E-COMMERCE, A VERTIGINOUS GROWTH
E-commerce is a channel that has had explosive growth – in all countries. And the past two years of Covid have contributed a strong push with the pandemic accelerating this change in buying patterns.
In reality, e-commerce has been slowing down in recent months. People moved out of their homes and started shopping in traditional shops again. But I don’t think it can be said that we are facing the winter of e-commerce, as some say. E-commerce is a very important sales channel.
Attention: we are talking about both B2C and B2B. When, on the other hand, there is a widespread opinion that e-commerce is an important channel only for consumer products.
BANISHMENT TO IMPROVISATION – THE NECESSARY SKILLS
Unfortunately, small and medium-sized enterprises approach e-commerce with little awareness of the complexities that this channel presents. Many believe that once the articles are posted on the portal, the bulk of the work is done. In reality, it has only just begun.
Skills, investments and patience are needed. We cannot leave it alone just because there are ICE (the Italian anagram for the National Institute for Foreign Trade) contributions. Here is a list of the skills you need (and which are often not present in the company), especially when you want to tackle foreign markets with e-commerce:
1. Knowing how to develop a clear strategy (first of all: which markets) and consequently a sustainable budget for the size of the company.
2. Then the choice of infrastructure (in the case of an own e-commerce site) or in any case the ability to evaluate the different platforms or marketplaces on the market.
3. Knowing how to automate the billing and warehouse management processes; the latter is a crucial aspect (what is sold online must be updated in our warehouse in real time).
4. Then decide how to manage the shipments; whether on your own or entrusting them to third parties (i.e. with the so-called drop shipping method).
5. Linguistic and cultural expertise (especially when it comes to products aimed at the consumer).
6. Currency, customs and tax knowledge of the various countries; this matter is constantly evolving and therefore it is necessary to be constantly informed about changes.
7. Merchandising skills in the daily management of your online showcase (to increase the so-called conversions).
8. Finally, the ability to manage online advertising. Even the best business ideas flop if you can’t bring enough traffic to your e-commerce site (and here you also need skills in managing social networks).
In other words, we must realize that an investment must be made – which will surely have a return – but with times that must be estimated so as not to run out of gas halfway through the journey.
These skills can also be found outside the company; we don’t have to hire dedicated staff! But it is also necessary to have the skills to choose the right professionals.
For example: a goldsmith business that invoices €5 million per year and started selling on Amazon in 2016, today has a turnover of €1 million on this platform. This year it will start its own e-commerce site dedicated to a different market segment. They are very satisfied with the path they have taken, while acknowledging that they have had to make investments that they had not foreseen.
PRICE MANAGEMENT
It is also important to pay attention to this aspect, which risks having a disruptive effect on existing sales channels (distributors and historical customers of the company).
When you are online, your prices are visible to the world and can cause an earthquake to: distributors, agents and customers; which almost certainly have different prices, usually higher. The pricing policy on e-commerce must therefore be carefully taken care of unless you sell different products online (or with other brands) than those currently sold on the market through traditional channels.
CONCLUSIONS
A well-known online shopping site wrote a few days ago “with our store your customers can shop 24 hours a day and you can sleep in the hot summer nights”.
In fact, this is the image that many have but the reality is quite different. E-commerce is a channel with enormous opportunities, but don’t believe that everything is easy or that a state contribution is enough to successfully launch this sales method.
Those who have decided to invest with a clear strategy and with sufficient resources have achieved excellent results. On the other hand, those who have “tried” without the awareness that it is an investment, have not obtained the expected results and have returned to the traditional activity of trade fairs and traditional distribution.
This is the seventh article on the topic of Exporting with digital tools. The topics dealt with to date are: