Many entrepreneurs are under the delusion that once they build an e-commerce website, consumers will begin flocking to their virtual door. In reality, a physical store acts as an established market where the customer has already agreed to the idea of buying a product — they’re not walking into a completely new experience, they already know what they’re going to get and where they have to go to get it. This explains why many e-commerce websites fail, as their owners did not properly validate their ideas before launching their online storefronts.
Start with the sales figures you already have
Before you begin building a website, pull the sales figures for your physical store’s top performers on a spreadsheet. Isolate the products by volume, margin, and shipping practicality, prioritizing items that are easy to ship and not too heavy. In-store and online sales are completely different markets, and the bestseller in your store may be a 25 pound bag of topsoil. Get used to the idea of treating your in-store sales as a wish list for your webstore.
By cross-referencing these three lists, you should be left with a few specific SKUs that require no special handling, are small and light enough to ship easily, and do not have a high return rate. This list is not what you’re selling, it’s what you’re testing, and what you’re doing here does not require a graphic designer, developer or Facebook ad budget to find out what has demand online.
Prove demand before building anything
Many business owners make the critical mistake of assuming that if something sells in the physical store, it will sell online. That is confirmation bias, not market research, and confirmation of market demand is an essential step before any financial investment is made in your online sales channel
The simplest way to find out if there’s demand for your products is to make a single page with a description of your best products and a couple pictures, then give people the ability to either email or text you, or make a pre-order. Send this page to your email and SMS lists, as these are people who have already expressed interest in what you have to offer. If your most loyal customers are not clicking, signing up, or ordering, your web visitors are even less likely to.
Google Trends and keyword research is another reliable method to discover the hidden demand for your products. Check the search volume for the terms you’re using, not just product availability, as clients browsing your website are not the same as clients browsing your store. The tendency to conflate the two is one of the most common mistakes made by new e-commerce sellers.
Study your competitors before copying their business model
For every product category, there are only a handful of online-only competitors, and their reviews are all public domain. Spend some time reading them, and don’t get hung up on the pretty pictures. You’re looking for red flags, and you’re training yourself to look for them. Sizing runs small, three week shipping times, fake pictures, crushed packaging.
Every negative review is another feature your competitor does not have, and if one competitor is getting roasted for vague sizing, you should take that as a sign to obsess over being the most precise in your field. The same goes for shipping times and other drawbacks in the eyes of the consumer. Reading reviews is a free way to understand what customers do and do not want, and the insights gleaned from them will be far more valuable than any market research the company can provide.
Pick one system and stop trying to connect them all
Many businesses fail before launch due to inventory discrepancies. Your POS says you have twelve t-shirts in stock, your webstore says twenty, and the customer orders one, which turns out to be unavailable. This happens most frequently when owners use separate systems for their physical and digital sales, and attempt to manage inventory by hand at the end of the day. It is extremely difficult to manage and will become unwieldy the second you attempt to scale beyond the pilot phase.
The easiest way to avoid inventory issues is to use one system for everything. For example, Shopify POS syncs orders and customer accounts in real-time between the register and the website so that a sale in one is reflected in the other immediately. This is far more efficient than attempting to sync them yourself at the end of day, and makes it much easier to prevent order fulfillment issues. Inventory management is the difference between a smooth pilot launch and a deluge of angry customer emails.
One final note before you pull the trigger on a pilot program and begin paying monthly fees: price points and add-ons change frequently, so it’s always worth checking out current Shopify deals and discounts before signing up. Significant discounts can really help cut costs during the crucial early stages when you’re balancing budgets and trying to get the most out of every dollar.
Rebuild your product content for a customer who can’t touch your products
In your physical store, customers can run their hands over a sweater and decide right then and there whether or not they want to buy it. Online, that entire sensory experience has to be recreated in images and text, and having clear, straightforward product content is an absolute necessity for any webstore
Plain white backgrounds and a few well-chosen shots of the product at different angles and close-ups of fabric textures are a good start, but measurements are even more important, and it’s worth being completely precise rather than using vague language like ‘medium’. Honest product content is far more important than you realize, and describing a fabric as warm or breathable can drastically reduce your return rates. Customers who know exactly what to expect are much less likely to be surprised by a product’s quality or comfort.
