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The Challenges of Moving into E-Commerce

There are many hurdles for small businesses and startups wanting to move into the e-commerce space. We talked to some bloggers and key influencers to find out what they thought.

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Credit: iStock/yoh4nn

Many small businesses and startups want to bring the ease of use of e-commerce to their customers, allowing them to take advantage of this convenience and grow their business. But, there are some key issues that keep them from making that move. We reached out to key influences to get their feedback.

Michelle Killebrew (@shellkillebrew), Group Vice President, Head of U.S. Marketing at Fisher Investmentshad this to say: “Fundamentally, merchants are concerned at entering into a whole new business model. It’s daunting to think through how to market and sell products online versus in a store.”

Security

Of course, security is a big concern.

“Customer payment fraud and payment data security are big perceived barriers. The good news is payment brands are providing checkout experiences that are consumer and mobile friendly that can also reduce customer payment fraud,” said Christopher Danvers (@kingofpayments), Vice President of Payments and Digital Services at American Airlines Federal Credit Union.

“The increased potential for fraud and data breaches within an ecommerce environment may hold some merchants back from creating an online experience for customers. Not only are businesses worried about the impact to their customers, but the impact it may have on their brand,” said Paul Bridgewater (@PaymentPaul), Chief Executive Officer at Sage Payment Solutions. “The latest payment solutions and technologies in the card not present world have been designed to address the security and fraud concerns and can now also improve efficiencies and customer buying experiences, resulting in accelerated growth.”

Remember, everybody is a consumer or customer.

“For organizations that haven't put their catalog online, or who have but haven't promoted / evangelized the channel or have serious usability issues that prevent online purchase, it's a case of "you don't know what you don't know." To overcome this, organizations need to understand that today's B2B buyer is likely a B2C shopper in his or her daily life, and expects the same information, content, and self-service to be available from companies,” offers Linda Bustos (@edgacentlinda), Co-founder at Edgacent. “Even if a portion of transactions ultimately takes place over the phone or through a rep, providing the option to transact digitally not only satisfies the self-service buyer, but also frees up valuable human resources to focus on higher-level tasks. It's cliché, but the competition is only a click away.”

CEO at Hawke Media, Erik Huberman (@ErikHuberman) had a slightly different take on the issue: “I see the biggest challenge is the different way you have to acquire customers.  Most companies that have not had experience in ecommerce expect much higher margins, because they are cutting out the retailer, but that cost is traded with a new cost, marketing.  Without marketing, it is very hard to attract customers.”

Doing this isn’t an impossible task. Says Nicole Leinbach Reyhle (@RetailMinded), Founder & Publisher at Retail Minded: “While e-commerce is undoubtedly a destination that consumers will land and merchants should be a part of, many retailers - particularly smaller ones -- have concerns that e-commerce takes away from their brick-and-mortar experience while also causing operational road bumps that include online security issues, omni-channel marketing and logistics that include shipping, returns and other operational tasks. Fortunately, with the right management, resources and industry partners these issues can all be overcome and better managed -- helping merchants get over their fear of selling online.”

What About Competitors?

“I'd say the biggest concern I'm seeing these days is around how to keep up/how to compete with larger players,” says Tim Peter (@tcpeter), E-commerce/online marketing expert. “While there's no easy answer, you have to be willing to start small, test ideas, learn from those tests, and apply what you've learned to keep improving. You're not going to get great at it overnight. But if you don't start, you'll never get great at it at all.”

Fazir Jameer Ali (@ThatDudeF), SVP, Digital Product Strategy & Innovation at KeyBank sees the opportunity: “Merchants in my opinion have clear opportunity to compete with larger retailers online, which would have immediate impact on their sales and potentially transform their business. However, in order to do so, merchants need to have a robust plan of attack that focuses on their strategy that aligns with customer centricity and the technology that enables them to be successful. Digital payments provide an opportunity to help streamline the shopping process that is safe, secure and frictionless.”

ROI

Co-founder of iVentures Consulting, Aurelia Ammour (@aammour) saw a different barrier.

“Many merchants haven’t moved to e-commerce as they are concerned by an uncertain ROI due to strong online competition and high running costs (platform, customer acquisition, inventory, etc...). Many merchants overcome these concerns by going to marketplaces such as Amazon, Farfetch, etc., ... allowing to reduce these costs, bring exposure and generate sales but requiring accurate curation and/or price level.”

From Lori McDonald (@lorimcd), President & CEO of Brilliance Business Solutions: 

“Many B2B merchants have costs that are difficult to estimate during checkout (like freight shipping) or have customers that frequently edit orders.  The solution depends on the customer, but one possible solution is the storage of customer payment information in a 3rd party PCI compliant payment processor that enables future use of customer's payment information without the need for the merchant to store credit-card data.”

And finally, Paul do Forno, (@dofornop), Managing Director Commerce & Content Practice at Deloitte Digital, talked strategy. “Some Merchants have concerns around investing more into e-commerce:

  • Management are lifetime Retail people and hard for them to see the value selling online with so many “perceived” costs to go online.  
  • Merchants might be wary of investing a lot of time and up front capital costs when the ROI is not clear for them.
  • Merchants sometimes look at other retailers and see that looking at solely their online business they see those retailers either not making their target margin or losing money when only considering the online channel.
  • Some merchants are scared to make the jump because they don’t have the people and experience to take on these new channels.”
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