Online sales channels as an adaptive tool in times of crisis
Over the past year, measures taken to address the pandemic by governments and health authorities have forced businesses and retailers to implement adaptation strategies that enable them to maintain their economic activity despite difficulties and constraints.
So, it is no coincidence that in recent months e-commerce has been one of the fastest growing sectors and that many companies have decided to change their sales strategy to start marketing their products and services digitally.
Unfortunately, selling online is not a strategy that can be adopted by all businesses, since viability and success depend on the type of product or service to be marketed, the intended audience and the available resources for developing a business on the Internet.
On the other hand, the virtual nature of internet business creates a false narrative that selling through a website requires less investment and fewer resources. The reality is that online commerce may require significant economic investment, a well-crafted logistics plan, qualified professionals who are responsible for designing and programming the online store, an effective marketing plan through digital and traditional channels, managing customer relationships and monitoring the correct delivery of products and services, in a store that operates 24 hours a day, 365 days a year.
What is clear is that to sell on the Internet you need a medium or channel that allows the commercialisation of your product or service online. In this sense there are several options whose characteristics and advantages we will explore below.
Online sales channels
The current offer of online sales channels is wide in breadth, so we will focus on what we currently consider to be the 3 most important channels to consider:
- Own website
- SaaS Platforms
Own website: control and scalability
Creating our own website is perhaps the first option we think when setting up an e-commerce business, but as we have seen above, there are other options. Your choice will depend on factors such as budget, the possibility to hire professionals who design and program the website, and the business plan or business strategy that you have in the medium and long term.
Regarding budget, it is important not to submit to the temptation of lowering costs at the expense of website design and programming, since a poorly executed store is in many cases the reason for business failure. A poorly crafted site can cause management problems as well as create a poor public image, expose the business to security vulnerabilities and cyberattacks, lead to tax errors or even conflicts with the law and the authorities that regulate e-commerce.
Generally speaking, the development of an online store requires the following technological resources:
- Domain: This is the name through which customers and users access the website (e.g., www.yourshop.com). It usually requires payment of an annual registration fee.
- Web hosting: This is the service through which space is contracted on a server where the website will be hosted. The characteristics of the contracted service must be compatible with the safety and performance standards that are required for proper functioning of an online store.
- SSL Certificate: This certificate allows encryption of data that is exchanged between the user and the website. SSL certificate installation is generally mandatory in most payment gateways and is usually included in the service offering of most web hosting providers.
- Content management software (CMS) developed or enabled for e-commerce: This is the engine behind the online store and allows for the upload and publication of articles, as well as enabling the shopping cart and providing integration with the payment gateway. In many cases, businesses require custom modules and components so that their CMS is adapted to products sold and is compatible with the business’ sales strategy. Some of the most well-known and used CMSs are Magento, Prestashop and WordPress / Woocommerce.
- Payment gateway or virtual point-of-sale (virtual POS) terminal: The virtual POS allows customers to make payment using a credit card or other means of payment online, such as virtual wallets. Although the installation of a POS will be carried out by the developer of the website, the activation service must be contracted through a bank or other provider, such as Stripe or PayPal.
The biggest advantage of developing our own online store is precisely gaining access to these technological resources. In particular, the possibility of making changes, adjustments, and improvements in the source code allows us to implement important functionalities for product or service marketing, adjust website design to the image we want to project for our business and update the website according to our needs as business grows.
SaaS platforms: an online store without touching a line of code
Software as a Service or SaaS abbreviated in English is a service model in which software provided to users online is developed, hosted, and managed by the company providing the service.
Using a SaaS platform makes it easy to create an online store, as the user doesn’t have to worry about certain technical aspects like servers or website programming. These platforms also provide intuitive visual tools and interfaces that help the user create a website without the need for advanced technical knowledge.
However, the inability to access the source code and manage some website technological resources limits advanced customisations, changes, or adjustments to the design. SaaS platforms also limit functionality and flexibility as the only instruments at your disposal are those visual tools and interfaces that have been made available by the service provider.
SaaS platforms usually provide design templates and offer pre-developed modules that can be integrated into your online store. These include payment gateways, forms, tracking systems, chat modules, and other features. Templates and integration modules may be free, or they may require payment of a license.
It is important to note that it is usually not possible to switch to a different SaaS platform or to your own online store. For this reason, you’ll need to evaluate if a SaaS platform is worth your while: consider your long-term perspective and business goals, the limitations in terms of design and functionality, and the impact of having to create a whole new store if you do require additional functionalities at some juncture.
These platforms usually have a monthly, quarterly or yearly subscription. The cost may vary quite a bit depending on the services offered, the number of products in your store and other functionalities. Examples of SaaS e-commerce platforms include Shopify, Squarespace, BigCommerce, and Webflow.
Marketplace: visibility, traffic and internationalisation
You could say that a marketplace is a digital shopping centre where other stores and retailers can sell their products, using the infrastructure provided by the marketplace. This infrastructure includes search systems, classification, product pages, price and tax management, payment gateways and other tools.
While a marketplace could also be considered a SaaS given its features and limitations, it offers advantages that the SaaS options we explained above do not include by default such as: visibility, traffic generation with minimal effort, and options to position the product in additional markets with relative ease.
Marketplaces facilitate customer-store contact. Stores benefit from the marketing and positioning work the marketplace has done and the subsequent traffic this generates, to the extent that customers find products and retailers in the marketplace in much the same way that they do in a brick-and-mortar mall. The clearest example of a well-known marketplace is Amazon, although there are thousands of smaller, niche platforms that are responsible for grouping stores with products in the same category.
Despite these advantages, a marketplace may contain dozens of stores that market similar products and are in direct competition with one another. This means it may still be necessary to work on brand and product marketing. It is also worth keeping your data up-to-date with feed management tools in order to stand out from other products and vendors in the same marketplace.
Our recommendation: work with an expert
Regardless of the online sales channels you choose, it is always advisable to have an e-commerce expert guide you through the process of creating the online store and help you successfully address all its key aspects.
Creating an online store is a complex process that requires full knowledge of the market, the chosen sales channel, logistical processes, legal aspects and the technological resources that go into making an e-commerce site.
Not all online sales channels work the same way, nor are all products or services suitable for online commerce, so having an expert is key to success in an increasingly competitive market. If you need help, at All Around Digital we can provide information and assistance when it comes to setting up your e-commerce site.