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What You Need to Know to Set Up an Online Store

Jul 8, 2020 4:12:00 PM

According to Statista, the revenue of e-commerce in the Philippines is already valued at more than Php 170 billion in 2020. In addition, the growth rate is predicted to be at least 18%. This means that by 2024, the market volume will already reach Php 335 billion. Meanwhile, the penetration rate is pegged at 35.5% in 2020 and is expected to rise to more than 46% by 2024. On the other hand, the current average revenue per user (ARPU) is Php 4,000.

These numbers are certainly encouraging, although the COVID-19 pandemic may have an effect on this level of growth. Still, with the implementation of physical distancing as a primary measure to prevent the spread of disease, more Filipinos may be encouraged to shop online. The so-called “new normal” may also further push e-commerce to the forefront, evening out or even outpacing the negative impact of the pandemic.

Of course, you have to start early and take this opportunity to set up your own online store. You might find the shift a little challenging, especially if you already have an established business with little to no online presence. Still, it’s not impossible or overly difficult. With just a few pointers, you can successfully set up your very own online store. Here are a few important points to get you started:

You Need New People to Manage Your Online Store

With a traditional brick-and-mortar shop, operations halt when the store hours are over and then resume the next day. With an online store, operations are essentially 24/7, which means orders can come in at any time. You can, of course, impose window hours for processing but then you’ll also need to think of the process of packing and shipping the orders.

In short, you need to hire new people to manage your online store. At the very least, you need someone to handle inventory, shipping, and accounting. Ideally, there should also be a dedicated person handling customer service and your marketing. Make sure to provide your people with ample training, especially with regards to the various online tools you’ll be using. You may consider reassigning your existing personnel to online store duties, but make sure that you don’t leave your brick-and-mortar store short-staffed.

You Need Flexible Payment Options

One of the biggest selling points of online shopping, whether in the Philippines or in other countries, is convenience. That’s why you need to offer a variety of payment options for your customers so that there will be minimal or zero friction upon checkout. Cash on delivery is definitely popular, but you should also consider adding online payment options like PayMaya Enterprise online checkout. Through this payment system, you can connect with more customers and accept credit and debit cards, as well as prepaid and wallet accounts. With the help of PayMaya Enterprise, you also ensure the security of each and every transaction that happens on your site or app.

You should also allow your customers to create an account and save their profile and preferences or settings for future transactions. This further minimizes friction and creates a more seamless shopping experience. Moreover, you’ll gather richer, more actionable data if your customers have their own accounts. Reward customers who create an account by offering discounts and exclusive promos to encourage more sign-ups.

You May Need to Adjust Online Pricing

Aside from payment methods, you also need to think of how you’re going to price your online offerings. You have two primary options, with the first one being to apply the same price (self-matching) for offline and online or adjust the price online. Self-matching is a common practice, although it might not be too attractive to consumers—especially since they also have to pay for shipping fees. Lowering online prices is certainly viable, but you have to be careful about setting the prices too low and risk low profitability.

Another common practice in online stores is price matching, where you offer similar or slightly lower prices than others. This can help boost competition and even give you valuable insight into what makes your products (and the competitors’ products) work.

You Need a Website

To set up an online store, you obviously need to have an online platform with which to sell your wares. You may already have a website for your business, which is definitely an advantage. However, it may not be optimized for e-commerce. Make the necessary changes, especially when it comes to design, and ensure it’s easy to navigate. From here, the easiest way to start your online store is to use a checkout plug-in. The most popular ones are Shopify, Magento, and WooCommerce (which are also partners of PayMaya Enterprise). You can also create your own e-commerce tools if you prefer, but this will take considerably more time and resources. By using established platforms, not only will you be able to launch your online store faster, but you’ll also be able to make use of powerful marketing tools.

Building a presence in online marketplaces and social media sites can also be advantageous, especially when it comes to giving you more exposure. However, it’s still ultimately better to have your own website. This way, you’ll have access to more accurate data, and you’ll also have more freedom to do what you want to do.

You May Need to Transition on a Per-Phase Basis

You might be tempted to offer all your products online the moment you launch your e-commerce site. However, this isn’t generally a good idea, especially if you have an extensive inventory. Remember that while you might have ample experience handling offline or traditional sales, you’ll be a complete newbie in the online space. And since you’ll inevitably be undergoing a transition period and learning curve, it’s best to have a smaller initial inventory.

How do you determine which ones to put up online first? Consider their popularity. Your offline best sellers will also likely be your online best sellers. Indeed, they might even perform better online since you’ll be increasing their exposure. Another great candidate would be those products with high customer longevity. Check your data and see which of your offerings get bought over and over again, and then put those online.

This strategy of starting with a few initial products is also applicable to those who are starting from scratch. By phasing the release of your offerings, you’ll be able to give customers something to look forward to. Additionally, it might also help to study your market, especially with regards to their purchasing power and frequency. This way, you can create a feasible launch plan and maximize your profits.

