Starting an online store of your own might be something you’ve seriously considered. If there’s one thing businesses can learn from the past year, it’s that the future of sales is digital.
This fact is made more evident by the accelerated industrial digitization during the pandemic, revolutionizing legacy industries and causing a drastic shift in consumer behavior. According to a survey conducted by UNCTAD, online shopping increased by 6% to 10% across most product categories. The uptick was particularly noticeable in health, medical, and hygiene products.
The retail industry has been no different. eCommerce sales exceeded 4.2 trillion U.S. dollars in the United States alone. Over 2 billion people purchased goods through online platforms. That’s the highest annual growth that the eCommerce market has seen in almost two decades.
As the number of online buyers continues to increase significantly, starting an online store looks like a feasible business idea. However, starting your own eCommerce website is easier said than done. If you are considering starting an online store, here are five things you need to consider before you begin.
1. Identify emerging streams driven by consumer behavior.
Before starting your online store, you should conduct considerable research on consumer behaviors. From the studies conducted on the changing consumer behaviors, we can see the following trends:
- A greater concern for sustainability: Research by Deloitte shows that Millennials and Gen-Z prefer brands and businesses that prioritize environmental sustainability. The pandemic has specifically reinforced their desire to help communities and drive positive change.
- Lockdowns have forced consumers to shop online for almost everything, including food deliveries, groceries, and cleaning supplies.
- Increased demand for health awareness, as most people are opting for at-home care facilities and disease management.
- A rise in home-based leisure activities, as people deal with increased stress and uncertainty. According to research, the first three months of lockdown led to a surge in Netflix subscriptions, with almost 16 million people creating accounts on the platform.
- The uncertainty associated with the pandemic has made people realize the importance of value-based purchases. Given the price sensitivity in these times, value, convenience, and availability are the top drivers of consumer decisions.
Research those trends and use them when choosing your niche or when creating a successful marketing strategy for your new brand.
2. Determine Operational Costs
Before starting any business, it’s essential to evaluate the operational costs. This is the amount of money you’ll need to have to keep your store running efficiently once you launch. While your operational expenses will vary based on your store type, some of the most common costs to consider include:
- Website building and hosting – Unless you’re familiar with website building and development, you’ll need to hire an expert to create a customer-centric website. You’ll also be required to pay a monthly fee for hosting. If you decide to go with a third-party platform to sell your products, you’ll still need to factor in the monthly payments and associated fees.
- Utilities – While you may not need to cover the cost of utilities for a brick-and-mortar store, you will have to pay for electricity and internet services.
- Shipping – Initially, you may package and ship products directly to customers using your local postal service. However, as your business grows, you’ll need to consider more efficient options. Find the answers to questions like, “Who is the best shipping carrier?” and “What’s the difference between parcel shipping and freight shipping?” to determine your out-of-pocket costs.
- Staffing – If you plan on hiring (or outsourcing) business tasks, you’ll need to determine the average cost for professional services.
- Marketing – Although there are several free marketing solutions, getting your online store to stand out from the competition will require you to continually invest in marketing.
3. Build a brand name and register your online store.
comprehensive business strategy gives your business a robust foundation to stand on. First and foremost, though, you’ll have to build a brand name and register your store.
Certain legal and tax implications come with registering your store, so this is an important step. It is advisable to consult an attorney and an insurance agent. They can help you build a strategic business plan as you start your online store.
Many people often get confused about a business license for an online store and whether they’ll still need one in the absence of a physical store. A business license is the government’s approval that lets you trade from a specific location, whether you do it online or in-store. Every state or city has different laws and requirements for obtaining a business license. Your license will largely depend on your site, the kind of products you want to sell, your business needs, etc.
For an eCommerce store, you will also need a resale license that will make you eligible for a manufacturing discount. Without a resale license, you will likely have to pay the full price for all the products, which will be costly. Additionally, do adequate research on the sales tax applied in your city, country, or state, and get those approved before you start operating your store.
