Starting any new business is hard, but starting an online retail business is particularly hard.
You see, this is one industry that combines technology, logistics and, of course, marketing – it’s a juggling act.
To help us crack this hard nut, we Anthill founder James Tuckerman sat down with CEO at Bookworld James Webber.
Bookworld is Australia’s largest bookstore with more than half a million customers (which is huge in the context of Australia’s market of 22 million).
He rebuilt and reinvented this business, which was decimated during the GFC, when it was associated with now defunct brands like Borders. In the process, he also helped save Australia’s oldest book retail brand Angus & Robertson, which is now part of Bookworld.
1. Find your point of difference
Just like any business, you must define what sets you apart, what you stand for.
If you don’t stand for something, you stand for nothing. (And you’ll fall for anything, right?) A point of difference gives you clarity and focus.
And how will you ever be noticed if you are trying to do exactly what everybody else is doing? When you stand for something, you also stand-out.
So when starting a new business, it’s extremely important to establish exactly what makes you different from your competitors and what your customer value proposition is.
James recommends an easy but effective model called the black hole of retail.
If you want to succeed in retail, you must stand for one of five things.
If you don’t stand out from the crowd, with respect to one or two of these things, you will drown in the sea of mediocrity and disappear into “the black hole of retail”.
SO WHAT ARE THESE 5 THINGS…
- The biggest. A brick and mortar example is Walmart and in e-commerce, Amazon. However, even if you’re not the biggest, don’t slack, you still need to have credible ranges.
- The cheapest. A brick and mortar example is Costco and for e-commerce, the various deal sites. Once again, even if you’re not the cheapest, you still have to be well priced.
- The quickest. Speed is really essential to online retail but in e-commerce, there is often a trade-off between price and speed of fulfilment and very rarely is the cheapest the quickest.
- The easiest. In the brick and mortar world, this is about being where your customers are as in the case of convenience stores. With e-commerce, it’s about making the whole user experience on your website as smooth and enjoyable as possible.
- The hottest. Now, this is the one only great brands achieve, something you have to build over time. It is about being the fashionable and the perpetual talk of the town, think Nike and Apple.
Take Action: What do you stand for? Choose one of the five above and be it. You need to be good at them all but you must be great at one.
2. It’s okay to be naive. But don’t be stupid
There’s nothing wrong with not knowing everything.
In fact, being naïve can give you the courage to do the things others don’t do because of what you don’t know. You are not restrained by the mental limitations of those with certain knowledge.
Only those who know about monsters are scared of the dark…
However, you can’t afford to be stupid.
You can’t afford to suffer paralysis by analysis either.
You need to trust your gut, especially if that gut of yours has a good track record.
James’ father once summed it all up so wisely when he told him, “Look before you leap but if you’re gonna leap don’t look too long.”
Take Action: Set yourself a great challenge, something you’d be uncomfortable sharing with small minded people. Have a vision, think big – not just how big you think you can be but actually how big you really want to be. What is that Big Audacious Goal?
3. Nurture and pamper your customers
Customers are very hard to win and, yet, they are so easy to lose.
So, once you have them, you need to nurture and pamper them – make them never want to leave you.
It’s easy to reel in a customer, make a sale and move on to try and get to the next one but keep in mind the cost of retaining customers is way less than the cost of getting new ones.
You should, therefore, pay more attention to metrics such as the lifetime value of a customer rather than just a single purchase. It has been found that even a little engagement goes a long way with customers in terms of how much they spend and how often they return.
Try to get people to invest just a little bit of their time engaging with you.
Time is the one thing we all have little of. So, if people make a decision to invest that time, no matter how little, with you when they don’t have to, that’s a big commitment that says a lot.
If you can get them to do that, you’re half way to having their loyalty – that’s one foot in the door.
Take Action: How can you find a fun and interesting a way to get a customer to invest a little bit of time engaging with you? Time leads to greater and greater commitments to your brand.
4. Automate, automate, automate
This is James’ version of the “Location, location location” mantra in brick and mortar retail.
E-commerce is about technology.
It’s how small players are able to play in the big leagues, without the massive bricks and mortar infrastructure.
So, stay abreast of the latest tech developments to make sure your business is always running at its most efficient. Automation equals efficiency. Automation equals freedom.
And here’s a great tip for SMEs: if you’re just a handful of people (not a team of, say, 20), keep a diary of how you spend your time. You’ll be surprised what you find. Many small business operators waste their time day in day out doing certain silly tasks that could easily be automated.
It takes a good deal of discipline to regularly take time out of daily routine to analyse your processes and look for where you can automate to save time but, the truth is, you must spend time to save time.
Automating is also essential if you plan to scale successfully. You can’t scale with the same processes you started out with, you will have to upgrade with some automation.
Take Action: Keep a diary of how you are spending your time and allocate an hour every week to learn something new. Remember: automation equals efficiency, freedom and scale.
5. Benchmark yourself against the best
You need to continually benchmark yourself against the best in your industry but your competitors will most likely not be eager to share their KPIs and statistics. So, unless you’re ready to engage in the dark art that is industrial espionage, you need another way to know where you stand.
One of the best ways is to enter industrial awards. This way, you can flex your muscles while observing how you compare with other players, including the big boys.
Most awards require a detailed submission. This might seem like a burden but it’s a good burden to bear because the process will force you to look critically at certain parts of your business.
If you win the award, yipee! Now you know where you stand and how you compare with others. Remember, we already talked about finding your points of difference?
Awards help with comparisons, they provide clarity and they are awesome when you win!
However, while it’s great to know where you stand, don’t get obsessed with competitors. Be obsessed with your customers (just keep an eye on your competitors objectively).
Take Action: Enter competitions and industry awards whenever you can.
A few more wise words…
One major issue in ecommerce is that it’s quite impersonal. Due to the physical distance between you and your customer, the transactions can lack that good old human touch we all love.
You can help your consumers put a face to your business with outdoor campaigns and pop-ups.
And the great part is that with the popularity of social media today, such events can be documented and shared with your online audience, this too can help make your online brand more personal.
Lastly, be passionate about what you do! Passion is the fuel that successful entrepreneurs burn.
Who is James Webber?
James Webber is the CEO at Bookworld, Australia’s largest bookstore with more than half a million customers which is huge in the context of Australia’s market of 22 million. He rebuilt and reinvented this business which was decimated during the GFC when it was associated with now defunct brands like Borders and also helped save Australia’s oldest book retail brand Angus & Robertson, which is now part of Bookworld.