Retailers head back to the Internet

Moving business back online

Goodbye Point of Sale

Technology companies,have been extolling the virtues of the online channel for at least as decade, and most retail businesses that can sell over the internet do – no matter what their size. But, it's only in the last five years that we've seen a dramatic growth in online sales – especially around major retail events like Christmas.

We saw some startling figures In the run-up to last Christmas, with almost 20 per cent of non-food items bought online in December, according to a report by the British Retail Consortium and KPMG. This represented a 19.2 per cent growth in internet purchases from a year earlier, the fastest increase in four years.

Pins and Ribbons

A great example of the growth in the online channel is John Lewis. Over the Christmas period, it reported a year-on-year increase of 22.6 per cent for online sales, which now account for about a third of its total sales. That's all well and good for a department store of the size of John Lewis, but it's also true for much smaller businesses that get their online sales right.

I was recently talking to one of our BT Business Champions, Kerrie Murray, who runs Pins & Ribbons – a specialist interior furnishing maker and supplier based in the north east of England. Last Christmas, she saw an amazing uplift of 39 per cent in pre-Christmas online sales over the previous year.

Interestingly, Kerrie had taken the decision to close her high street presence and focus on growing the business online late last year. This was entirely based on the fact that the shop was the least profitable part of the business, but took up the majority of her time.

Having started the business from her kitchen table, selling via various online channels, she thought that the ultimate goal for the business was to open a physical shop. Whilst it added to brand awareness locally, the majority of her trade continued to come via the web – even from people living in the area.

Getting the balance right

In what was almost the reversal of how people perceived a website ten years ago, the shop became a 'brochure' for the products that were available online. Often people would come in to check out a product and then go away and order it online where there was a wider range of options. I've heard this termed 'robo-shopping' – research offline, buy online – and it's happening more and more. As a result, businesses need to get the right balance of channels and understand what the correct mix looks like to them, rather than looking towards traditional models for reference.

The online channel has changed the way people buy and think about purchases, so businesses of all sizes need to understand both how it can impact them and also how to use it to their advantage.
As Pins & Ribbons did, getting the correct balance between channels and focusing on those that can help increase sales and growth in your business, is critical – especially as the online channel is predicted to grow and evolve in 2014 even more rapidly than last year.

  • Danny Longbottom is managing director UK SME for BT Business, Responsible for the SME market in the UK.

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