Comment: How innovation can unlock the door to online sales
Now that buying online has become second nature to a growing percentage of UK shoppers, the inevitable question is just how far internet shopping will permeate into the retail landscape. By Steve Goodheart
Many of the high street’s major players are already using the web as an additional sales platform - not only as an extra service to customers but to also give them a significant advantage over smaller competitors.
The retail climate is tough enough for many small to mid-range businesses without having to compete on an uneven playing field with their larger rivals.
We’ve just started working with technology business AIMES Grid Services to advise businesses with turnovers of between £1 million and £5 million on how they can compete. The research we’ve completed as part of the job shows the startling extent of the picture.
Across the UK, we’ve found mid-range retailers are collectively missing out on £400 million per year in lost revenues because they have been unable to justify the cost, or do not have the in-house expertise, to set up an e-tail platform.
In the North West alone, there are 400 mid-range retailers who are missing out on the increased sales that transacting online can bring, which equates to around £40 million of lost sales each year. As a starting point, most of these retailers should be capable of generating an extra 10 per cent of sales by moving into transacting online.
Innovation and technological advances mean that businesses who couldn’t afford to start selling online just a year or so ago can today find a solution which will help them better compete. Cloud computing and next generation, energy efficient infrastructures mean that there are new cost-effective ways to replicate and even improve on the services offered by traditional software providers.
Set up and running costs can now be up to 50 per cent lower than traditional solutions – and some proactive Universities now offer two-year subsidised secondments that provide retailers with the manpower to roll out an e-tail site.
Increasingly retailers need an online platform built around their specific needs, both current and future, but at an affordable cost. Across the country there are retailers, ranging from the very small upwards, who perceive the need for their businesses to be selling online but have not been able to resource this vital platform, particularly in the current economic climate.
But this is just the time that such a move should be made in order to protect the future of many of these businesses by serving their customers better and defending themselves competitively.
Steve Goodheart is a partner with Transaction Partnership
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