I am often asked what a business can do to leverage the Internet for additional revenue. As we all know, e-commerce is for real. Both businesses and consumers are increasingly shopping online. The question is how do you motivate potential customers to shop online rather than researching online and then go buy it at the local store:
1. While companies have been able to sell a wide range of products online, a rule of thumb is that if they can find at a brick-and-mortar store, it is hard to sell it online even if the shipping is free. I would never buy lawn fertilizer online. I don’t mind an occasional trip to Home Depot.
2. Focus on those products that people cannot find in the brick-and-mortar world. For example rare products (books, movies, antiques, etc.), stuff not available in certain geographic areas (certain stores are just not there or malls are too far), things that are difficult to buy in a store (adult products, men buying personal gifts for their sweethearts, etc.), and used products (the success of Ebay says it all).
3. Make it a lifestyle. Think Netflix. A trip to Blockbuster is not something that most people minded but Netflix is not just about renting movies; it is a whole different lifestyle for some people.
4. Higher value. We Americans rarely pass an opportunity to save some money. If you have a business model that has a more competitive cost structure, then pass on the savings to your customers and see your online sales go up. If you can deliver lawn fertilizer at my doorstep at a lower cost than the local Home Depot, I will buy it.
5. Convenience. And in nine out of ten cases, we are willing to pay for it. Look at all the services that have been successful: online bill payment, online banking, automatic refills of prescription orders, etc. If you can make our life better by giving us some extra time or less hassle, we will do business with you.
1. While companies have been able to sell a wide range of products online, a rule of thumb is that if they can find at a brick-and-mortar store, it is hard to sell it online even if the shipping is free. I would never buy lawn fertilizer online. I don’t mind an occasional trip to Home Depot.
2. Focus on those products that people cannot find in the brick-and-mortar world. For example rare products (books, movies, antiques, etc.), stuff not available in certain geographic areas (certain stores are just not there or malls are too far), things that are difficult to buy in a store (adult products, men buying personal gifts for their sweethearts, etc.), and used products (the success of Ebay says it all).
3. Make it a lifestyle. Think Netflix. A trip to Blockbuster is not something that most people minded but Netflix is not just about renting movies; it is a whole different lifestyle for some people.
4. Higher value. We Americans rarely pass an opportunity to save some money. If you have a business model that has a more competitive cost structure, then pass on the savings to your customers and see your online sales go up. If you can deliver lawn fertilizer at my doorstep at a lower cost than the local Home Depot, I will buy it.
5. Convenience. And in nine out of ten cases, we are willing to pay for it. Look at all the services that have been successful: online bill payment, online banking, automatic refills of prescription orders, etc. If you can make our life better by giving us some extra time or less hassle, we will do business with you.