In 2018, the B2C e-commerce market in Germany generated sales of around 53.3 billion euros, according to a study by the online portal Statista. According to the HDE forecast, this turnover will amount to 57.8 billion euros in 2019. In order to open up new markets and expand the customer base, your own online shop is now indispensable. This is because 78 percent of German consumers shop online at least once a month. This is the result of the recently published study “Global Consumer Insights Survey 2019” by the auditing and consulting firm PricewaterhouseCoopers. Dr. Kai Hudetz, Mittelstand 4.0-Kompetenzzentrum Handel, Managing Director IFH Cologne, explains what needs to be considered when setting up an online shop.

How to go about setting up an online store the right way?

Whether it makes sense to set up your own online shop depends on various factors. An online store is not the only option for being active on the net – especially for smaller companies platforms can be an attractive alternative because new online users can profit from the existing presence of the platform providers and save investments in their own infrastructure. Retailers who want to start with an online shop must first clarify the most important strategic questions. These include, but are not limited to: What are the unique selling points of the online shop? Who is the target group? Which products should be offered at which prices? And which services should be implemented? Based on the strategy, the operational steps must then of course be planned precisely. These range from the marketing plan and process plan through the exact design of the online shop with product data and images to the selection of service providers for logistics, payment procedures and the like.

E-Commerce is among the areas with the highest growth rates. This means that the competition is not asleep. How can you still position yourself well with your online shop?
If you want to be successful with a new online shop today, you have to be active in the right niche. Merely selling products is difficult. Rather, concepts that tell good stories have a chance – keyword storytelling. Today, nobody will be able to avoid the integration of social media in order to ideally address target groups. Verticalization is another way of positioning – the more unique the product, the greater the potential for differentiation.

Which factors need to be taken into account when using a domain?

The more memorable the better. Especially from a marketing point of view a descriptive name is of course helpful. In addition, the registration of alternative endings should not be forgotten – besides .de also .com and .net as well as alternative spellings should be used.

Often many shops already fail due to proper warehousing and bookkeeping. How can this be avoided? These are core competencies that have to be tackled professionally from the very beginning. Important here is to focus on providing solutions that are as scalable as possible and possibly grow with the company. It may be worthwhile to bring service providers for (sub)processes on board at an early stage.

How does the retailer know which shop system is suitable for him?

The strategy is also important here. In principle, however, cost-benefit considerations should of course play an important role. Transparent costs and the scalability of the system are further keywords. Standardized interfaces are also helpful. The selection should always be preceded by a precise needs analysis.

How important is an online shop structure? What should be considered?

The structure and user-friendliness of an online shop are very important today – simply because the demands of customers for clarity and user-friendliness are now very high. Good content in terms of texts and images is also often a decisive factor for success.

Which payment methods should retailers offer? How broad should the selection be?

The offered payment mix is very important. The ECC payment studies show again and again that customers do not buy if their preferred payment method is not offered. Payment by invoice and PayPal are currently the most popular online payment methods. Overall, the optimal mix – depending on the target group – consists of five to six options. This means that online shops should also make it possible to pay by credit card, prepayment, immediate payment or Amazon Payments, for instance.

Should the retailer have a basic knowledge of SEO, CSS, HTML and the like?

Yes, the basic knowledge of SEO and the like should at least be sufficiently developed so that the necessary service providers can be well briefed and selected in the relevant areas.

What information would the shop owner have to provide on his website?

The disclosure requirements relate to different areas. Retailers need to include – without any claims for completeness – information about the imprint, terms and conditions, binding delivery times as well as prices and shipping costs.

How important are product images for the online shop?

Images are extremely important for online shops – not least for the confidence of potential customers in the product on offer. Here too, however, the level of expectations is now very high. Images must be professional and show the product from different perspectives, for instance. Moving images or 3D animations are also becoming increasingly popular. Shipping often takes too long and as a result many online shops lose their customers.

What has to be considered when shipping?

Speed is indeed a relevant factor, transparency another. Customers like to receive the ordered goods quickly and above all want to know where the goods are currently at. It is also recommended that customers are given the option of choosing a shipping service provider. And: customers love the scheduled delivery. What do you think of the complete assumption of shipping costs on the part of the retailers? Of course, this is not a popular topic, but as with so many services, I think it is necessary as long as Amazon acts like this. Last but not least, the latest Amazon study of the IFH Köln „Gatekeeper Amazon“ has shown how strong the influence of the online giant on the level of expectations and the purchasing behavior of consumers is.

Which factors have to be considered in the returns industry?

Here, too, the following applies: the process must be professionally set up and efficiently designed. To reduce the number of returns as much as possible there are different levers. These include especially: better pictures and product information, faster delivery, bonus/malus systems. And the return process should be as simple as possible for the customers.

What should be offered in terms of customer satisfaction?

Customers should always be at the center of all considerations. In addition to the product itself, customer satisfaction also depends on the topics of the shipping and returns process, packaging and customer communication. Customers love to be addressed individually, for instance, or to receive small gifts in the parcels. Often a strength especially of smaller providers. The details make the difference. Small and medium-sized companies that want to deal with issues like these will find a neutral contact point as well as independent exchange partners in the Mittelstand 4.0-Kompetenzzentrum Handel.

What expectations can online retailers have for the year 2020?

Online sales will keep on rising in 2020. In addition, we will see further professionalization – beginner mistakes will be less and less forgiven by customers. Moreover, the importance of platforms will increase further. Anyone who is active in e-commerce will have to deal with other sales options via platforms in addition to their own online shop.

 

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Link: The Mittelstand 4.0-Kompetenzzentrum Berlin is the cross-industry contact point for small and medium-sized enterprises in Berlin, Brandenburg and throughout Germany.

Image: IFH Cologne

//JP