Moving From Brick & Mortar to Online
If you are a brick & mortar retailer, you might have considered moving part or all of your brick and mortar business online. You are not alone in thinking like that! We have all seen how it could have been a good opportunity or a lifeline for our businesses to be open online during the lockdown.
Every year the contribution of e-commerce to total retail is increasing, with a lot of brick & mortar retailers adapting and opening online store fronts for their brands.
Check also our latest Retail Statistics compilation.
There is no doubt that any brick & mortar retailer who opens an online front will have a competitive advantage over any pure-play online retailer if they use their capabilities & properties to their advantage.
- A pure online retailer can not offer their customers click & collect option, but a brick & mortar can, and we have seen this option to work very well with our customers. Not everyone want to wait or pay for shipping.
- A brick & mortar retailer with established store locations will have more trust & brand recognition with online customers.
- A brick & mortar retailer will have one less friction point online when it comes to return & exchange, as customers know they can drop the item at the nearest store.
- A brick & mortar retailer has existing showrooms for customers to touch and try the product before deciding on buying it later online, and also an online store to check the prices and new arrivals before going to the store and buying from there.
- A small retailer can directly use their existing store inventory to sell online and have two channels for selling the same merchandise (we explain how below).
Why would it be advantageous for a brick and mortar store to move to an online platform?
Moving part of your brick & mortar business online will give you the below advantages
- Selling to customers out of your geographic area.
- Appealing to younger demographics who prefer online shopping.
- Offering omni-channel retail, where customers can start the process online and finish it offline or vice versa.
- Protecting your market share and staying competitive in the market.
How Do I move My Brick and Mortar Business Online?
Here are the steps to moving your brick & mortar business to online
1. Setup Your Online Presence
Choose and buy a domain name that represents your brand. Ultimately this should be exactly the same name as your brick & mortar brand name, but it might be difficult to find the exact match. You might need to add a suffix to it such as XYZstores.com if you can’t find XYZ.com
The best and most poplar domain extension is .com, so it is always better to try and find alternatives within .com before choosing any other extension.
Hosting or E-commerce Platform
You need to decide whether you want to set your own website on your own hosting or going with more established ready-to-use e-commerce platforms that would make your life easier.
If you have technical expertise you can always choose the DIY route (I personally have done that and continue to do that with all my websites).
However; if you don’t then it is much better to go with a platform for as low as 30$ per month and have everything set-up for you and find good integration options with other required services, such as payment providers and shipping providers.
If you use a cloud-based POS software at your brick & mortar, you can sell in store and online for free and integrate both channels together by having your inventory synced in real time. You can check out our Software & Equipment page for our picks.
We will explain more on inventory syncing between online and in-store below.
2. Set Up Payment Methods
You need to get a business or merchant account with a payment provider to allow you to accept credit card payments online. Since you already have an established business with a registration and Tax ID this should not be an issue.
Just ensure that this payment provider will integrate with the online platform you have chosen in the previous step seamlessly. You can do that by checking the website of the platform for supported payment methods.
Most popular payment gateways include:
3. Connecting to Warehouse & Inventory System
In order to be able to fulfill your online order from your warehouse directly and have an accurate inventory system that updates with every transaction, you need to integrate both systems together.
The way we do this is by creating a separate bin for the online store at the warehouse and transfer stock into that bin. This stock will be blocked in this bin and used exclusively for online orders, i.e it will not be used for replenishment for the brick & mortar locations unless we transfer it back to them.
Then you will have to connect the online platform you have chosen to the WMS (warehouse management system) and specifically the bin specified for that.
This is a technical step and depends on the system you are using for your warehouse management, so we recommend assigning someone to do it for you.
Integrating both systems is very important to avoid having any fulfillment issues which will result in refunds or complaints from customers who paid for an item that is not available to be shipped. It creates a bad customer experience, even if the payment was authorized only and was not captured.
POS System Integration
Another way to connect your brick & mortar store to your online store is to choose a cloud-based POS system as we explained before. This POS system can allow integration with the different online ecommerce platforms or has its own online sales channel.
Because this type of POS is in the cloud, it updates your inventory every time an item sells online or at your brick & mortar store.
This is also a good solution if you don’t want to have a separate warehouse only for ecommerce orders, and will allow you to fulfill your orders directly from the store, so you don’t have to block certain stock for ecommerce and miss sales opportunities on the sales floor.
We actually recommend this for small retail businesses and fashion boutiques that operate one location and want to sell online directly from there.
4. Set Up Shipping & Fulfillment
Next you want to set up a shipping method and choosing your shipping providers.
A lot of e-commerce platforms already integrate with the biggest shipping providers, and there are several that connect you to all the different shipping companies and get you the best rates.
Check out our Software & Equipment page for our picks.
If you choose other providers, there is usually an API to connect your store to this provider’s system to seamlessly receive an update with your orders and come to pick them up.
