The Covid-19 pandemic forced many small firms to finally get round to focusing on developing an effective ecommerce offering. Christian Doherty outlines how to make the most of it.
It’s not surprising that Covid-19 restrictions have dramatically affected the UK’s business life. For many businesses relying on some form of human interaction, lockdowns and other restrictions have placed immense pressure on the bottom line.
For some, the pandemic has catalysed a move towards ecommerce. Whether that means selling existing products and services online or developing new ways to generate revenue via online channels, ecommerce has boomed.
Research by Liberty Marketing has revealed that during the most recent lockdown in Wales, the week of 24-30 October 2020 saw an 88 per cent revenue increase for online stores from ‘non-essential items’, while a ParcelHero study found that online sales soared by 60 per cent in October.
According to Growth Intelligence, 85,000 businesses launched online stores or joined online marketplaces in the four months from April 2020, although this can bring its own issues (see box).
For many businesses, the pandemic has been an opportunity to develop an online offering, something many struggled with before. “We’ve doubled the volume of our products and expanded into new categories,” says Rosie Collins, marketing manager at Macknade, an upmarket farm and food business. With two existing sites in Kent that relied heavily on footfall, she says the absence of customers required a new approach.
“The lockdowns gave us the chance to invest and beef up the functionality of the website to make the most of Christmas,” she says. “We’ve got wine boxes, deli boards and fruit-and-veg boxes. And we’re developing subscriptions for beer, wine and cheese.
“It’s accelerated the ideas that we’ve talked about for ages. But this has forced our hand and, while it’s challenging, it’s also led to us giving other things a go. And as a small business we can pivot quite easily.”
Macknade was one of many businesses to have an online channel as a small part of overall revenues.
Once the first national lockdown came in last year, it was clear that it required investment to keep existing customers engaged and attract new ones.
“The two key areas were paid social advertising and finding a good freelancer or expert to help with the technical details,” Ms Collins says. Paid social advertising – Macknade uses Facebook and Instagram – allows her to target people based on interests and go after customers she knows will have an interest in the company’s products. “You don’t have to spend silly money,” she adds. “On Facebook and Instagram you can stay quite low-budget and tweak it as you go along. It’s been a really good way to target audiences.”
Peter Mowforth is an ecommerce consultant based in Glasgow; he has worked with both large and small businesses to help them grow their online operations. In his view, the key to developing a successful – and sustainable – ecommerce offering is
to effectively retain ownership of the key elements. That extends to your website, URL and, most importantly, your customer relationships.
“You want to fulfil things yourself if you’re an SME: that means packing and dispatching it yourself,” he says. “And, yes, it costs more, but you pack the box so you can put the leaflet in there, advertising your other products. It means you can brand your packaging, and start to build your relationship with your customers. And as you go on you will gain more customers who know you and like you and are happy to recommend you. While you want to make profit, you want to build your customer base at the same time.”
Beyond that, make sure you have a clear offering. “One of the things Jeff Bezos – perhaps the world’s greatest ecommerce retailer – did with Amazon was to start out with one product,” says Mr Mowforth.
“It was only once he’d sold $1 billion of books that he decided to expand the range. So keep a narrow focused strategy and put all the wood behind the arrow.”
Spread your wings
Once your customer base has been established and engaged through regular contact – either via social media or by bringing your existing customers over from the bricks-and-mortar business – it may be time to diversify.
It’s certainly worked that way for Florence Hellier, co-founder of Hampshire-based Hoxton Bakehouse. Having established four retail outlets around the Winchester area and developed a thriving wholesale business, the advent of the pandemic saw the business rapidly ramp up its online retail side.
“We could quite easily switch from our wholesale business to retail customers, aside from taking on two extra delivery drivers,” she says. “We’ve added 25 per cent of new customers to our existing base, in part thanks to offering things like eggs and flour – items that were suddenly scarce at the beginning of lockdown. And then they’d try the bread and pastries and now they’re loyal customers.”
Ms Hellier’s success in not just maintaining but also adding to the customer base owes a great deal to careful use of social media. “We’ve got about 30,000 followers on Instagram, as well as others on Facebook and Twitter,” she says. “Instagram really helped and it’s never really dropped off. Having that channel really helps to keep the sales coming in.”
