At the end of March 2020, the world of retail was struggling in ways it has never struggled before.
Stores and restaurants everywhere closed their physical locations. In the face of a virus about which we all knew very little, people were staying inside their homes, afraid for their lives and the lives of their potentially vulnerable family members and friends. If you were going to buy anything, it was toilet paper, groceries, and hand sanitizer–and if you hadn’t previously embraced online shopping, now was the time to start. Early in the coronavirus crisis, it became clear that businesses that already offered options such as online ordering and shipping/delivery and curbside pickup stood to weather this storm far better than those who did not.
During this time, retailers learned a lot about their business. For some, their earlier investments in e-commerce allowed them to shift from in-person sales to online sales with limited disruption. Others lost sales to major online retailers like Amazon or their competitors that made online shopping easy, while still others continued to grow sales with limited or no online presence.
Regardless of the effect of the pandemic on their business, each likely shared the same concerns. Has retail changed forever? What will shopping look like in the years to come? And what part will e-commerce play in the future of my business?
Do we need to ramp up our business’s online channels? And if so, how much?
For the past decade, the retail industry had touted the need for businesses to be “omnichannel," which refers to a strategy that seeks to reach consumers through multiple, seamless channels. Rather than think of a shopper as a “online” shopper or “bricks-and-mortar” shopper, omnichannel seeks to build relationships with customers and foster sales everywhere – in the store, events, through the company website, social media, email, etc.
Clearly omnichannel is a bigger topic than can be adequately addressed in one blog. So, for simplicity sake, we’ll use online or ecommerce as an umbrella term for the omnichannel activities that happen outside the bricks-and-mortar store environment.
Should you prioritize e-commerce? Here are questions that should help.
The question then, isn’t whether your business should have an ecommerce or omni-channel strategy, but rather where to prioritize it amongst all the other activities and needs that require your time and money. Following are some questions that might help you answer that question.
- Are you losing business to competitors due to their superior e-commerce solutions (e.g. grocery stores with order online for curbside pickup taking business from those without it)?
- Do customers shop you for your products or is the experience a large part of your offering (for example, it would be hard for Hard Rock Café or Top Golf to go heavily e-commerce, so it’s more important for their online presence to drive business to their physical locations)?
- Does your product serve a niche that will want or require specialized help? Landscaping stores, plumbing parts, health care supplies, etc. typically have specialists working in the stores that help shoppers make decisions. The personal touch can be difficult to replicate online.
- What is your price point? Businesses with a high price point and variable pricing less likely to lose business to other online retailers (luxury jewelers, auto dealers) – typically the higher the price tag the more hesitant one would be to buy without a physical connection.
- Does your customer purchase the same items repeatedly or on a set schedule? If your inventory changes often or your visitors’ shopping habits change frequently, e-commerce can be more difficult to implement effectively.
- Can your business effectively manage an omnichannel business? One needs to approach e-commerce cautiously if the costs of running an effective e-commerce website (in time or money) negatively affects the bricks and mortar business or pushes the chain into the red.
Not all businesses moved totally online.
In the height of COVID-19, some businesses saw a dramatic shift in how their customers shop. If you’re a retailer, it’s possible your customers totally stopped spending discretionary dollars. The purse manufacturer that started making masks instead might have been able to recoup some lost revenue. Other businesses might have been forced to go online/remote if they already had the infrastructure in place, like the restaurant that had an online and phone ordering system set up and was unable to open its doors for months.
And just because you're online does not mean your customers will follow.
Yet, just because you offer services or goods online does not mean that your customers will follow you there. The grocery store chain might see customers moving to online ordering and curbside pickup in areas where restrictions were highest. But its locations in areas that didn’t lock down as much—and the risk tolerance was higher—might not have seen much increase in online business at all. Why? Because the vast majority of the customers they serve still would rather shop in person (and currently feel comfortable doing so).
Does the cost outweigh the benefit or vice versa?
You might be faced with a stark reality right now: your business must adopt e-commerce to survive. Or, maybe your situation isn’t that dire but you want to know if adopting some of the services and offerings that appeal to customers who are sticking to social distancing for the foreseeable future will help you retain customers and grow your business.
That analysis is vital, because while many companies are reacting on the fly these days, it’s worth running forecasting models to get some sense of what adding online channels will do to your bottom line. The cost of a website and additional labor to man your online ordering program, not to mention the logistics of getting it all set up to run efficiently, might not be feasible, but you won’t know for sure by guessing. Let SiteSeer help you build a predictive model. >>
Someone is making money—why not you?
Lastly, a big consideration for your business is this: could you capture revenue if you made some adjustments to how you do business? And if so, is it enough revenue to be worth the effort?
Certainly, some businesses are winning right now. Some are overwhelmed by the prospect of surviving coronavirus and opting to close. But unless you’re a grocery chain or an essential business that has managed to thrive during this unprecedented time, you can’t do nothing and expect your business to succeed.
We get it: planning for the future is difficult when everything changes constantly, but you must try. If you need help, call the SiteSeer team. Our tools will help you plan markets using data and facts, not guesswork and speculation. And if you need support from site selection experts, our professional services team can help you analyze your customers, optimize markets, and build forecasting models.
Take a demo of SiteSeer to learn what our powerful site selection platform can do for your business.