Lastly, do not forget to get product liability insurance issued to your products. For instance, in case your company gets sued for a faulty product, your product liability insurance can cover at least half the cost of the lawsuit.
4. Finalize your marketing strategy.
The coronavirus is not showing any signs of slowing down even with the availability of vaccines. Companies may have to adapt to lockdowns and other transitions now and in the future. To better navigate changing circumstances, organizations must recognize the crucial role of marketing in managing their business and connecting with consumers.
- Getting shopper insights and interacting with consumers at every point of their purchasing journey.
- Creating “purposeful” strategies revolving around current events and social issues happening worldwide, such as an economic recession.
- Having an in-house creative team to seek more flexibility, innovation, and control, at a lower cost.
With cutthroat competition across eCommerce niches, optimizing your marketing strategy is imperative to starting and sustaining your online store. However, the ideal plan will depend on your product, audience, costs, and more. Some of the emerging marketing trends that can be seen are:
Making Use of Email Marketing
If you already operate a brick-and-mortar store, use available customer information to create an email marketing strategy. This lets your buyers know that they can now buy from you via the internet. Email marketing is one of the most effective ways of communicating with customers, promoting your products, and boosting your brand’s engagement.
Inviting Your Customers to Sign Up for Exclusive Content
Make sure to offer an option to sign up for a newsletter so that customers can sign up for exclusive content, discounts, loyalty memberships, etc. Many eCommerce stores have a pop-up that prompts users to sign in for the newsletter in exchange for a 15% discount, free shipping, or similar incentive.
Optimizing Your Website for SEO
As you start your own online store, it will be incredibly helpful to enable search engine optimization (SEO) on your website. SEO makes your content more “discoverable” so that it shows up on search engine results pages (SERPs). For example, conduct research on how your target audience talks about your products. What keywords do they use to research similar topics? What do they expect from your brand? These questions can also give you clarity regarding the type of content to post on each page.
5. Tailor offerings to your target audience.
This is where you dig even deeper to understand your ideal shopper. Who are they? What do they like? How can you tailor both your product and your website experience to appeal to your perfect shopper?
Additionally, a good marketing strategy should also consider the market. The world has changed so unpredictably that it has forced marketers to rethink promotional strategies. For brands looking to adapt to changing market scenarios, creating target personas can be the key to establishing a proper connection.
To do that, you will need to conduct thorough research on target audience behavior. You can start by monitoring their interests to understand their preferences. Create your ideal buyer persona by conducting in-depth demographic and psychographic analyses. The more specific and detailed your buyer persona is, the easier it is to tailor strategies that can suit your target audience.
You can also identify your core audience preferences by studying your existing audience, tuning into buyer requirements, and observing your competition. Building detailed target personas ensures that you have a source of in-depth knowledge on your customers, followed by regular updates on changes in their behavior.
6. Choose the right eCommerce platform.
Think of any eCommerce platform as a home base for your online store. It should have all the essential features needed to run an online business, while also integrating common business tools that can optimize the functionality of your store.
As online retail technologies rise, open software as a service (SaaS) platforms like BigCommerce and headless eCommerce shopping experiences will provide the future of online shopping. “Headless” eCommerce means you can run the entirety of your business through a CMS platform with enhanced personalization and customization options.
With so many available options, you need to evaluate what each platform offers carefully. Ideally, you should be looking out for:
- web hosting and check plans and pricing for Magento hosting;
- payment gateway features;
- extensive app-store with pre-built integrations;
- PCI compliance;
- optimized UX experience;
- ability to sell an unlimited number of products.
Starting an Online Store Will Require Patience
While no one really knows what awaits us in the post-pandemic era, one thing is for sure. Consumer behavior has been forever affected. Online retailers have an unprecedented opportunity to use this development to their advantage.
It’s perfectly alright to learn as you go, too. Starting an online store ASAP can help you take advantage of the recent surge in buyers. Be aware, however, that you’ll have plenty of competition due to increased digitization. This makes basing all your business decisions, including expansion, on quality data and market trends an absolute imperative.
