The current pandemic and the subsequent restrictions in many countries have forced numerous brick-and-mortar businesses to go from “Open for Business” to “Closed Until Further Notice”. What ensued was anxiety, stress, and uncertainty for many businesses with physical stores. McKinsey states in a report that around 47% of the small and medium businesses in the US fear that the ongoing economic crisis will hurt the sustainability of their business.
On the flip side, businesses that have found ways to adapt to the challenges and continue to thrive amid the crisis. Whether you own a huge restaurant in the city or a small store in the suburbs, if you’ve landed on this page, you’re probably trying to find ways to continue operating. And we have the most impactful solution for you—online business.
“Why an online business? How would this help me? I am not sure if I can make it big with an online store”. If these are some of your concerns, then you are in the right place.
Navigate the blog:
- Why ONLINE business
- Advantages of online business
- Three Industries That Have Transformed Tremendously With Online Business
- Tips for First Time Online Business Owners
- Before You Take the Leap
Why ONLINE business?
A recent report by Facebook and Small Business Roundtable shows that 51% of small businesses have increased online interactions with their customers, and 35% of personal businesses have started offering services online.
These businesses are constantly finding new ways to reach their customers online and make adjustments to how they do business to meet their needs. This is primarily because they realize that having an online counterpart for their business can help generate the much-needed revenue to keep businesses afloat, or at least keep moving forward.
Daymond John, a branding expert and a star-investor in the popular entrepreneurs’ program Shark Tank, tells how retail is changing in the current world in an interview with CNBC –
“Retail is changing by the day. It is the golden age for it. Retailers are either dying or striving. They are finding a new way to get to their consumer online.”
You may wonder, “But what is the point of this? How does going online help me now?” Well, the report by Facebook and Small Business Roundtable shows that 56% of businesses using online tools make at least half of their sales digitally.
Ready to take the leap? Here is a step-by-step guide to help you get started with an online store.
If you are still hesitant about getting your business online and prefer to wait out the coronavirus pandemic, do read on as we lay out the significant benefits of an online business that last even past the pandemic.
Advantages of an Online Business
1. Reach Far, Reach More
An online business will help you reach a wider audience and not restrict you to your store’s physical location.
In other words, with a physical store, you are stuck in a place, literally. You have to depend on people walking into your store during fixed working hours. And for the most part of your working hours, your customers will be at work too!
Taking your business online gives you the liberty of taking your store to your customers’ screens, no matter where they are or what time it is, and reaching customers you never knew you had; Yes, even in the middle of a Sunday night.
2. Serve All Generations
Over 2.05 billion people shop online, and the US has the third-highest number of internet users. The most active user group that consumes businesses online are millennials, who form a more significant percentage of the current workforce. These consumers are the smart, tech-savvy, smartphone-driven, social media-centric user group that graciously accepted the tech wave while most of the previous generations are still adapting to it.
That’s right. While the older generation likes the experience of walking into a store, expecting to be educated and experience products first hand before buying it, those days are fading fast. The Millennials and Gen-Z prefer to be self-served over being served. They have a world of choices on the internet, where they can compare online reviews and make informed decisions. By shunning the possibility of an online business, you are shutting out a large part of the consumer base.
3. Scale As You Grow
One of the greatest advantages of an online store is lower overhead costs as compared with that of a brick-and-mortar store. You don’t need a salesperson to woo customers or a cashier to take care of the transactions. And you can continue to operate even when your physical store is closed.
Although online business operations don’t come free—you need to professionalize and maintain it—it requires fewer resources than a physical store. That said, there is a load of tools at affordable prices, and some of them are even available for free.
The best part is, most of these online tools operate on a ‘pay-as-you-grow’ model that allows you to purchase their services as and when needed.
This ultimately eradicates the downfall of overestimated resources that could go unused, while you can still purchase additional resources when you need them.
And hey, did we tell you, our guide to starting an online business comes with a free toolkit to help kickstart your online business venture.
4. Learn About Your Audience
Imagine you are in your store attending to a customer. You interact with them easily, understand their likes and dislikes, personalize their experience, and provide them with a product that will be perfect for them. Imagine the same scenario with two customers. Although you manage to juggle them easily, you will barely tap into their desires. Let’s take this a step further with a bare minimum of three customers. While you balance your time among them, you may not be able to showcase your best products and are likely to lose out on cross-selling or upselling.
But in an online store with audience insights, you will be able to understand the buying behavior of your customers, their journey through your website, the products in their cart that they almost purchased, and more.
Daymond John explains how this information is crucial for businesses to get into good shape.
