A SURPRISING trend has come to light as the internet continues to develop. Retailers that succeed online are rarely the same as the successful giants found on the high street. Conversely, in our city and town centres we visit familiar shops with long established brands whose digital presence are often significantly newer, smaller and – crucially – a lot more profitable.

Well over a decade ago when online shopping began in earnest, the vast majority of businesses at the forefront of their offline markets concentrated on where they were doing well, and perhaps failed to see the possibilities for the future. These days, when shopping for clothes on the high street, Top Shop and Marks & Spencer remain omnipresent, with an established footing in almost every city. But online, it’s ASOS.com and Net-A-Porter that shoppers prefer.

So why is it that Play.com and Amazon sit comfortably at the top of the ecommerce pile, enjoying huge market share, while Zavvi, which was formerly Virgin, went out of business in very quick time, and HMV’s foray into the online world in no way reflects its dominance of the high street?

The online and offline markets differ greatly. Many of these large, established, offline giants stumbled into the world of online retail assuming the transition would be simple. This has been far from the case. Offline businesses often have to push their message onto consumers and convince them of their need for such products, and convince them to visit stores in order to prove they are the best-placed supplier. The internet features a ready-made market and, so long as your business is at the top of the search engines for popular search terms, you can capture the individuals already interested in your offering.

In reality, it is often a lot less expensive and less risky to attract business via the web than it is in the physical world. Yet many firms really struggle to capture an online audience which is anywhere near as profitable as what they are used to. This is usually down to the adaptability and attitude of the management.

Not only are different skills needed to succeed in ecommerce, but a different attitude is key. Many offline businesses simply do not set themselves up to win online. Trying to transfer traditional customer service approaches and pricing onto the web just doesn’t work. While a consumer might be willing to pay more to browse around a department store and receive one-on-one service, more often than not, on the internet, they want lowest cost and quickest delivery. So long as your website looks reputable and you appear in the search engine results, or are well positioned within the social media networks, you will start carving up a share of the market.

The other factor holding these bricks and mortar organisations back is their ability to change direction quickly. Decision makers within the large retailers are often slower to adapt to new consumer trends, which simply doesn’t work in the digital world. This isn’t completely their fault as an online store can open a new department in a matter of days or even hours, but how long would it take for Marks & Spencer to open up a section of brand new products in just one of its stores? Whereas a 50% off sale can be orchestrated within hours and start impacting profits almost immediately online, a high street retailer has to plan such events well in advance and can’t produce the point of sale items and advertising campaigns in such a short timescale.

There is hope for the traditional retailers and a way they can fight back – by combining their offline brand power with the new online marketing strategies.

The advantage that offline retailers have over new internet start-ups is existing marketing budgets and recognisable brands. Where they fail is to put these two together in the same way as an online marketer would. If they were to fight their internet competitors on their own turf – the search engines – and price themselves more competitively they would be able to use their brand recognition to not only attract a far greater share of traffic, but also convert a lot more of it too. If this were to happen, then it wouldn’t take long for the lists of most popular internet retailers to start filling up with brands that we’ve recognised for decades.

Article originally published on WalesHome.org: http://waleshome.org/2010/06/why-do-high-street-giants-stumble-online/

The number of people in the world that use the internet has surpassed 1,000,000,000. According to Comscore, a company that tracks web usage, December 2008 was the first time that one billion internet users went online within a single month. It could be as soon as 2015 that this figure exceeds two billion.

There are a number of predictions regarding the implications that this growing user base has in store for businesses. It might be worth bearing these in mind when looking at your digital marketing strategy:

E-commerce will carry on growing. It typically takes people a few years from their first internet experience to when they are confident enough to start spending online. With this in mind sales are expected to more than double from where they currently stand, as more and more users start to shop online. Many of the early adopters thought nothing of spending money on websites, no matter how they looked or worked, but the same isn’t true of the new users. To take advantage of the whole user base an e-commerce site must be user friendly, approachable and built with the needs of technophobes in mind. 

User demographics will change. In the 90’s the main internet users were people already in the world of technology, often referred to as geeks, and eager to embrace the web.  This isn’t so true these days. The number of older people browsing the internet is in the hundreds of millions and quickly growing, as is the number of younger users, with digital media a part of the curriculum in many primary schools. Another change is in the education of surfers. People without higher education and IT qualifications are becoming heavy internet users, and as services such as broadband continue getting cheaper and more widely used this will continue.

International usage shifts. It is believed that by 2015 over 85% of internet users will be from outside the US. China and India, in particular, have seen huge growth, and this doesn’t show any signs of slowing. English will start to be used less and less and foreign money will become more readily available online. Businesses that have separate websites, or pages, that target and attract people in various countries will flourish, and international sites that don’t match what local sites offer will not retain the interest, or receive the money, of surfers in that locality.

It was only a decade or so ago that in order to present and sell your products to someone from the other side of the world would have cost huge amounts of time and money. These days though you only need to find out what people are looking for and make sure your website comes up the next time they search for it. With the minimum amount of cost and fuss, technology can take care of all the time, currency and language differences that have previously plagued international trade. With a few clever tools, your website can act as a 24 hour, international salesman.

The beauty of the internet, and the reason why so many businesses use it as their main marketing avenue, is that any company, including yours, has the ability to sell to this gigantic market. Just make sure that you take the needs of the second billion users into account when trying to win the first.