Practical Ecommerce

Successful Retailers Operate in 3 Businesses

Online retailers, particularly mid-market and larger, are really in three businesses: selling products to consumers; software; and publishing.

Retail commerce has become the convergence of in-store and online shopping. Regardless of a particular merchant’s business model — be it online-only or brick-and-click — that merchant competes for customers across channels.

Mid-market or larger retail business are really in three business: retail, software, and publishing. For most, it is not possible to keep growing without embracing all three businesses.

Mid-market and larger retailers are really in three business: retail, software, and publishing. For most, it is not possible to keep growing without embracing all three businesses.

The Seamless Retail Business

Seamless retail — what many call omnichannel retail — is the concept of selling consumers the specific products they want or need when they want them, where they want them, and how they want them — all with a consistent shopping experience.

For a pure-play ecommerce merchant, seamless retail might mean offering subscriptions, delivering products to lockers, or working with carriers to allow customers to change the delivery destination at the last moment from home to work.

Brick-and-click retailers might include click-and-collect, wherein shoppers place an order online and then pick it up at a store or product locker as part of their omnichannel or seamless strategy.

A successful retailer is good at, well, retail. It has a selection of products that are priced properly and in stock when a consumer wants to buy. It excels at shipping, customer service, returns, and marketing.

The Software Business

Ecommerce and even brick-and-mortar retail has a low barrier to entry. An entrepreneur can start a drop shipping business using a SaaS ecommerce platform in a matter of hours.

As a retail business grows, however, its software demands will grow too. Inventory, which at a small business can be managed by manually typing quantities into an ecommerce platform, becomes much more complicated when you sell in multiple channels, like Amazon or a physical store, and when you need to track not just on-hand inventory, but all inventory in multiple warehouses or on order from your company’s suppliers.

Consider the addition of accounting software or the need to use the electronic-data-interchange format to place orders with your suppliers. How will these new software needs be integrated? Who will maintain them?

How is the company storing human resource information? Who is managing the payroll or benefits software? What software is the marketing department using? How does that marketing software integrate with the ecommerce platform or the physical point of sale?

As retail businesses reach the mid-market, those stores almost always need in-house development capabilities either to manage software integrations or to offset the relatively high cost of some software solutions.

This should not be a halfhearted effort. Mid-market ecommerce businesses specifically, and mid-market retailers generally, should embrace software development. This means hiring the proper personnel and investing in the proper tools.

For example, for product information management systems — PIM — and ecommerce platforms, a NoSQL database may be a significant competitive advantage. Does your retail business have the expertise to understand why that may be the case? Or even establish opinions of its own?

To be successful, retailers need to be in the software business, too.

The Publishing Business

I recently attended a conference for the marketing leaders from about 20 mid-market brick-and-click retailers representing billions of dollars in annual sales between them.

A distributing company, which all of these retail chains are members of, hosted the conference and developed the sessions and exercises.

During one of the sessions, these marketing leaders were divided into four groups. Each group was given a very detailed, four-page customer persona. The customer personas ranged from loyal fans to folks who might never have heard of a particular retailer.

The facilitator asked these seasoned professionals, many of whom had more than 15 or 20 years of retail marketing experience, to work in their group to develop a single marketing campaign — the best campaign possible to engage and attract their particular customer based on the persona they had been given.

All four groups picked some form of content marketing. The specifics of these content marketing campaigns differed as the customer personas differed, but, given just one campaign to reach a customer group, every one of these retail-marketing leaders believed content marketing would work best.

Thus if you sell products at retail, you probably need to be in the publishing business, too.

To be successful, you must understand that content marketing is a relatively long game. You need to invest over time and build an audience for your content. Focus on providing your audience with real value.

Your retail business will also need to invest, either in-house or contract, in editors, copywriters, photographers, and videographers. And, according to the founder of the Content Marketing Institute, Joe Pulizzi, you need one more thing that media companies have: an editorial mission.

This mission is the specific plan for your content marketing. It defines your customer. It describes how your content addresses your customers, and it explains how your customer will benefit from your content.

Want to be a successful ecommerce retailer? Be a publisher, too.

Armando Roggio

Armando Roggio

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  1. Patrick Kuehn June 15, 2017 Reply

    great article Armando, even larger retailers can lose sight of how important these areas are for their business

    • Armando Roggio June 15, 2017 Reply

      Thanks. Yes. In fact, this is often the theme when I consult with retail businesses, some of which are relatively large. Particularly, when I talk to brick-and-mortar businesses trying to get started or grow online.

  2. Carlos Rivera June 15, 2017 Reply

    Sage advice. I, too, have seen this transition occur before our very eyes. This field (retail commerce ) moves incredibly fast!

    • Armando Roggio June 15, 2017 Reply

      So right, Carlos.