“If your salespeople now are not in the transactional mode of making a quick sale, and they’re in the mode of making a content and a conversion play and following you home and knowing your buying habits, you’re going to be in good shape,” he said. “But if you’re only thinking of your store as a place of transactions, you’re not going to be in good shape.”
He contrasted this macro way of understanding customers with his experience at apparel company FUBU, where they would ship products to stores but were unable to understand and document their consumers’ interest to scale sales.
So, the more insights you have, the better equipped you are to resonate with your customers. One way to use this information is to send them targeted ads for the product they desire, and for other products they might like to pique their interest. You could include sections on your website showcasing the products other customers had purchased along with the current item. You will also get an insight into products that sell best and those that need more attention.
And As for the Pandemic…
COVID-19, the lockdowns, and movement restrictions have definitely instilled fear and confusion in people. In general, consumers are unable to venture out freely to their favorite stores and buy products they love. Although the restrictions have considerably reduced, many people still avoid going out and feel a lot safer buying from their homes.
And they will continue to do so until there is a definite cure or vaccine for COVID-19 because even if the number of positive cases drops, there is no guarantee it wouldn’t spike again.
Owing to all this uncertainty, the next best move for businesses like yours that operate out of a store is to take a leap forward towards technology and establish an online business.
Want to get started ASAP? Here is an extensive guide to setting up an online business.
But if you are wondering “how can I be sure that it will work for me?”, well, here are three traditional brick-and-mortar industries that are thriving online now:
Industries That Have Transformed Tremendously With Online Business
1. Groceries and Restaurants:
Under normal circumstances, the good old local grocery stores and restaurants can thrive even without expanding online. For these businesses, an online counterpart is a “nice to have”. But, at times like these, an online presence becomes an essential part of the business and communal infrastructure.
There are various types of online businesses. In this sector, businesses have adopted two kinds of operations.
First, the hyper-local delivery model where e-commerce platforms such as Instacart, Boxed, Amazon, etc. forge delivery-based partnerships with the neighborhood stores and fulfill grocery orders by customers. With more and more people relying on these businesses to buy their essentials, many local stores have partnered with these companies.
The second model involves building an online store in their own domains. A perfect example of this would be giants such as Walmart, Target, and Dominos, which have dedicated websites and apps through which consumers can place their orders.
Brick Meets Click follows this online trend closely and releases monthly reports based on its observations. Its recent report shows that online grocery sales in the US hit $7.2 billion sales in June, 9% more than May, with only $4 billion seen in March.
The online customer base has also expanded to a shocking 45.6 million monthly users in June from 39.5 million in March. A year ago, in August 2019, it was way down at 16.1 million.
The trend for restaurants isn’t much different. Many dine-ins have been replaced by takeaways with the help of delivery partners in recent months. Some have their own delivery service, while a few others have pivoted to delivering groceries instead. Dawn Kelly, who runs the Nourish Spot restaurant in Queens, describes how she operates her business amid the pandemic:
“We keep the door locked, we go to the door, and we give them their food from behind the door with gloves on,” she said. “The same thing with our delivery app drivers, we’re not letting them in, they are showing us their phone through the window.”
2. Fitness and Wellbeing:
The multi-billion-dollar fitness industry embraced the hit of the pandemic and completely reinvented itself. As people continue to avoid local gyms and wellness centers, this industry has brought itself to its customers’ homes with online classes on various platforms.
Models similar to the hyper-local delivery cropped up in this industry, too, as businesses such as ClassPass and Mindbody partnered with local gyms and instructors to bring live-stream and pay-as-you-go classes to subscribers.
On the other hand, fitness giants such as Cure Fit and 24 Hour Fitness have established their own platforms and live-stream classes for members. Cure Fit took it to the next level and enhanced user experience with a plethora of technology. Its advanced and real-time scoring algorithm processes user movements via camera and measures their energy level. This brings them closer to an in-class experience to maintain the same competition and energy.
Cure Fit described their technological journey as “At the heart of delivering an engaging experience through our live classes is the Energy Meter. There is a lot going on behind those colorful little bars that fill in as the intensity of your workout increases. Even better, it constantly reminds you to push harder and further to be more active.”
Apart from this, some individual instructors keep it simple and use video conferencing software to conduct live remote sessions. Amy Smith, a yoga instructor in New Jersey, has been holding live, online yoga classes seven days a week during the pandemic.
“I do them on Zoom then upload them on YouTube then link them to MINDBODY to get to as many platforms as we can get on,” she says.
