Is your brick and mortar business struggling due to the current global crisis? You’re not alone, but the reason you’re struggling is not only because of pandemic-related business closures. If at all, COVID-19 only sped up what was already happening. The retail apocalypse was already well underway, before this global pandemic began.
Since 2018, 59% of the retail stores have closed down. Why is that? People’s buying behaviors have simply changed with the digital economy. Consumers are feeling more and more comfortable ordering things online. Before the boom of online retailers and e-commerce stores, consumers had to go to a brick and mortar shop and look at the product. They depended on the selection of shops in their city.
Today, however, information and the product don’t belong together as much. What does this mean? Consumers look for a product and then find a shop that provides it at the best price and value. That’s why brick and mortar shops have had to adapt and change their sales process.
But that’s not all. Suppliers have also changed their sales processes. Since it’s so easy now to set up an online store, many suppliers would rather sell their products on their own website than through a brick and mortar store. Suddenly, the manufacturers are cutting out the middle man.
In short, brick and mortar stores have fewer products to sell than before, and consumers don’t want to shop in a store as much anymore. Only shops that provide essentials, like supermarkets, still see frequent visits.
What can you do if your store falls into the ‘non-essential items’ category? Or, what if you cannot go online because your offer is only applicable in person? Examples of this include massage therapy or similar services you typically can’t buy online.
In this article, we’ll go over some tips on how to save your business during this crisis. What can you do to protect your business, income and livelihood?
Even if your business can only deliver services in person, make sure to read the whole article. Because in the end, you might get an understanding of what you can do to save your specific business, too.
The Biggest Changes Brick and Mortar Stores Need to Make if Shifting to Online Operations
If you want to shift your business from brick and mortar to click and order, there is more to it than building a website and having a shop-plugin. You see, many brick and mortar store owners make one common mistake. They see their website as only an online version of their real store. But online shopping doesn’t work like shopping offline. Consumers today don’t find stores online by accident or click through the pages for fun.
There are three steps to transform a struggling offline business into a thriving online business:
- Help people find you online.
- Adapt your product range to that of online shoppers’ behavior.
- Encourage the consumer to return to your online store.
If you follow those simple steps in order, you’ll have a very high chance of weathering the storm and thriving despite a global crisis. You might even come out stronger than before. Before we go there, let us give you advice on how to get the most out of this article: Read it with an empty cup.
As Dan Lok often says, two of the most dangerous statements in business are, I know that and, My business is different. It might feel like you already know some of the strategies we’ll discuss. Or, you think your business is different and you and your clients have a special relationship. Your way of doing business is different, right?
Are you ready for the unpleasant truth?
If these differences were enough, you wouldn’t be struggling right now. You only know it if you live it. Study the tips in this article carefully, and allow yourself to accept insights that are radically different from what you intended to do.
From Brick and Mortar to E-Commerce Success: How to Get Consumers to Find Your Online Store
If you want people to find you online, you can do several things. One of the most essential things is experimental marketing. Why? Right now, there are countless online shops out there offering the same products as you. If you want to stand out, it’s crucial to become visible. You can use short-term and long-term strategies. Which one fits you best depends on your business.
If you want to use Facebook as an advertising platform, make sure to keep Facebook’s strict rules and regulations in mind. For products that are somewhat controversial, Facebook will often not allow you to advertise them. In this case, you can use either Google ads or create educational content.
As a next step, you can optimize this content for search engine visibility. Using this method to promote your business is called SEO marketing.
The Power of Niche Marketing Techniques
If you want to shift to online operations, you may need to become more of a niche business. The most effective marketing happens when you have a niche. Why? Because online shoppers already know what they’re looking for, specifically, do you understand? You see, if you are an offline brick and mortar store, people might like to walk through your shop. They can walk around the and discover different things they like.
Online, however, people look for a product with a purpose and an intention in mind. If you send them to your store with marketing, you also need them to have an intention. Imagine you were a customer yourself. Let’s say you saw an ad that says, Visit the ABC store now, we have all kinds of products.
Would you click it with a serious buying intention? Probably not. The ad isn’t specific enough, or niche enough. You were not looking for something specific, and the ad didn’t give you a clear picture of what is waiting for you.
But what if you were looking for a birthday gift? Imagine you see an ad that says: Trendy Gifts, the gift shop that has the greatest selection of birthday gifts available. How would you react now? This ad was targeting the niche of gift-giving, but the same is true for any kind of niche. In what niche could you specialize? Here are some examples of niche online stores that work:
- Household products (brooms, cleaning supplies)
- Athletic apparel
- Electronics for gaming
- Beauty products
Those are just a few of many niche examples.
Why Niches Magically Attract More Customers
Why is having a niche essential? Consumers today want what they are looking for immediately. They neither have the attention span nor the patience to browse for too long. Having a broad range of products isn’t as much of an advantage anymore as it had been a few years ago. But where is the difference between the ads before? Didn’t it say we have the greatest selection of gifts available?
Yes, think about why it works: If you are looking for a specific thing, what good is a vast range of random products? If you are looking for a gift, it’s a hassle to browse through clothes, electronics, household items. But if you have a great selection available for a specific demand, it might be enticing again.