You Need to Consider Various Delivery Methods

Another primary concern of online stores is order delivery. Obviously, you need to decide on your preferred courier partner. You need to consider the company’s reliability and reach, especially if you’re going to deliver nationwide or even internationally. You should also decide if you’re going to offer same-day shipping. This is a big plus for customers who are all about instant gratification, even if you charge a premium fee. If or when you do, you need to ensure that you’ll be able to deliver on the promise. There’s nothing more frustrating for a customer than to expect for a purchase to be delivered and then be told that it will be sent the next day.

Another delivery method you might want to explore is store pick-up. This option is advantageous for you because both you and your customers will be spending less on shipping. It also adds a bit of control on the side of the customer, since they can decide when it’s most convenient for them to pick up their purchases. Just make sure that you set certain rules, such as a two-week holding period or something similar.

You Should Explore Various Advertising Channels

Social media sites are among the best and most powerful ways to connect with both existing and potential customers. In the Philippines, Facebook remains the platform of choice of 44 million Filipinos. This number is expected to blow up to as many as 49.9 million come 2023. Nevertheless, don’t just set your sights on Facebook and it’s (admittedly impressive) numbers. There are also other social media platforms—particularly Twitter and Instagram—on which you can advertise your new online store. Make sure to study best practices to maximize the effectiveness of your materials. More importantly, use analytics tools to make sense of the volumes of data you’ll be getting from your posts and ads.

Make sure to also place posters and other advertising materials on your physical store. If you want, you can add sticker labels to the products on the shelves with a QR code that leads to the online store. Include flyers with coupons or promo codes for when your online store opens. This will help encourage people to shop online or at least make that initial visit.

You Need to Monitor Your Progress

When you set up an online store, you need to keep track of various metrics to monitor your progress. Some of the things you need to keep track of are largely the same as those you record with your physical store: total sales, individual product sales, and daily sales.

Aside from sales figures, however, you also need to monitor page visits, the time spent on each page, and the number of abandoned shopping carts, among many others. You should also note the differences in your offline and online sales. As earlier mentioned, it’s possible that your offline best sellers could also be your online best sellers. Nevertheless, the opposite can as easily prove to be true. This information can help you tweak your promotions and other activities. Indeed, with the help of data, you can gain insights on how you can better engage your customers.

You Need to Think of Added Value

Making sales is not the end-all, be-all of setting up an online store. Indeed, you have to give your customers more than just the products they love. You have to give them more value to cultivate their loyalty. One such way to do this is to run a blog to share educational and engaging content. Another benefit of having an on-site blog is increased traffic and possible improvements in SEO rankings. Helpful content can also encourage longer site visits, added clicks to product pages, and more completed transactions.

You may also consider vlogging or making how-to videos of your own products. With product demonstrations, your customers can more easily appreciate the benefits. In turn, customers may be more easily convinced to buy.

You Need to Think About the Long Term

When you set up an online store, you need to have a concrete long-term plan. One thing that you should definitely think about is whether to completely transition to e-commerce or maintain both your offline and online stores. There are certain benefits to both. For example, going completely online means you get rid of a lot of overhead costs. However, having a physical store means providing your customers with multiple purchase channels. Remember that while millions of Filipinos already have access to the internet, not everyone can shop online or prefers doing so. Giving up your physical store may also mean laying off some employees, so think about it carefully and have a clear plan moving forward.

Another thing you must consider is online expansion and retention. Are you going to focus on vertical or horizontal growth? Will you be collaborating with other brands or perhaps launching online exclusives to drive interest? How are you planning to attract new customers? What kind of loyalty program will you be using? Are you open to working with social media influencers? These questions are just a few things you should include and answer in your long-term business plan.

What you have to remember about setting up an online store is that it takes time for it to truly “take off.” Your usual customers may still prefer shopping in a physical store. New customers, on the other hand, may take a little more time to find your new online storefront.

You should also expect to encounter a few birthing pains, such as delays in shipments or a high shopping cart abandonment rate. Don’t let these discourage you. Instead, focus on continuous improvement. Learn how to appreciate data and how you can leverage it to improve your online store. Good luck!

References:

https://ksubaka.com/retail-offline-to-online-o2o-how-to-tackle-the-challenge/
https://www.bigcommerce.com/ecommerce-answers/o2o-commerce/
https://www.statista.com/outlook/243/123/ecommerce/philippines#market-arpu
https://www.forbes.com/sites/hbsworkingknowledge/2018/06/07/should-retailers-match-their-own-prices-online-and-in-stores/#59e3c8db9a3b
https://www.shopify.com/blog/ecommerce-business-blueprint
https://blog.boldcommerce.com/how-to-start-an-online-store
https://www.sellbrite.com/blog/create-a-successful-online-store/
https://www.wpbeginner.com/wp-tutorials/how-to-start-an-online-store/
https://www.statista.com/statistics/490455/number-of-philippines-facebook-users/

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