How to profit online

More and more traditional businesses, from builders and plumbers to small-town retailers, are embracing online selling

In light of the changing ways consumers approach the retail experience, never has there been such an onus on traditional businesses to start thinking about going down the online route.

How can we boost the online side of Irish business?
Eoin Costello, former owner of Novara and ecommerce player Omniserve, says we are now seeing a lot of traditional businesspeople such as builders, interior designers and plumbers looking to incorporate the ecommerce model into their firm’s portfolio to win new business.

Up until recently, many businesses didn’t have to push themselves to sell, but there has been a turnaround, he says, with traditional marketing mediums such as The Golden Pages no longer working.

Another benefit of the ebusiness model, says Costello, is in relation to internal business processes. “With ebusiness, you can free up staff to chase sales by identifying which labour-intensive procedures in your office could be moved online to your website.”

Warren Healy is the managing director of Locallotto.ie, Ireland’s only active online lottery service. This ecommerce venture has already garnered close to 350 GAA, rugby, soccer and golf clubs, while it is also attracting overseas clubs, with expatriates quickly catching on to the idea. Healy believes there’s great scope for companies opting for the ecommerce area. “Recessionary times are perfect for ecommerce businesses because you can afford to provide a service at a much lower cost than a high-street company can,” he says.

Alex French, author of DOT ie, says if people are looking at starting an online business, now is the best possible time to do it, particularly for existing companies. “You are opening yourself up to a whole new world of customers, especially if you are in anything to do with exports,” he explains.

Businesses entering the ecommerce sphere would generally have to get the services of a web-design company and IT specialists to get them up and running.

According to French, companies need to have very clearly defined goals for what they want to achieve; what markets and countries they are targeting; and how much they are willing to spend on their website.

Companies also need to take into account the fact that there will be a once-off cost for the design of the website, as well as an ongoing cost to keep it maintained. “You need to discuss with your web designer how much of that updating you can do yourself,” says French.

The bones of IT
In terms of exporting and the content management you use on your site, things can become complicated if you want to do business in different languages. “Start with English, first of all. Very often, when companies start doing business online, they find there are a lot of logistical issues they haven’t considered. You need to get over those teething problems first,” says French.

His advice for all businesses attempting to break into ecommerce is to try to put up as much information as possible on products, services and even pricing. “You have to try to make it as easy as possible for people to make that jump and purchase. If not, people will move away from your online shop and go to your competitors.”

Companies should target their domestic market first, according to French. “It’s an opportunity for you to take the bugs out of the system in terms of the website, but also in terms of your internal processes.”

French believes that if you are targeting global markets, you need to put a lot more thought into time zones, language, logistics, currencies and dealing with customer queries that come in during the middle of the night.

Meeting online demand
In the online space, businesses need to be able to respond to consumer queries promptly, almost treating it like the traditional retail experience.

“People expect to find the very latest product information, pricing and news about your company on the internet,” says French. “Somebody in your company needs to be tasked with updating your site on a regular basis. That depends on your industry. Monthly may be enough in some industries, whereas in fast-moving goods, you may need to have somebody do it twice a week or even daily to update your pricing, product and stock levels,” he says.

Visually, Costello says you shouldn’t have your website too image-intensive. “Avoid entry pages and white text on a black background. In addition, stick to web-faced fonts such as Verdana.”

The search is on
One way companies are attracting interest on their sites is by introducing blogs. “This is a way to provide useful information to potential customers and try to get people to see you as more than just a supplier trying to sell them something, but as an expert in your industry,” says French.

Costello says people should make sure that search-engine optimisation (SE0) is included on their website. “Search phrases must be in the top left-hand corner to be Google-customised.” “The key thing is that you need to be able to anticipate what you can measure,” explains Healy. Google Analytics and StatCounter are two vital mediums that companies can use to track real-time web statistics. Healy also advocates the use of Google AdWords. Because it’s based on a pay-per-click basis, he says Google AdWords is a very measurable and definable way for companies to increase their SEO.

If they are reducing their traditional ad spend, Costello also says companies should increase their online spend on Google AdWords, as it is far more targeted and has a higher conversion rate. When choosing your domain name, people should consider whether they want to go with .ie or .com, he says. The advantage of having .ie is that Google will rank your site higher in Ireland.

Going for it
Healy says the main mistake companies make at the outset is inadequate planning as far as technologies are concerned. While he says companies should start small, they also need to anticipate that there will be some services that might appeal more to consumers.

Therefore, they need to allow for their website to grow into certain areas other than what they had anticipated. For example, with LocalLotto.ie, there has been a demand for text services. Adds French: “Take small steps and then you can add more interactive features as you grow. One of the mistakes people make is they think if they have a website, that’s it. But, as technology evolves, they need to be always thinking about how they can make this more of an ‘experience’ for their customers.

“Try to pick two or three things you want to do - whether it is to expedite the order process or provide more information to your customers - and implement those first. See how your customers react,” he adds.

Case study: Luzern Solutions
Ken Doyle is the brains behind Luzern Solutions, an Irish electronics company that sells refurbished devices such as Palms Treos internationally. While the company had captured 30 countries in 2007, it has now narrowed its focus to Germany, the UK, France and the US. “We still ship products to many countries, but we have reduced the markets we sell through. LuzernTech is the consumer-facing store we use,” explains Doyle.

In August of last year, the company raised €2.5m from Delta Partners. Doyle says this investment will be “primarily used to expand and build out our infrastructure in terms of the main marketplaces we’re operating in.” Since then, the company has opened up a hub in Chicago to sell products.

Employing up to 40 people, Luzern Solutions is an example of how to capitalise on the eBay model. With eBay now accounting for about 60pc of its sales, Luzern is counted on the site as one of the top five power sellers of goods in the UK, Spain and France.

With the onslaught of new online marketplaces, Luzern Solutions has diversified into sites such as Amazon.

“We see ourselves providing access to all online channels for our clients, either through directly branded stores, via our own store, or through marketplaces such as Amazon and eBay.”

While the company still does online auctions on eBay, it has also diversified into a more fixed-priced area - what eBay calls Buy it Now. Doyle says eBay is trying to push this format more to give buyers a different option.

His advice to companies opting for the ecommerce model is to take it seriously as a sales channel. “Online sales is an area that involves quite a bit of attention. If you are going to do it, do it properly. It requires a lot of focus because, increasingly, customers are becoming much more demanding in terms of service levels and online searches. People want answers quickly. They also want a proper shipping method, a tracker number and competitive shipping rates.”

He says companies can also spend a lot of money on search platforms and not get a very good return for it. “You have to spend time making sure you are using the right search words or maybe doing some links with other sites. Sending some mailshots to existing customers can also be a good idea, informing them of special offers to draw them to your online offering,” he says.

Luzern uses Paypal for its online payments, with Doyle indicating that there is increasing pressure from within eBay to encourage more people to use it. “It’s a very secure method of payment when you integrate it with that platform. There is lots of protection in there for you as a buyer.”

Reproduced by kind permission of Owner Manager magazine - www.businessandleadership.com

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