by Bruce Harpham

How online businesses grow sales in the offline world

Aug 23, 2016
CRM SystemsE-commerce SoftwareMarketing

The efficiency of ecommerce sales with one-click checkout and third-party fulfillment can come at the cost of intimacy between you and your customer. Here’s how some online businesses are getting personal.

customers meeting
Credit: Thinkstock

The recent success of Pokémon GO offers food for thought for online-offline integration — not so much in the world of video games, but in retail.

Offering multiple payment options and distribution channels is a key strategy for retail businesses to grow their bottom line. And, for some online retailers, that means expanding into brick-and-mortar retail.

For example, Warby Parker, an eyeglasses company, started in ecommerce and has expanded into retail stores. Indochino, a custom men’s clothing company, has opened showrooms in several cities, and CEO Drew Green said that the stores “can improve online sales in a city by as much 700 percent,” according to TechCrunch. Even Amazon, in an ironic twist has opened brick-and-mortar bookstores.

But permanent retail outlets are only one option. Here’s how some smaller online retailers are finding new ways to connect with customers.

Going face-to-face

For small retailers, in-person selling can build intimacy between the vendor and customer, something that’s lost with one-click checkout and third-party fulfillment.

Josie Lee, owner of RIRE Boutique, a clothing boutique in Sacramento, Calif., that sells products both online and through retail locations, sells at live events to help her plan the best locations for retail shops. “Selling at live events helped me to understand where my customers live and what products they like,” Lee says.

Selling in person makes a big impact for merchants selling consumable products. “Being in the food industry as a tea retailer, the ability for a potential customer to sample the product in person will almost always translate into a sale,” says Renata Lewis, co-owner of T By Daniel, a tea retailer in Brampton, Ontario. The company’s in-person sales strategy includes selling at niche events like the Toronto Tea Festival as well as events with broader interest.

Event-based selling offers special benefits in terms of customer research especially for companies at an early stage. “Early on, it was interesting to see which events and locations attracted the most customers. That informed my decision to plan retail locations,” says Lee.

Operational challenges

In-person selling offers clear benefits for online retailers who are building their brand or expanding their footprint, but it also introduces operational challenges they may be unaccustomed to navigating. While online orders may be automatically moved through a workflow from order to fulfillment, in-person sales have manual steps. Payments, tracking inventory and collecting customer information for fulfillment are some of the operational points to manage.

Some small retailers I spoke with use Square for collecting payments. They found the setup process easy and the Square App Marketplace provides integrations to other business applications including Quickbooks (financial management), IFTTT (a free, web-based automation service), and Stitch Labs (an inventory management service).

“The only issue that we have faced with Square is that we are unable to accept debit transactions which can be detrimental, especially at smaller events,” says Lewis. From an operational standpoint, the product has performed well. “Square has proven to be reasonable in terms of pricing for us, they have always provided us with reliable service, and they are easy to use.”

Managing inventory with an ecommerce platform and Square takes some work. “I take about 1-2 hours per month to add new inventory into my ecommerce platform and Square. I start by adding new items in Bigcommerce, then export data into Square,” explains Lee. After the initial setup, synchronization is automatic: “Let’s say you restock Widget A with 10 more units, you can update that on Bigcommerce and that will automatically update on Square’s end,” Lee added. Other companies use a manual process. “We manually track inventory based on sales data in Shopify, our ecommerce platform, and sales made through Square,” commented Lewis.

The pop-up option

At first glance, the idea of an online firm investing in a retail space seems antithetical to the flexibility prized in internet business circles. But pop-up retail — short-term selling in a physical space, often around holidays or special events — makes it easy to get started and can offer the best of both worlds. Melissa Gonzalez, author of “The Pop Up Paradigm: How Brands Build Human Connections in a Digital Age,” has worked with ecommerce firms such as Ministry of Supply to experiment with pop-up retail.

Can your business get a boost from a pop-up? Companies that sell clothing and consumable goods have been early adopters. “We have had clients that have seen their cart size grow two times when their online customer walks into a space where they can touch and feel the brand,” Gonzalez told Fortune, bringing to mind how Indochino’s physical showrooms boost online sales.