to PPAI research, “The proportion of online sales compared to total sales in the industry increased by 4 percentage points from 13.6 percent in 2013 to 17.9 percent in 2014.” Wait, you have valuable relationships and great service, yet overall online firms are growing faster than traditional firms? Why is that?
Online research is the primary reason online firms are growing so fast. Everyone in this industry recognizes customers are now researching online before purchasing. Unfortunately for traditional firms, much of this research is now turning to online purchasing as well. Most traditional firms are not properly prepared to handle the full transaction online.
When your customer orders from your website, is the price final? If not, you’ve already disappointed your buyer. Consider what you would do if you purchased a car online and then the final price turned out to be $500 more because of “extra hidden charges.” Yet, that is what happens nearly every time a customer visits your site to place an order.
However, true e-commerce is not enough.
Online marketing is the real secret to the significant growth. Top firms are spending millions of dollars every year to acquire your customer when they are doing research. These firms buy keywords at prices you can’t afford and spend countless hours optimizing their search engine optimization strategies. Nationwide online marketing is not something any traditional sales person can afford given the size of the investments being made by the largest firms. It’s not all gloom and doom however; hang with me a few more paragraphs.
First, a little more warning since once your customer visits an online promotional site, your customer sees repeat messages from your competitor across the web, from YouTube to CNN. If your customer provides an email address, online firms send emails and stay in regular contact with targeted messaging. Even better, the best online firms are in touch via samples, postal mail and even phone calls. Online companies aren’t letting you own the personal touch; they are investing heavily in personal touch beyond the site.
So how do you compete?
- Your talent
a. You’ve had this for years. Keep using it. It’s the true differentiating factor. It used to be enough but with the growth in online research, you have to do more.
- A true e-commerce website
a. Your checkout price should be the true price.
b. Your product selection should be vetted so you don’t overwhelm the customer.
c. Your site must be easy to use.
- An online marketing strategy
a. Target local.
b. Use social media.
c. Reinforce your personal brand.
d. Get personal and local help, and be prepared to spend more money than you really want. Online advertising requires serious investment for significant results.
Your talent and your contacts will continue to be relevant, and can help you grow as fast as online companies despite your much smaller marketing budget. Don’t expect to compete with their online marketing budget directly, but don’t let them easily take your customers either. Provide your clients a true online commerce experience and back it up with your great service. Invest in targeted, local, online advertising using guerrilla marketing tactics and you can grow for years to come.
However, you shouldn’t waste money on your online marketing if you don’t have a true e-commerce website. Likewise, a fancy new website is not going to magically grow your sales. It’s a combination of your talent, your site and your marketing strategy. Some sales people and firms continue to grow with traditional shopping (not full e-commerce) sites and limited online marketing strategies, but growth via this approach is slowing down dramatically.
As you begin planning for 2016, start thinking about your e-commerce strategy, and recognize both a true e-commerce platform and proper online marketing are vital to your long-term growth.