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The Promise of E-commerce - A Decade of Deterrents Defeated

More small business retailers are coming online to compete with the big players. Has a decline of in-store profits caused this latest trend? Research of increasing online spending? Social proof? Or could it be a new generation of e-commerce hosting solutions?

Although the internet has been a hub of activity for the last ten years there are thousands of retail stores - perhaps tens of thousands in your own community - who have not yet ventured into e-commerce or an e-commerce hosting solution.

Yet the last four years have seen massive growth in online spending, increasing annually by approximately 20%. Current estimates place e-commerce at $200 billion for all of 2007, just within our American borders.

Given the huge potential, what could be holding all those retailers back from becoming successful e-tailers - especially when an e-commerce hosting solution is both affordable and manageable?

As an internet consultant working closely with authors, service providers, merchandisers, and retailers for the last ten years, my perspective is that it all comes down to two core deterrents. Knowledge-belief or money-time.

Lack of Knowledge or Belief in the Internet Economy

Until just recently, as retail stores noticed a decrease in annual profit, the majority of small business owners had limited awareness and interest in the increase of online spending.

Subsequent meetings with retail stores netted similar responses of disbelief to our call to action: "Your business income could increase by 10-100% by offering your products for sale online."

"My customers," they'd state, "aren't using the internet that way."

In reality, it was the shop owner who wasn't using the internet 'that way'. Their customers were most certainly shopping online, at competitor's websites. Research in ecommerce over the last four years supports and proves the fact.

It's hard to argue with that mentality and lack of awareness. After all a retail store should know their customer far better than a pair of web consultants. We'd thank them for the time, leave our card, and move on - knowing they'd be calling some time in the near future.

That time has come to pass.

In the last month (January, 2008), eighty percent of the shop owners we'd spoken with just a month before, picked up our business card and called. Eighty percent in thirty days - they're now ready to learn more about taking their business online.

What Changed 80% of Retail Store Owners Opinions on E-commerce?

In all cases combating the lack of knowledge and changing beliefs transpired as a result of research, a decline in annual retail profit, and social proof.

In some cases the retail store owners began new conversations with their customers. They found that their customers were actually shopping for, or researching products, online. Products that might have been purchased in the retail store were now being purchased from another merchant, online.

Other retail store owners talked to 'the business next door' - in some cases their competition - who had owned an e-commerce capable website for the past year or more. Retailers turned e-tailers - who were doing well and happily sending out packages to new customers secured from their websites.

Still others had engaged in or investigated on their own, media research (newspaper, television) on the state of the economy and e-commerce. The numbers alone convinced them it was time to make the move towards e-tailing.

Expect to see an increase in small business websites in 2008 as a result of defeating the deterrents of e-commerce.