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Ecommerce is More than Selling; It's Retail Business Evolution

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Ecommerce is More than Selling; Its Retail Business Evolution daily-golden-nugget-1572-39
Twenty-five years ago, no one understood how the internet would trigger an evolutionary change in how almost every business in the world operates. Today, most businesses have some type of website to represent themselves online, and even the companies without websites have some type of online presence in business directories like Yelp and Google Maps.

It seems like every business industry has figured out how to use the internet to improve the efficiency of their business and their customer service. According to the Bureau of Labor Statistics all businesses can be classified into one of these main sectors:

  1. Agriculture, Forestry, Fishing and Hunting

  2. Mining, Quarrying, and Oil and Gas Extraction

  3. Construction

  4. Manufacturing

  5. Wholesale Trade

  6. Retail Trade

  7. Transportation and Warehousing

  8. Utilities

  9. Information

  10. Finance and Insurance

  11. Real Estate and Rental and Leasing

  12. Professional, Scientific, and Technical Services

  13. Management of Companies and Enterprises

  14. Administrative and Support and Waste Management and Remediation Services

  15. Educational Services

  16. Health Care and Social Assistance

  17. Arts, Entertainment, and Recreation

  18. Accommodation and Food Services



Each of those above 18 listed sectors uses the internet differently. In my own personal life, I use my utility company's website monthly to view my utility usage and pay my bill. I check transportation schedules for the local trains, busses, and subways all the time through a website. When I travel, I would prefer to book all my hotel room through different online booking websites rather than calling a hotel directly.

Every business sector uses the internet differently, but within each sector you will find the businesses using the internet in similar ways. Some of these sectors have married their online presence to their offline presence so that changes to online information are immediately available at physical locations. For example, a hotel room booked from your smartphone is immediately visible by the hotel front desk clerk.

Systems to marry, or connect, offline and online information didn't happen overnight. There's 25 years of trial and error, development, and learning that has already taken place. When it comes time to build a website, you should investigate the different service companies that have built solutions for your specific industry.

My company falls into the Information sector listed above because we provide the data processing, hosting, and design of internet related information technology. Our services are offered to businesses in the Wholesale Trade and Retail Trade sectors.

According to the University of Minnesota Libraries Publishing and eLearning Center, the retail and wholesale trade make up only 12% of small businesses in the U.S. That 12% seems like such a small number considering the amount of press that the retail industry gets every day. It seems like store closings, store openings, and quarterly retail sales figures are in the new headlines every time I read the news.

Live Inventory for the Retail Trade


Twenty-five years ago, the cost of a website was extremely high because every idea was new and all the programming had to be written from scratch, which meant high labor costs. I worked on a few websites in the mid 90s that carried a cost of $100,000 USD; if we factor in inflation those websites would cost about $160,000 USD in July 2017.

Today, there are a lot of experienced programmers and open source code that allow for websites to be reasonably priced for any size retail business. Those same $160,000 websites that took months to program and were built from scratch are now about $5000 and take weeks to set up using pre-existing code that was created for each industry.

Great strides have been made in the retail sector to marry the online activities to the offline world. Ecommerce is the popular buzzword that represents online selling, but that only represents a small part of how retail stores use the internet and how they make that ecommerce come to life.

Ecommerce is usually thought of as a simplistic way to pick an item from an online catalog, place it in a shopping cart, then pay for it. It arrives on your doorstep a few days later. As of this writing, in 2017, I'm still seeing a lot of small retail businesses that have set up basic ecommerce websites using simple systems, like Shopify, to sell online. Shopify is inexpensive and easy to set up, but it doesn't have the real benefits that could help a small business truly connect the online and offline worlds together.

The first step in marrying the online and offline worlds is to maintain one single inventory database. Most of the small retail businesses I encounter are maintaining an inventory management system in their store and they are painstakingly uploading part of their inventory to their website. Not only is this process double work, but it also doesn't allow for customers to see what you really carry in your store.

Perhaps twenty-five years from now it will be common place for all retail stores to have a unified inventory, but today there is a real barrier to accomplishing this goal; specifically, the methods of tracking in-store inventory have no way of connecting to the website. Sometimes this is because of older inventory software that hasn't been upgraded and sometimes it's because the business is new and hasn't even started tracking their inventory.

Unified inventory management can only happen when the retail store takes the bold step to replace whatever they are using today with a modern method of either using a cloud based inventory system or implementing a new in-house system that also maintains a live connection to the website. I won't say this is easy, but I will say it's an inevitable evolution.

More Than Just Inventory


Although I consider inventory management to be the first big hurdle for retail businesses, there are many other ways a retail store can marry their online and offline activity together. After the inventory the next step will be customer accounts, including sales records.

With customer records online you can then start to collect a lot of new information that you've never thought possible, like the types of products that your customers are really interested in. Mature website software will track users and the products they look at. Eventually you'll have real data to show what types of products you should be stocking and which products won't sell.

The past twenty-five years of website development have revealed some interesting way to provide customers service, and the ideas will keep evolving in ways we can't imagine. Many websites already have live chat features and automatic emails that send to users who didn't complete their checkout process with a reminder to come back and finish their purchase.

Closing Thoughts


As a website engineer and business coach, I find that new ideas often emerge once a website system is implemented and the business owner sees what is possible. So much is already possible at much lower costs than ever before because so many systems already exist.

The barrier to business advancement using the internet isn't the cost anymore; the barrier is with unwillingness to change.




AT: 09/01/2017 11:27:11 AM   LINK TO THIS GOLD NUGGET
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