SBA

e-Commerce 4 U ?

The Isle of Man economy is in the back of the Postman’s van. Yes, seriously, we are shopping more and more online for books, clothes, gadgets, toys, even frozen foods, the catalogue of retail goods arriving on the island from the UK by post or courier is constantly growing.

And with it sections of our own retail economy are going down the pan. Why? And what can we do about it?

Obviously price is a factor, some people will go to great efforts to seek out the lowest price, but for most the boom in Internet shopping is about choice, convenience and reliability. Why drive from Port Erin or Ramsey to Douglas to search out something which may or may not be in the shops when you can order exactly the right product online in a few minutes and be confident of delivery in a few days? The reality is that as long as the price is in the ballpark of acceptable, not in excess of other reputable suppliers the majority of Internet shoppers will choose their supplier based on perceptions of supplier reliability and customer service, which means that familiar and accessible suppliers have a real advantage.

That’s right, a shop in St. Johns or Ramsey has the advantage over a UK based supplier even for Internet shopping on island - if the customer is confident that they can supply the desired product as conveniently.

Part of the answer for the Isle of Man’s retail economy is to develop effective online shopping. Whilst being local is not sufficient to overcome the convenience of shopping online, being a retailer who the customer can easily phone or visit if the goods are not right is a definite plus, and for many shoppers loyalty to the local economy will sway their decision making - if they can be confident that a local retailer has what they want at a fair price.

Local shops need Internet presence to compete. They need e-shops / e-Commerce even to serve the customer living a few miles away, because for many of us getting in the car to speculatively search the shops for the right thing is a hassle.

Nothing new there, I’m sure many of our local retailers could have written the paragraphs above, so why don’t more local retailers have e-shops? To be honest some do, albeit with varying quality. Some don’t list all the products they sell, some don’t provide any indication as to whether the goods offered are in-stock or will have to be ordered in at considerable delay, some don’t provide the ability to pay online - the e-Commerce websites of many small retailers in the UK and here fail to inspire the confidence needed to persuade the customer to commit.

Small retailers’ shopping websites need to be as sophisticated as the large e-tailers, they need to show all the products, their prices, current availability and delivery times, and provide convenient online payment options; if they don’t then customers will look elsewhere.

Surely therein lies the problem. How can a small retailer afford the sophistication of a large e-tailer? Isn’t the IT massively expensive? The simple answer is no, it doesn’t have to be expensive. Some e-tailers spend a fortune on their e-commerce systems, but many of the most successful use off the shelf low-cost packages, even free open source. The Magento e-Commerce system for example is available in free and paid editions. The paid-for Enterprise edition will cost upwards of £1,200 per month, but is suitable for the largest of e-commerce operators and is used by some of the biggest names in Internet shopping. The open source edition is free, and wholly suitable for small and medium sized retailers to build online shops with sales, stock control and payment features which match the best anywhere. For multi-brand retailers a single open-source Magento installation will operate multiple individually branded and priced webshops offering the same stock or with individual catalogues per shop. Obviously you need to pay for the hosting of the website, but hosting for Magento starts from less than £5 per month.

Magento is not the only solution; Open Cart, PrestaShop, Zen Cart, os Cart and a host of other free or very low cost e-Commerce systems are available, and despite their low cost they power serious long-established Internet retailers - basically the technology to create online shops is commoditised and very cheap. Deploying these e-Commerce systems does however require work, they have to be customised to the retailers branding, terms and conditions, and payment methods, and of course all the stock has to be described and pictures sourced or taken - there is a lot to do up front before an e-shop can open for business and some retailers will need to buy outside assistance, but it is not necessarily expensive.

There is also the need to change business practices, particularly stock control and mail-order fulfilment. The Internet shopper, as mentioned above, expects the goods to be in stock, and to be promptly despatched. This means that some shops moving into e-tailing will need to change their inventory control process, either to track over the counter sales real-time or to hold a separate stock for online shopping, but either method can be made to work well at little cost. And obviously a daily visit to the Post Office or a courier collection will need to be arranged.

Basically, aside from setting up the e-commerce system in the first place, the barriers to entry into Internet retailing are not high or necessarily expensive, and given the continued growth in Internet shopping the answer for traditional retailers is very likely “if you can’t beat them, join them”.

Once a shop is online the next problem is being found by consumers, and here a central Isle of Man e-Commerce portal would be invaluable. I think it’s fair to say that ShopIoM has not been a runaway success, and the primary reason for that is its failure to address the choice, convenience and reliability test mentioned earlier. What the Isle of Man really needs to support local e-Commerce is a central catalogue, not unlike Amazon, which knows what goods local retailers offer and provides a one-stop shop window. That too could be achieved, Magento and some of the other low cost e-Commerce systems are capable of operating thousands of shops in the same site so it would be entirely possible for someone to create a central e-Commerce portal for all island retailers to opt into. I’d be tempted to do it myself if I had the time and money, it would be quite a large project but quite possibly the saviour of Manx retailing.

However the absence of a central portal is not a barrier, using a reputable e-Commerce package and sensible keywords will enable retailers to be found. Google likes online shopping catalogues and more local adoption of e-Commerce would enable some local retailers to not only compensate for sales currently lost to the Internet but also to become effective exporters themselves.