Small to mid-sized Retailers realise they need to have a multi-channel business model to be successful today, along with the importance of being online. However implementing a strategy profitably is easier than what is often reported.
The Australian Online Retail market is growing at over 25% year on year, and worth more than $12B. This year, thousands of consumers will do their Christmas shopping online, and they’ll be starting early, from October, in order to ensure they get their deliveries without fuss before Christmas day.
However despite this massive shift in consumer behaviour, and the need for retailers to be online, the operational costs for a retailer to achieve success online can be very high.
If a retailer’s POS System is not deeply integrated with their ecommerce platform, to the point where inventory, sales orders and customer data is automated, then the operational costs of managing a web business may exceed the margins made on the sale of products.
The cost of building a great looking website is only the tip of the iceberg, in terms of the total web operating costs over say a 12 month period. The largest proportion of your actual costs of running a web business are the ongoing operational costs (not the initial website development costs).
All the manual work and labour that needs to be applied to running a smooth online business must be minimalized, in order to be profitable.
Here are some of the key success factors for a retailer to be profitable online:
This may all sound simply, however something to be particularity aware of, is retail POS software companies that only offer their retail clients and API to their software, citing how easy it is to connect with other 3rd party platforms.
If the retail software vendor only offers an API service, and doesn’t actually provide a complete turn-key multi-channel solution – then you may be in for a tougher ride than expected. Most POS system API’s are actually not up scratch when it comes to the integration requirements, and furthermore, you have to find your own web developers to do the technical integration. This technical integration can be extremely risky, and very expensive.
Aaron Blackman is the CEO, Retail Express.
Retail Express delivers market leading cloud based Retail Operating Software, designed specifically to reduce costs, improve efficiency, and grow sales.
Topics Covered: All
Date of Post: 2013-09-23