The United Kingdom has the biggest e-commerce market in the world measured by the amount spent per capita. The business done online in the UK was judged likely to grow by 10 per cent between 2010 to 2015. Which seems like a very low estimate to me.
A report by IMRWorld published in March 2011 claimed that total B2C ecommerce sales in 2010 grew to €591bn, an increase of close to 25 per cent. IMRWorld estimates that growth would pass the trillion-euro mark in 2013.
So there is plenty of indication that as a trend ecommerce will be set to continue. But while some enterprises only exist online, not all businesses yet have an ecommerce offering. And it’s nothing to do with scale, either. Morrisons supermarkets, for instance, will not be announcing any ecommerce plans in the UK for another year.
It said “Morrisons does not yet offer an online service, as we do not believe any retailer in the UK has achieved the right balance of service to customers and profitable returns for shareholders.”
Not that it is a digital-denier either: the Morrisons group owns online baby-product retailer Kiddicare and last year appointed former Apple executive Simon Thompson to work on their online food retailing project, where they are learning from US online grocer FreshDirect in which Morrisons has a shareholding.
Morrisons are not alone in having a concern that profitability is not guaranteed by moving online if an entire business model has to change.
Not every business transitions easily to the web, and for many, the problems of change can outweigh any potential for gain.
In the world of media, according to the Pew Research Center’s Project for excellence in journalism, in a study of 38 US newspapers, for every $7 lost in print product sales, only $1 is gained in digital revenue.
So if your organisation is a latecomer to developing online business, where do you start?
First off, find some allies inside your business. You surely must have discussed this with your sales, product and marketing colleagues? You’ll have got some ideas together, but you need to crystallise them into a project:
Step 1: Build the business case
Like any project, activities will cover many bases, but you’ll need to start by fleshing out a business case, even if this is just some initial guidance for a brainstorm or a secret ‘skunkworks’ research project.
Review your entire web presence:
Look at your existing web site, social media usage and email marketing. Work out what it is you need to develop a digital business.
Ask your peers. Network with your fellow IT professionals. You’ll get a good feel for what they are doing and how.
Do some sector-specific research:
Look at what the competition is doing and make some intelligent guesses on revenues and likely costs.
If you share any common suppliers, what can you glean from them? Find out how that relationship works. Find out how their web presence drives custom to them.
If you operate in a B2B sector, compare it with the B2C sites you know already. Determine the primary product set for the online business. Even solicitors are industrialising processes now and putting legal services such as conveyancing, will writing and divorce online.
Check out the competition:
Determine whether the competition is capturing orders or just expressions of interest with its online presence. What customer information is captured?
If you are looking at ecommerce, Determine how transactions are going to be processed, who fulfils the orders and what the fulfilment mechanism is going to be.
Actually test out the competitor’s web sites and their on-line stores. Don’t just browse around a bit. Order some things and see how well the process works. Then send something back.
If things don’t work 100 per cent online see what happpens when you ring a help line. You will not appreciate the full customer experience unless you try it all out.
Search for competitors’ products and services on the web and see how successfully they are ranked in Google. Start to find out how you will achieve better results for your company when you launch.
See how easy it actually is to complete transactions and buy things. You need to do everything possible to reduce friction on the customer’s journey through your site.
If you already have an ecommerce site, it’s worth doing all this too. Often retiming deliveries, dealing with returns and making complaints are a major hassle for customers and could be streamlined easily and interactively, reducing hassle and building customer loyalty.
These are activities worth doing whatever the size of your business and however established you are as an online player.
Step 2: IT specific research
The first technical consideration is how much customisation is required. If you’ll only be doing modest business initially online, then are many solutions available ready-built off the peg, but this may have an impact on scaleability. Decide how much your point of presence is going to need to grow.
Unpick the code:
Snoop behind a site’s front page by viewing the source HTML, either by doing a basic ‘view page source’ in your browser or installing Firebug or similar, for a more detailed performance and activity analysis.
Look at existing web sites in this way and you can pick up some good clues about who built the website or what CMS or ecommerce engines are being used to run them.
If you do not have real-world experience of running web applications, then you need to do some serious research and begin to acquire expertise. Look at open-source solutions, such as LAMP-based technologies (Linux, Apache, My-Sql, PHP), and compare to what can be achieved with .NET, say. Either can provide a good solution, but you must chose wisely.
Outline the architecture:
Bare in mind that one of the key ongoing costs of running most web sites is allowing for their constant renewal. This should not be shied away from. It’s what keeps them alivem in terms of new products, content and changes to the way that they actually function.
New features are always wanted; sites have to be kept up to date stylistically; behind the scenes technologies are improved, tuned and service releases constantly available.
This is primarily what has made open-source extremely popular among web pioneers: it reduces outlay on technology; fine young minds leave college every year, with great skills learned in a LAMP environment; improvements are constant thanks to the community; and there are multiple ways of addressing problems of scaling up to handle greater site traffic.
Choose your browsers:
There is more than one consumer operating system and browser to consider: Any off-the-shelf solution that only ticks a Windows and Internet Explorer box will not do you a great job in channelling customers.
Different web businesses have different user profiles and they will culturally favour diverse means of access: Younger teenagers may be using Safari on an iPod.
