So you’ve decided to take the plunge and finally move into the online sphere. What now?
You're going to need to change a lot!
One of the key mistakes that businesses who’ve been dominating the offline sphere make when moving online is assuming that everything remains the same.
Online sales, marketing and growth strategies are completely different to offline strategies and this assumption is a big reason why most online businesses fail when making the shift.
Online retail is booming currently with sales that have crossed the $2 trillion mark in 2017, and the market is only meant to DOUBLE by 2021. Moreover, Middle East happens to be one of the fastest growing regions for E-Commerce with growth by 1500% over the last decade.
Currently, the Middle East’s internet penetration rate is 60% with about 147 million users, well above the global average of 51.7%. With a high population of young people, an increasing number of active smartphone users and heavy social media penetration, the only real challenge is shifting the cultural mindset away from the traditional offline shopping experience presenting a huge opportunity for offline businesses that want to move online.
For many business owners, however, making the move from an offline to an online business model can be more than a little overwhelming—especially if your experience with tackling the online market is limited or lacks guidance. To ensure a smooth transition of your offline business to an online business, here are four key mistakes to avoid when starting an e-commerce site in the Middle East:
Using a complex platform that is confusing for customers
User Experience design (or UX design) has never been more important than it is now. With the growing number of apps, e-commerce site and communities, designing the system around the experience for the users is now highly important. Bad or complicated design of the platform or the customer shopping funnel can easily be the reason why a customer switches over to your competitor.
This doesn't just involve the aesthetics. How your instagram account looks is very important obviously, but UX design is also about how it feels and works. If you have an amazing layout on your Instagram account, but your checkout page is difficult to maneuver then that could be a reason why customers abandon their cart.
When designing your e-commerce site, stick to the basics, especially when you’re just starting out. It may be tempting to use fancy designs and features, but it’s a much better idea to only add features that are necessary for the shopping experience. Do not get caught up in complex systems and features, which will make it difficult for your consumers to navigate through your website. Easy functionality should be your key focus, with the aim of enhancing customer experience, not hindering it.
Online buying psychology is different from offline buying psychology
Sales tactics that worked for your offline shop may not necessarily work for your online outlet. That means that you have to come up with different sales and management strategies specific for your e-commerce site.
The three main reasons consumers in the MENA region shop online is because of convenience, special offers and the ability to compare prices. When designing sales and management strategies for your e-commerce site, these reasons needs to be of crucial consideration.
For instance, since they can easily compare your prices with that of your competitors, online buyers are a lot more price driven than offline buyers. Ensure that your prices are at least competitive with the market.
Online buyers like to see prices upfront, so include the price of each item on your site. Transparency about the prices is highly important as well, because any kind of hidden charges would stop customers from completing the purchase or buying again.
Ignoring your offline shop
Moving your shop online is not an excuse to ignore your offline shop. If anything, both complement each other as an increasing number of consumers look at a multi channel approach when it comes to shopping. Enabling a seamless customer experience across all physical and online channels are vital to attracting and retaining customers.
Just understand that the role of your physical shop will change. Especially in the middle east where offline shopping still dominates, you will have to re-strategize how your offline shop fits into your new business model.
91.4% of shoppers around the world research products online before going in-store to demo the product and purchase it. Customers preferred this because it gives them time to decide what to purchase and to hunt for the best prices. In this case the physical shop is used mainly as a showroom for your products.
An A.T. Kearney study of US consumers' behaviour across various stages of the customer journey revealed that 55% use both traditional and online stores. This means that the future is not just digital, but a mix of traditional with digital.
Not providing a secure payment mechanism
60-70% of e-commerce payments in the middle east were made through cash on delivery because of internet fraud and a lack of trust in online payment systems.
However cash on delivery is risky and expensive for retailers since they need to bear the risk upfront, which can negatively affect cash flow. Retailers need to partner with secure online payment platforms and gain customer acceptance of these options within the GCC.
Offer online payment options that your customers can easily and securely access. Here at Tap, we provide goSell, a convenient payment gateway, and goCollect, a mobile billing application, for businesses in the MENA region.
These online payments were made because of the lack of robust payment mechanisms in the region, understanding the difficulties it causes retailers and consumers likewise. With both goCollect and goSell, your clients can make payments easily, quickly and securely around the world using their debit or credit cards. Just ask any one of the thousands of Middle Eastern companies and businesses who use (and love) Tap!
Unplanned distribution and logistics
One of the biggest changes that occur when you move into the online sphere is the delivery. Previously, the customer would just purchase it in store and take it home but now you need to think about how to get the product the consumer just purchased from your store to their house.
A long delivery time and insecure delivery channels reduces the possibility of a repeat purchase from the customer. This can also raise handling costs for the businesses. In the MENA region, where a majority currently prefers cash on delivery, suboptimal delivery with a high return rate (packages not delivered after a given number of attempts) also means lost revenue!
Delivery logistics need to be mapped out well in advance to ensure that there are no hangups.
The lack of a proper street marking system has made the national postal service in the region highly unreliable. However this has resulted in a rapid growth of the last mile delivery market in the region, which is focused on providing quick and secure delivery from the warehouse to the consumer. The last mile delivery space is expected to almost double in size, to $3.4 billion by 2022.
This could lead to a higher delivery performance for the e-commerce market that could help take your online business to a whole new level!
What are your very favorite examples of online businesses? What makes their online experience so enjoyable for you? Help your local businesses move to the online sphere by telling them what you like best!