How e-commerce could be a game-changer for retailers

In Singapore, many established retail brands have felt the sting of rising costs and falling profits.

Labor costs have risen by as much as 30 percent in the last two to three years, while the rising cost of Singapore’s retail space compared to its Southeast Asian neighbors means brands opening new stores here have to constantly search for new and innovative ways to attract the modern consumer who is even more discerning and selective than ever before.

In the ongoing struggle against rising costs, e-commerce could be a game-changer for brick-and-mortar businesses searching for a solution that offers sustainable growth and access to a wider audience.

With Singapore’s e-commerce industry projected to be worth S$4.4 billion by 2015 and Asia expected to account for 39.7 percent of B2C e-commerce sales worldwide by 2016, more businesses are starting to realise that that online shopping is not a passing fad.

Tips for planning your move to e-commerce
Having an e-commerce strategy can help you stay on track as you start your business online.

The four key elements you’ll need to consider are a flexible business plan to help your business stay on track and meet your targets; understanding your customers’ needs, engagement preferences, and information consumption habits; customer service that differentiates the brand from its competitors; and fast and secure logistics and payment services to create satisfied, repeat customers.

Aside from developing an e-commerce strategy, you’ll also need to consider other issues, such as how to use marketing and public relations to drive traffic to your store.

Another important consideration is customer support. The ‘always on’ nature of the Internet means businesses must be ready for a higher volume of customer interaction from their online channel, which usually requires additional resources from merchants.

Two paths to online success
When making the leap to e-commerce, businesses can either choose to set up an independent online store with any one of the many e-commerce platforms available, or become part of a community with other online stores (like an online marketplace). Both options have their advantages.

Owning an independent online store offers more flexibility and control. Depending on which e-commerce platform you choose, you may be able to customise a variety of options, including your storefront design, store promotions, customer accounts, and payment and delivery options.

Some e-commerce platforms also offer comprehensive FAQs, active support forums, and 24/7 technical support, so it’s important to do your research and make a list of what you need, before deciding which platform to go with.

A community of online stores (or marketplaces) can often offer economies of scale, as they represent a larger group of businesses, whether in negotiating with logistics and payment solutions providers, or offering customers attractive loyalty programs.

While the degree of flexibility and control over your storefront varies between marketplaces, new businesses can often enjoy other benefits, including competitive rates offered by payment and delivery partners who have existing partnerships with the marketplace, making this one less thing to worry about.

They can also benefit from the existing infrastructure and loyal pool of customers to help them secure their first sales and gain momentum, and keep it going with cross-marketing activities and shared loyalty programs with other businesses in the marketplace.

Merchants can also leverage the marketplace’s brand name to boost buyer confidence, or turn to e-commerce consultants for data-driven insights and advice on marketing strategies.

With more transactions taking place on the Internet, there is an increasing need to have an online presence, otherwise retailers risk missing out on the opportunities that this fast-growing channel offers.

Retailers like Toys”R”Us and Parisilk have successfully leveraged digital marketplaces to complement their brick-and-mortar stores. This should be part of a multi-channel offering that is convenient, trusted, and reliable and provides another touch point for consumers to browse and purchase items.