Although workout at home sessions existed pre-COVID, it became the norm when the pandemic hit. In an interview with Forbes, Amaya Weddle, Vice President of Research and Product Marketing at Mindbody, said customers for live-stream and pre-recorded classes have increased tremendously—73% in 2020 versus a mere 17% in 2019. About 85% of the company’s customers now attend live-streamed classes weekly, up from 7% in 2019.
3. Education:
Although many governments have temporarily closed educational institutions, the pandemic accelerated the adoption of ed-tech platforms worldwide. Globally, weekly downloads of ed-tech apps in March increased by 90% from the final quarter of 2019. Google Classrooms alone registered a 580% spike in downloads in March. From elementary school to universities, students everywhere have started attending classes in this new way as educational institutions shift to a digital curriculum. Individuals and tutors in every industry have also turned to video conferencing platforms to continue teaching.
One example of education businesses that have seen great success online is Prep Expert. Shaan Patel, the founder of this ed-tech platform, specializes in SAT and ACT preparation and has helped tens of thousands of students improve their scores through online classes. And since finding success in this area, the company has expanded to coach for other competitive exams as well.
Shaan reports that Prep Expert recorded about $6 million in revenue annually since 2016. In an interview with Forbes, he speaks about the company’s successful digital marketing strategies.
“Facebook is the best social media platform to advertise on regarding return on investment. The Facebook ads course teaches entrepreneurs how to find new customers, convert sales, and use advanced features to create exceptional Facebook Ad Campaigns to increase revenue for their business exponentially,” he says. “Google AdWords is a great platform to use because it targets people who are actively searching for your business.”
Another great example is Meter Music School, a local music school in Seattle. First, they moved all their group classes online, made them available for free, and established a solid consumer base. Then they shifted to a “pay what you can” model to continue operating.
This does not stop with schools and universities. Professionals from several industries are upskilling using online learning platforms such as Coursera and edX. These platforms have also ramped up their courses and offer free lessons from the best universities in the US.
Despite the technological revolution of the past decade, these three industries had stayed traditional. But in the need of the hour, they were among the first to transform. Taking the digital leap is a huge step for any business, but it is essential now. And when the pandemic is over, a successful online business will serve as a second revenue source.
How do you start an online store? We’re giving away a free manual that will guide you through the process.
Tips for First Time Online Business Owners
An online business can be managed more or less like a traditional one although the day-to-day operations may vary. We understand it is easy to get overwhelmed and intimidated in a new space. Here are a few things to keep in mind when you start your online business.
1. Take regular feedback
It is crucial to listen to feedback from your customers. It is easy to weed out negative comments. In doing so, you will not be able to soar high. Take the negative comments as constructive criticism and work on making those areas more effectively.
2. Stay on top of customer analytics
Make full use of your audience analytics. It is the key to growing your online business. By analyzing and understanding your customer’s buying behavior, knowing their desires, as well as how your business is performing and what you need to improve, you will know exactly where to concentrate your efforts.
3. Don’t fear larger competitors
It is easy to get intimidated by more established competitors. But to be honest, they started like you did. Look at them as an inspiration, analyze how they got from point A to B, and find out how they tackle problems. Following their best practices will accelerate your journey.
4. Choose a winning team
While you are passionate about your business, you cannot do it all on your own. You need help. When you hire employees, make sure their needs are aligned with your goals. This extends to products and tools as well. You will want to choose products that are user friendly and work with providers who care about your success.
5. Prioritize customer support
Customer support exists to give your business a second chance for unhappy customers. So make sure you resolve any issues they face and win them over again.
6. Only invest in the right tools
A good thing about moving your business online is that there are plenty of third party tools and services that you can make use of to scale your business without really hiring new people. Want to set up a loyalty program? There are apps that can do the job for you. Sending an email to people abandoning your website at checkout? There’s an app for that too.
But here is the thing – your business is much more vulnerable online than it is at a physical store. A rogue app or extension could leave your site open to hackers. More commonly, a poorly coded script could interfere with your script and make your site slow, disrupt workflows or potentially even delete critical data from your backend.
If you run your store on a popular platform like BigCommerce or Shopify, you may feel tempted to install all the various apps available to grow your business. But make sure that you read reviews and verify the legitimacy of the app so that you only install the best apps.
Before You Take the Leap
If you have operated the traditional way all your life, an online business can seem challenging. Whether you are going to create your own online store or partner with third-party platforms, choose wisely by taking the cost and convenience into account.
Set up dedicated finances not just to start an online business but also to keep it going. Calculate your logistics and payment options.
And last, but most importantly, be willing to learn new tools and technology and update your stack as needed.