You can always opt for doing this manually though, where you process the order and request the shipping pick-up form the provider’s system and print the labels from there.
In both cases make sure to update the shipping rates to be calculated accurately on your platform based on shipment weight and location. This amount will be added to the order and paid in the same transaction by the customer.
5. Specify Your Return Policy
Decide on how you want to handle returns and clearly state this on your website, so customers know what to expect.
Make sure you understand the costs of processing returns for e-commerce businesses and whether or not you will pay for the return shipment or whether you will charge the customer a re-stocking fee.
6. Specify Your Product Assortment
You don’t have to take all your products online. In fact, not all products will work well online, so you might want to decide on the range you want to put on your online store and the products you will keep for the physical stores.
This is because, as we mentioned before, you will be blocking the items specified for online in a separate bin and they will not be used for replenishment at the stores. After a while you will find that the products that don’t sell well online are missing sales opportunities on the floor and you will end up having to discount them to clear them at the later stage.
Also your online sales will typically be lower than your average brick & mortar sales, so you don’t want to block a big assortment of stocks and miss getting a good return on them.
Read More: Gross Margin Return on Inventory (GMROI)
If you are using a cloud POS software, as we mentioned before, this will not be an issue, since you don’t have to block any items for ecommerce. You will also still have the chance to choose which styles to put online or exclude from the online catalogue
7. Set UP Online Marketing
You will never succeed online if you don’t do online marketing. Here are some of the basic channels you will use & tasks you will perform.
Monitoring: (Google analytics & Google Search Console)
Set up Google Analytics and Google Search Console in order to be able to monitor the performance of your website and where your traffic is coming from.
You cannot optimize what you don’t measure, so we recommend learning Google products for webmasters and we have found them to be very valuable.
In order to start getting organic traffic to your website, you need to start putting out content on your website, as well as on other social media platforms.
This content can come in the form of blog articles, infographics, pictures, videos,..etc. It depends on your brand, the products you are selling, and where your typical customers hang out.
SEO is optimizing your website for search engine, so that you receive targeted traffic from people actively looking for the type of things you offer.
You can hire an SEO professional to optimize your website for all the targeted keywords that you want to rank for… or learn to do it yourself.
Some people think that they have to be on all the major social media platforms, and end up being burned out from all the updates they have to do and all the customers they have to answer.
Actually, this is not required !
This highly depends on what you are selling and where your customers are. Fashion & beauty businesses for example work well on Instagram, while B2B businesses would work better on Linkedin or Quora. Other businesses can benefit much more from Youtube.
Choose only the relevant platforms and maintain & update them regularly.
It is hard to depend 100% on organic traffic alone, so you will most probably need paid ad campaigns.
Set up your Google Ads account for all search and display ads and your Facebook Ad account for Facebook & Instagram ads.
Google My Business
Since you already have a physical location, you can list it on Google My Business to appear in Google searches and on Google Maps when people search for your business in that area.
Once you register for this free service, Google will send you a verification code to your physical location and then you will be able to control this listing and answer customer questions and respond to reviews.
Of course make sure to add your website, so customers know they can check your products online or even order directly from there.
We have mentioned before that the cost of customer acquisition for online stores is higher than brick & mortars. This is why, one of your marketing priorities is to maximize your customer lifetime value (CLV), i.e how much each customer will spend at your store during a lifetime.
For this you will need a communication channel with your customers to regularly update them about your new arrivals and offers, and the most effective method is e-mail marketing.
Of course you will communicate with them through social media, but the organic reach on social media is becoming lower everyday.. you need to pay to reach.
On the other hand, someone who actively signed up for your e-mail newsletter is someone who is highly engaged with your brand and wants to hear what you have to offer in the future. You should capitalize on that.
There are many services that allow you to create an e-mail list and segregate your audience, and even schedule a series of predefined e-mails to be sent to each customer based on their segment. These platforms are of course not for free, but they allow you to scale up the more subscribers you have, so you can always start at the lower rate.
8. Determine Manpower Needs
After going through all the previous steps of moving your brick and mortar business online, you must have already started thinking about the people you will need to manage all this.
Just as you need employees for your brick & mortar business, you will also need people to manpower your online store for everything to work efficiently.
People you might need to hire for your online store:
- Online Merchandiser to allocate and replenish stocks to online store location (Can be done by your regular merchandiser)
- Online Marketing Specialist for all social media, SEO and online ads work
- Graphic Designer for all the artwork and product images
- Warehouse Personnel to fulfill e-commerce orders and prepare them for shipping
- E-commerce Store Manager to manage this team
Moving part of your brick & mortar business online can add a lot to your retail business and help you open new channels for your customers to shop.
As a brick & mortar retailer you will also have a competitive advantage over online merchants who don’t own physical stores.
If you utilize this to your advantage properly, you would have created another reason for your retail business to survive, and even thrive in today’s competitive retail landscape.