Older teenagers may have iPhones or Android-based mobiles; there are of course iPAds and other tablets; Apple Macintoshes and even some die-hard users of desktop Linux.
So as a basic set of browsers to satisfy, you’ll be looking at Safari on Mac and iOS, Firefox on Windows, Mac and Linux, Chrome on Mac, Windows and Android.
And while you’re considering that lot, don’t forget the Opera browser either. If you don’t use all these browsers and platforms, start now and get your It team and other colleagues involved.
You won’t appreciate the differences between them, their market share and what they can do to a web site until you investigate each fully.
Consider online fashion and obsolescence:
Be aware of over-reliance on Adobe Flash. Consider adopting HTML5 as your site standard if you are building from scratch now and ensure that any interactive or animated content that you will want iOS device users to see will work.
If you use third-party suppliers for video hosting/distribution make sure that you can get the video feeds to be iOS and HTML5 compliant too.
If you get your website right for iOS you can put off thinking of building a dedicated iOS app until later on, when the costs have a market justification.
Get the right help:
If you’re considering a build project, talk to design agencies with experience in your market.
See if they work with any more technical build agencies with experience of scaling up applications, ensuring the security issues are covered, and that the back-end users in your business will have as good a user experience as the paying customers using the front-end.
And if your business is really struggling to transform its brand, products and services to the new world, be aware that there a many specialist consultancies, some allied to advertising agencies, that are doing very interesting work in envisioning digital propositions and customer and user experiences.
Don’t forget the Back-end experience:
Whether you buy an ecommerce system or build it, as mentioned don’t forget the back-end usability that only your staff will see. There is no point it being a terribly clunky process to upload or input new product details or edit text and pictures.
Inefficiency will breed more inefficiency.
Explore integration possibilities:
If you have a complex stock catalogue, develop the links to your central system to ensure product descriptions and pricing are loaded from the central database when changes need to go live.
Think outside the box when you are planning your site architecture. There may be other systems you need to link to, such as your email marketing mailshots or your CRM system.
Consider how the site’s performance will be reported. Make sure you can assess the conversion rate from page views to purchases and follow your customer’s journey through your site.
Perhaps most importantly, make sure you can measure your site’s profitability.
Step 3: Regulations and compliance
The days of the internet being a regulation-free zone are well and truly over. You will need to know how to comply with national and international laws on trading goods. Plus, some rules on accessbility.
Make sure you know what you will need to do to make your site usable by the partially sighted, the blind, the hard-of-hearing, the deaf, and those with other physical or learning disabilities. The British Standards Institution publishes a code of practice guide to web accessibility.
Protect users’ data:
If you’ve not done much on the web, you may not be up to speed with the legal and data protection issues. And obviously, these being the subject that they are, this is not going to be covered off in a few minutes.
Data protection will cover the gamut from acceptance of website cookies and where in the world data is processed, to whether you ask customers and site users to opt-in or opt-out to being on mailing lists that you use, or may in time think of renting to third parties.
You will find good advice from organisations such as the Information Commissioner’s Office and your company lawyer.
You will be expected to outline the terms and conditions of trading somewhere on your site. Your collaborators in legal will generally favour legalese.
You may also find that some marketing types can also tend to overcomplicate the wording, particularly with terms and conditions and opt-ins.
I would advise you to campaign very strongly to keep the language simple as possible, and to get these terms and conditions right first time, never to be changed unless wholly unavoidable.
I know of some sites where marketing changed opt-in to opt-out and back again multiple times. But no-one changed the meaning of the tick in the box in the back-end database. So reconciling whether people had opted-in or out to marketing emails became a somewhat convoluted process to sort out. And that problem may be left to you.
Step 4: Don’t give up
I must confess that I have in the past lobbied a previous FD and Chairman on an almost daily basis to get an on-line project moving, passing on every snippet of market analysis and relevant data I could find.
But, it had to be done, as top management FUD (fear, uncertainty, doubt) just begets inertia.
As with Morrisons, mentioned earlier, not bringing a product to market because you don’t have current faith in the market is wholly different to not having a product.
Skill-up, in the IT dept and across the organisation:
Hold technology ‘master-classes’ to raise awareness even of issues such as the differences between Macs and PCs and different browsers. Get your IT team in full ambassador mode. Make sure you can all talk about the success stories in your market place and begin to share some vision around the organisation.
Start small – not in ambition or capability:
But, make it manageable. Safe experimentation, behind closed doors is the best approach.
Use an agile development technique that makes things work step-by-step and gives something to show for your efforts.
Do your own PR:
Makes sure your project gets good exposure internally; even if it is very secret squirrel experiment. All relevant department heads must be actively involved.
Test out consumer-friendliness on friends and family of colleagues and remedy as you go. Resist completely any pressure to launch a site that does not work properly from either a technical or usability perspective.
You can start with limited functionality or only a partial catalogue of goods and build up the rest. Whatever you go to market with has to be able to stand on its own two feet and look the world in the eye.
As CIO your role will be catalyst, change-maker, innovator and ultimately the person that made things happen. Manage that project well and you will be able to add to your CV: “Built online business worth £…”
About the author:
Nic Bellenberg has specialised as an IT Director in the media sector and has been at the coal face of the magazine industry going digital. His career includes IT Directorships at Haymarket Media, Hachette Filipacchi and Hearst Magazines. He began his career as a sub editor.