As consumers get increasingly comfortable with shopping online for practically everything they want, small business owners, and particularly small retailers, are faced with a decision: Join the e-commerce movement, with all of the attendant expenses that will require, or concentrate on their brick-and-mortar efforts.
The Internet offers small businesses a great opportunity to compete with companies of any size. Whether that’s the right choice for you, though, depends on your specific business model and your long-term goals. If you’re wondering whether to devote the time, money, and other resources needed to make e-commerce a viable tool for your business, here are a few pros and cons you should consider.
Pro: Your potential audience is much bigger. With a retail website, you can reach customers down the street, across the state, around the country, and overseas. If your product or service has legs, you can significantly increase your customer base — and your sales.
Con: So is your competition. You’re not just trying to outperform a local or regional rival. Even if you’re in a niche market, you could be vying for customers with the big-box retailers, which have a lot more money to spend — and can more easily absorb losses on certain items in order to gain customers.
Pro: You’re always open for business. Your customers can place orders not just during business hours, but around the clock. Even if they’re not buying from you, your site visitors can still learn about your products and services, location, contact information and more.
Con: You’re always open for business. People can already shop around the clock, and mobile devices allow them to do so almost anywhere. As a result, a lot of online consumers now expect near-instant service — or at least quicker deliveries. You need to consistently fulfill orders and/or answer inquiries on a timely basis, or you’ll risk losing customers, especially if you’re competing with brand-name retailers.
Pro: You can gather copious amounts of useful data. The era of Big Data lets retailers tailor their messages, offers, and website experiences to match individual consumers’ likes, dislikes, shopping habits, and so much more. (Indeed, online shoppers now expect customized treatment.) Your website will offer you access to information about your specific customers and thereby help you build loyalty.
Con: You have to sift through copious amounts of customer data. Fortunately, there are companies and software that can (for a fee) help small businesses test, gather, and analyze data on their customers’ behaviors. While you’ll still have to spend time interpreting and implementing the lessons learned, analysis and optimization are standard, necessary parts of continual business improvement.
Pro: E-commerce is the future — and, increasingly, the present. Online shoppers will soon be able to buy virtually everything under the sun (if they can’t already). Venturing into e-commerce now will give you a jump on — and/or help you level the playing field with — your competition.
Con: Your business doesn’t benefit from an online presence. This may very well be true. If you own and operate a food truck, for instance, a website could help you build awareness and expand your operation. If you only have one truck, though, and you already have a profitable route and/or location, you may not need that boost.
Tom Caporaso is the CEO of Clarus Commerce, a leader in e-commerce and subscription commerce solutions. Among its various properties, Clarus Commerce powers FreeShipping.com, the pioneer of the pre-paid shipping and cashback movement. ClarusCommerce also customizes and manages programs, such as Return Saver, which it co-developed with FedEx, and 2-Day Shipping by MasterCard, for clients across a wide range of industries.