How to Take Your Brick-and-Mortar Retail Store Online

Storefront_John_Salvino_CC_BY_2.0.jpgConsumer behavior is changing. In the past, a local Walmart, Target, or brick-and-mortar store was the go-to destination for buying. Today, the Internet provides customers with a comprehensive and relatively cheap assortment of goods. It’s important for retailers to embrace this change. You can not only survive this retail landscape shift, but also thrive from it. Let’s discuss the challenges you will face as you start selling online and the step-by-step process to succeed at eCommerce.

THE IMPORTANCE OF SELLING ONLINE

Although the current state of commerce shows 90% of sales are still happening in brick-and-mortar stores with only about 10% coming from online purchases, the more important stat to examine is where the growth is taking place. Target said in their Q4 2015 earnings call that eCommerce makes up only 5% of their total sales, but it accounted for two thirds of their increase in comparable sales.

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This is the kind of growth that small, mid-sized, and mid-market brick-and-mortar businesses can’t ignore.

CHALLENGES

When expanding into new channels and beginning to sell online, you are bound to face a few roadblocks. The three most difficult challenges you will face are:

1. Tracking Inventory Levels Across Multiple Channels

When you’re just managing your brick-and-mortar store, it may have been easy to track inventory. You could have gotten by with simple spreadsheets. A confusing aspect of selling on multiple channels is tracking how much inventory to have onhand across in-store and various online channels. How can you forecast your purchase orders? How much should you keep stocked at your brick-and-mortar store and how many products should you keep at a third-party logistics (3PL) shipping company?

2. Understanding the Profitability of Products Selling on Multiple Channels

The cost structure between brick-and-mortar, an online store, and different channels for products will be different. You will need to adjust the price to account for the different costs. Selling the same product at your brick-and-mortar store will have a different profitability profile than it will selling on Amazon or your hosted eCommerce store.

3. Implementing the Fulfillment Process of Online Channels

So now you have your products listed online and you are receiving orders. Does this mean you have to hire a warehouse manager to ship all of these orders? No. You’re competency lies in product sourcing and merchandising. Do not add additional payroll expenses for non-value added activities. This challenge can be overcome by utilizing Amazon’s FBA service, as I will discuss in the process of how to implement an online selling strategy.

PROCESS

We have established the importance of selling online as well as the challenges you will face, but what is the step-by-step process to overcome all these multichannel selling challenges, and grow your online business without letting your brick-and-mortar business suffer? Follow this 7-step process:


1. Build a Catalog Database of Products

Having a catalog that includes all your inventory with vital information is crucial for listing your products. Having all the information in one excel or Google Sheets will expedite the process for listing your products.  The information you should track are: UPC code, title of product, category, product cost, and a link to the folder of all the images.

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2. Take Professional Photographs

Having a brick-and-mortar store, you may not have a need for images. When it comes to eCommerce, high quality photographs are what your customers see and can be a deciding factor of what they are going to buy. Imagine a customer walking through your store and can only read text without seeing the product. They are not likely to make any purchases. I recommend 7 images of different angles, lifestyle shots, and of the retail package if you have it.

3. List Products on Amazon

Listing products on Amazon should be your first step in selling online. Forty-four percent of people begin their online purchasing directly in Amazon.com. Being on Amazon immediately gives you access to hundreds of thousands of customers that transcends geographical location. You will be a third-party seller on Amazon which means that you are still the retailer, but Amazon gets a percentage of the sales for bringing customers to their site. Amazon also requires the most extensive amount of product information, so by tackling this channel first, it will make the other channels that much easier.

4. Send a Portion of Inventory to Amazon FBA Warehouses

To solve the problem of managing shipments once you start seeing online sales, the best strategy is to utilize Amazon’s FBA program. FBA (Fulfillment by Amazon) is a service that allows you as a retailer to store inventory at Amazon’s fulfillment centers across the country. When orders come in, Amazon associates will pick, pack, and ship your product to customers. Amazon FBA allows your product to become “Prime” which is an attractive offer from the eyes of the customer. Of the 54 million Amazon Prime customers, the average customer spends $1,500 annually on the site. The moral of the story is you would be foolish not to use Amazon FBA because it solves the challenge of implementing a new fulfillment process and you will see an increase in sales for using the program.

5. Integrate an Inventory Management System

Even at this point with only two channels (your brick-and-mortar store and Amazon), you run into the challenge of keeping track of your inventory. Luckily, there are cloud-based inventory management software products that track your inventory levels for your retail store, Amazon, and other marketplaces so that you do not sell out of your product and are then unable to fulfill an order that comes through another channel. I recommend Stitch Labs. Stitch Labs also solves another problem of tracking the profitability of products sold on other channels.

6. Create a Hosted Store

Your next channel to start selling through should be a hosted online store. I recommend Shopify. A Shopify store is equivalent to your storefront on the Internet. You can have your own domain name of your store, share your store’s story, and expand your brand. You should also start creating an email list of your customers to begin email marketing campaigns. Through this channel, you’ll own the most data about your customers and are less dependent on another channel - for example, Amazon - if they decide to raise fees or implement new policies.

7. List Products on Multiple Marketplaces

Amazon and Shopify are set up, the next step is to start expanding to the other channels that make sense for your business. The idea is to be where your customers shop and to have the most eyes on your products. Other channels, along with their customer profile include:

  • eBay
  • Etsy
  • Rakutten
  • Jet.com

CONCLUSION

As a retail store owner, you need to start selling online in order to remain competitive in the future. Customers have changing behavior in how they shop and you, as the business owner, need to keep up with these evolving trends. You can follow this process and do the legwork yourself, but if you find yourself too busy managing your own retail store to expand to selling online, reach out to amzhelp.com if you want to hire the experts for implementing this strategy.

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