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Struggling With Online Sales? So Are the Big Guys


That online sales still aren't a major part of overall sales for many retail businesses, isn't exactly a secret. According to data from Forrester, only about 8 percent of total U.S. retail sales came from ecommerce last year, less than a tenth of the total $231 billion sales pie.

What hasn't been clear is what share ecommerce comprised for some major retailers. Many companies tout the growth of online sales, but neglect to share the exact extent of that growth. Recently, the Securities and Exchange Commission asked retailers such as Target and Wal-Mart to provide more information about what they sell on the web. As reported by the Wall Street Journal recently, Wal-Mart said 2013 online fueled just .1 to .2 percentage point of the company's 2.4 percent increase in U.S. comparable store sales in fiscal 2013, while Target has said through a spokesman that online sales account for only 2 percent of the company's $73 billion overall sales.

For other retailers, online sales are barely worth mentioning. Fifth and Pacific, the owner of brands such as Juicy Couture and Kate Spade, said its e-commerce share was not "relevant to investors." PetSmart said its e-commerce business was not "a material amount of our total net sales."

So what are the takeaways for small businesses trying to maximize online sales when the big guys are still struggling? We have some advice.

Don't be surprised. Kevin Eichelberger, chief executive officer and founder of Blue Acorn, an ecommerce agency in Charleston, SC., reminds us that we've had thousands of years to perfect brick and mortar sales and only a few decades for ecommerce. "In the grand scheme of things, it's still a fairly new channel."

Adds Peter Leech, managing director of retail ecommerce for retail management consulting firm The Partnering Group, only a few product categories are even sold online and many retailers have not been as laser focused on driving online sales as companies such as Amazon. Says Leech, "It's the year-over-year, quarter-over-quarter investment that builds a file of existing customers who return and repurchase that drives a healthy ecommerce business. If you don't invest every year you've got a real hill."

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Think big picture. Ecommerce has its advantages, a return on investment being one of them. As Eichelberger reminds us, if big box retailers compared their online channels to a single store, the online channel will likely exceed an individual store's sales. He says, "The cost of customer acquisition is very high and if you're letting the competitors get those customers when at a potentially lower cost than the online channel, I think you're missing out on a pretty big opportunity."

Be unique. With large-scale competitors like Amazon, small businesses can't just sell someone else's product anymore to gain a competitive advantage, says Eichelberger. He suggests small businesses learn from companies like Warby Parker and Bonobos as retailers to model with a unique offering. To win online these days, he says, you have to offer something that is more compelling, at a better price or with more convenience. "If you don't have a plan to be better than your competition you probably shouldn't be doing it at all."

Stay focused. Some might insist that a sale is a sale no matter whether it's registered. But unless someone on your team is waking up every day thinking about how to grow your online sales specifically, says Leech, "you shouldn't be shocked that Amazon takes you out behind the woodshed." He adds, don't let use of a buzzword like "omnichannel" mask a lack of focus that stands between you and doing the work you need to grow your channel.

Be resourceful. Just because you don't have the distribution network that some retailers have built doesn't mean that you can't compete in areas such as two-day shipping and overnight delivery. Consider partnering with startups that can solve these problems for you, such as Deliv, which uses a stable of couriers in handpicked cities to deliver packages, or ShopRunner, which is testing lockers in 7-11s for deliveries just like Amazon. Says Leech, "You're not going to beat them so you are going to have to join them."

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