Turn your storefront into a fulfillment center from day one
Do not leave out local pickup and delivery options for your webstore, at least not for long. A customer who makes a purchase online and picks up the same day order at your store an hour later is infinitely more valuable than one who had to wait for shipping. This allows your employees to upsell during pickup while also removing the surprise cost of delivery at checkout, which is an especially invaluable tactic for larger, higher priced items.
Local pickup and delivery options are vital to consider, and will allow your store to function as a sort of order fulfillment center. It is also worth noting that online-only retailers do not have this option, and this availability can be an extremely important selling point for your own website.
Write your returns policy before you need it, not after
Here’s a statistic for you: online purchases have a two to three times higher return rate than in-store purchases. Ecommerce return rates average between 20-30%, compared to single digit returns for in-store sales (NRF/Appriss Retail). This is largely due to the inability to try before you buy,
and if you do not write a formal returns policy before launch, you’ll be making it up on the fly during your first bad week
Decide for yourself whether you want to eat the shipping costs on returned items or take them back in-store and charge the customer for return shipping. Decide if you want to allow returns in-store or only online, and write all of this down and put it on your website. A well-written and easy to find returns policy will instill far more trust with your online customers than just about anything else you could do for your product page.
Recruit your existing customers as launch fuel
Your existing customers are the most valuable asset you have, and most retailers completely waste them. Put QR codes on receipts linking to your website and have your staff tell customers about it at checkout. If you’re not collecting emails, start doing so, and offer an exclusive discount to your email list to incentivize people into actually visiting your webstore for the first time
This is especially important because customer acquisition for a new online store from cold audiences is expensive at first
You’re paying to build brand awareness with people who have no idea who you are, while existing customers are a known quantity who will not only visit your website, but purchase from it.
Spend carefully on paid traffic and measure everything
Set a small, reasonable test marketing budget for your pilot launch rather than an open-ended one. Something between $300 and $500 that you will spend on Google Shopping and one social media platform over the course of a month is a good start, and you’ll be able to determine whether or not your spending is a worthwhile investment.
The real test is not how much profit you turn per customer, but whether or not you’re capturing new customers for a reasonable price, compared to what you know your customers’ lifetime value is for your physical store.
If you’re not making a profit on new customers, or your customer lifetime value is lower for online sales than it is for your physical store, you should pause and reconsider. This is also the stage to tweak and optimize your spending based on what you’ve found. Moving forward, testing product pages with A/B testing and tweaking your website to improve conversions is a worthwhile endeavor. Online conversion rates are notoriously low, often ranging from single digits to teen percentages, so improving your website’s design, checkout process, and trust signals can have major benefits for your sales figures.
Treat the first 90 days as testing, not proof
Your 90 day pilot program should not end as soon as your website launches. It should last until you have spent a couple months tracking weekly conversion rates, cart abandonment rates, and average order value. This is also a good time to run A/B tests on your top product pages, and remove SKUs that have consistently underperformed as they will only drag down your overall sales.
It is also during this period that channel-cannibalization typically begins, and you should ensure that you are not simply capturing sales from your own physical store with your webstore. If you notice that online sales figures are made up entirely of customers who would have shopped at your physical location anyway, you should be adjusting your pricing strategies so that your online and offline sales channels complement rather than compete with each other
You did not build a multichannel retail empire overnight, and you should not expect to launch a webstore and immediately begin scaling it into a major revenue stream. By validating demand, testing a small product catalog with your most loyal customers, and only then scaling when the numbers dictate it, you are protecting the integrity of your physical store while giving your webstore the best opportunity to succeed as a separate, but connected channel.
