Investing in an Online Shop… for Which ROI?

Opening an online shop is opening a 2nd store

If you are a store manager, you are know the heavy investment in opening a physical store:

  • the initial costs for starting a business, amounting several hundreds of thousands of dollars
  • the monthly rent, increasing year on year (especially if the neighborhood is gentrifying)
  • the general maintenance, including cleaning, furnitures and decoration to rotate on a regular basis
  • fees related to your staff onsite

An online shop is the virtual copy of your current shop with lower start up costs comparatively. The online store will have the benefits of being open 24h/24, requiring few strict maintenance costs and few employees to dedicate (beside the expeditions management) and will be exhibited to the largest communication channel: Internet. Therefore, the return on investment of an online shop will inherently be faster.

Investing or not investing,… at what price?

1st scenario — Not investing at all.

Jacques Nantel made a deep impression during his conference given at the CQCD annual fair, warning retailers about the urgency to migrate to the Web: “The cost of doing nothing is higher than the cost of change.

Why doing nothing would be more expensive? There are several risks not to under-estimate:

  1. The purchasing behavior is changing: instead of searching in the yellow pages, the customers visit Google Maps to identify a shop.
  2. This Internet users searching online won’t find you.
  3. The way is given to your competitors who will eat your market shares on this segment progressively.

2nd scenario — Investing a little… but not much.

Following the cost of doing nothing, there is the cost of not investing enough. The temptation of spending just a little and selecting the cheapest provider can actually lead to further complications post-factum…

Indeed, the additional cost of “recovery” is predictable, equaling or exceeding the price of an online shop that could seem more expansive but better designed upstream!

At CleverToday, we noticed these 7 recurrent issues:

  1. The design is not adapted to a navigation leading to a purchase:
    You don’t produce a design or an ergonomic “by chance” or for pure esthetics. There are very specific goals that define a converting design or a good navigation flow; this requires analysis, hypothesis and tests by the Web experts.
  2. The SEO is not optimized properly:
    The source code of a website is not written to be scanned properly by the search engine robots and doesn’t rank the website at its highest potential on the search results.
  3. The optimization to mobile devices is not sufficient or not existing:
    A website that would not be mobile adapted is more and more excluded from the searches typed via smartphones or tablets because Google considers that the website is not aimed at this type of Internet users.
  4. The maintenance is restricting:
    Some technical choices are more budget or time-consuming after the website release and can even create security gaps.
  5. The navigation is unusually slow: 
    The slow loading of a website is often due to incorrect technical choices and push the online user to quit. It only takes 0,5 second to the brain to know if a website is appealing and less than 6 seconds of slowdown to feel impatient.
  6. The tracking system is partial or insufficiently detailed:
    How can you know the real cost-effectiveness of a shop without a good tracking of your traffic?
    Despite the basic tracking (unique visitors, visits and pages viewed) and the e-commerce tracking (final purchase), you must be able to combine these 2 methods to make sure of the most profitable source or the less costly one, the right settings for the conversion funnels, the blocking stages during the purchasing process and the life cycle of your customers and their online behaviors.
  7. The platform is a free turnkey solution:
    The cons of these “free” platforms are that design and SEO customization are generally not possible and hidden costs can be revealed post-factum.

3rd scenario — Investing cleverly.

Still to quote Jacques Nantel from his interview with Argent, the retailer should have a healthy balance sheet and the financial capacity to invest at least 10% or 12% of its annual sales to reach market shares on the e-commerce.

Any investor expects a profit. Therefore, how can you warrantee that your online shop will leverage your sales? To maximize your chances of success, here is what you need:

  • A functional, fast, mobile and maintainable website
  • The right tracking tools and settings to measure your ROI clearly
  • Some patience to observe the 1st results if they are not imminent and act accordingly
  • A minimum investment to communicate and create visibility to your shop
  • Some calculations upstream to warrantee that the online sale is not more expansive than the product itself: a 10$ product sold online can be hardly profitable with transaction and delivery fees if the selling process is not well managed.
  • Some external experts advising you on the best practices.

Willing to launch your online shop? Contact us for any inquiry related to your project or your budget!