And even though the Bakehouse has invested heavily in bricks and mortar (the company’s fifth site opened just as the lockdown hit), it was able to build a fit-for-purpose ecommerce site within a few weeks.
“If you don’t have a website, just do one yourself,” Ms Hellier advises. “Using something like Squarespace might only cost you £30 a month and you can put add-ons into that. You can create a basic product page really easily, and then use social media to get your message out. If you use a platform like giraffe you can put a certain amount of money behind an advert per week and you may see orders go up.”
It may be worth checking independent web designers, too – they may not be as expensive as you think, and could provide you with a bespoke offering that will really help your business stand out.
Wendy Hamilton agrees that social media is a crucial tool in reaching out to customers both old and new. As the owner of Grasshopper Toys, she’s only too aware of the crowded nature of her market niche, but agrees with Mr Mowforth that retaining ownership and control is crucial when selling online – and that extends to generating content to engage customers.
“Don’t try to outsource your voice to an agency; you’ve got to develop that yourself,” she says, explaining that she while she only posts sporadically on social media, she invests time in getting the tone right.
“I hate social media because it takes a lot of time – you can’t just rock up and do it without thought, so you have to be considered about what you do. But if you can get that tone and frequency right, then social media can be a very effective way of engaging existing customers and attracting new ones.”
However, not all companies can ride out the storm by continuing to ship products. Many service businesses are being forced to invest in online channels to keep going. For Vicky Anstey, founder and MD of dance studio Barreworks, user experience is the number one priority. “If a website or online platform is complex to navigate, takes time to load or creates frustration in the user experience, they won’t stay long on the site,” she says. FSB Payments (fsb.org.uk/benefits) can help here, allowing sites to offer a number of secure ways to accept payments.
Accessibility is vital, too: not everyone is tech-savvy or intuitive when it comes to the world of online.
“In as much as we endeavour to make our workouts and our studio inclusive, we have set out to make our online activities straightforward, accessible and stress-free,” Ms Anstey says. Her mantra is simple: stay small, stay lean, stay agile. “Pivot. See the opportunity in the crisis. Build up resilience and never give up,” she says.
However, standing out from the crowd is difficult when the volume of online chatter is at an all-time high. “Make everything you do uniquely you,” says Ms Anstey. “Make sure your personality shines through – no one can copy that or take it away from you.”
Driving local online sales
It’s clear that trying to carve out an individual niche for your business online is really tough, even at the best of times. During a pandemic, however, getting your voice heard
is even tougher, especially if your business is making its first foray into the ecommerce space. It was that challenge that led Jackie Mulligan to launch ShopAppy.
“It’s the only place-centred digital platform that brings shops and services together and enables people to browse, book and buy local online,” says Ms Mulligan. “And we are the only local platform that truly aggregates, allowing people to buy bread from the local baker and veg from the veg shop, and only go through one checkout. Then you can choose whether you want to collect your items or have them delivered. Or you can just browse before visiting the shop itself.”
Running across different places from Kirkcaldy to Taunton, Ms Mulligan says that when the app launched four years ago, she found a small number of businesses with some online presence, but many wanted to grow sales during lockdown. “We wanted to be an aggregator because we felt it shouldn’t be easier to shop from a distant warehouse in the middle of nowhere than it is on your local high street,” she says. “We know that people have an emotional connection to where they live and want to spend their money locally.”
Online marketplace challenges
FSB is warning that one issue small firms trading through online marketplaces might face is the digital services tax.
The tax is a two per cent levy aimed at making global giants pay a greater share of tax but there are concerns that marketplaces will simply pass the cost on to small business customers which use the platforms to sell their own products. “Moves like this are not in the spirit of the digital services tax,” says Mike Cherry, FSB National Chairman.
According to FSB’s Destination Digital report, other problems small firms face when trading via online platforms or marketplaces include malicious or fake reviews, cited by 21 per cent of small firms, sudden changes to terms and conditions (19 per cent) and infringement of intellectual property (13 per cent).
Many small firms also operate in areas where poor-quality broadband can make it difficult to trade online at all; FSB’s Lost Connection report suggests 33 per cent say their broadband speed is insufficient for their current needs and a further 40 per cent believe it will be inadequate in the future.
Christian Doherty is a freelance business journalist