There is another advantage to a niche: You can tap into an existing demand. What’s the benefit? Did you ever have a product in your store that no one ever bought, even if you reduced the price? The reason was probably not the cost, but the fact that no one was looking for it.
If you only offer products a niche that people are interested in, chances are you can sell much more.
There is even more to niches – you can specialize even deeper. Let’s say you want to dive into the beauty niche. You can choose to specialize in organic skincare only. That’s a niche within a niche. You won’t offer all beauty products such as hair products, makeup, and skincare. Only organic skincare. Want to be even more specialized, and even more niche? You could only sell only skincare for the face.
Be careful not to specialize too much. Before choosing a niche, do proper research and make sure that you have a market with a demand waiting for you. Important: Just having a niche doesn’t create demand. Specializing in an existing need and pulling in that traffic is what niche marketing is all about.
How to Adapt Your Product Range for Online Success
If you take a look at successful e-commerce entrepreneurs, you will notice a trend. Most of them say, Start with a general store, find one winner and scale that one. This advice sounds simple, but it isn’t easy. That “winner” is a product that sells like the proverbial hotcakes. To find it, you need an intense research process. Also, you have pitfalls to avoid. Before we go into useful advice on how to adapt your product range let’s talk about those pitfalls. This advice might seem counter-intuitive. Especially if you had a brick and mortar store before, this is crucial for a future e-commerce success.
What are some pitfalls or warning signs that you might not be setting yourself up for online success?
E-Commerce Pitfall #1: You are Overly Attached to your Product
Most e-commerce beginners choose a product based on what they like. But you are not your customer. For e-commerce to work, the only thing that counts is data. Analyze the market, see what works and then invest in that product. You might see a product that doesn’t even make sense to you but sells 100 units a day. Then you see a product that looks like people will immediately buy – but they don’t. Be brave enough to drop a product that doesn’t return results as fast as possible. Yes, it might be disappointing to be wrong with your intuition, but this comes with experience. Just move on, fail fast, fail forward and win sooner.
E-Commerce Pitfall #2: You Don’t Research Enough
It’s not enough to have a deep understanding of the market need. What good is it if you can’t deliver what people order? That’s why it’s just as important to gather intel on your suppliers. Especially in e-commerce, where you can source products directly from manufacturers. Sourcing directly most likely costs you a fraction of what you are paying now. That’s why many e-commerce stores have a higher profit margin than a brick and mortar shop.
Yet, high margins don’t matter if you can’t sell anything. Here are some things you need to look out for:
- Is the supplier reliable? Check testimonials, ratings, and comments. Give them a small order to test their product quality, and write them messages to test how responsive they are.
- Is the supplier big enough? What is their stock size, how fast do they restock? How long have they been in business, how long have they been on the platform you use to buy from them?
- How fast does the supplier ship? Consider this in the shipment times you give your customers. If you have a product that is in high demand and you get many sales, it pays to use a different approach. You can partner with a warehouse in the country you are targeting. Ship several of the high-demand units to it upfront. This way, when you get an order, you can ship the product quickly and improve customer experience. What is a highly in-demand product? A good rule of thumb is if you get 30 orders per product per day.
- What quality do the supplier’s products have, and how do they deal with faulty units? (What’s the return policy, warranty conditions, repair times?)
E-Commerce Pitfall #3: You Don’t Know Your Metrics
How did you imagine going from offline to online? Some brick and mortar business owners think it just means putting their stock on a website. Those businesses will have an unpleasant awakening soon. E-commerce is a noisy marketplace, and similar online stores will fight you for customers, quite brutally.
Without proper online marketing, it’s highly unlikely to get online customers at all. Since everyone is marketing, you need to outmaneuver the competition. As Sun Tzu said: A battle is won before it is fought.
Sun Tzu also said, If you know yourself and your enemies, you don’t need to fear a hundred battles. If you know only yourself but nor enemies, for every victory, there will be a defeat. If you know neither yourself nor your enemy, you will lose every battle. This wisdom is true in e-commerce as well. If you know what your competition is doing, what they spend in marketing and their strategy, you can win
Important Metrics that can Make or Break your Business
One of the most important metrics for this is the CAC or customer acquisition cost. This metric tells you how much it costs you to acquire a customer. To lead customers from the first click to the sale can be quite expensive. Why? Because unlike offline, the online buying journey has more steps. These steps include:
Seeing an ad
Visiting the site
Looking at the product
Putting it in the cart
Going to checkout
Even though you only pay for people seeing your ad and/or clicking it, without a sale, this investment is in vain. Their buying journey with you can end at any time, and then your ad was ineffective.
Let’s say you have a product that costs you $5 to source, including shipping, and you are selling it for $19.95. You now have a profit margin of $14.95.
This means you can spend theoretically spend $14.94 to acquire a customer and still make a profit, even if it’s small. Now take a look at the statistics of your campaign. Do your expenses shoot over your CAC? If yes, you are losing money, even if you sell a hundred products.
A Simple Way to Win the CAC War
This might be one of the most significant changes for brick and mortar store owners. Even selling thousands of products doesn’t mean you make any profit.
Make sure to have as high a maximum CAC as possible. Because if you can outspend your competition, you’ll win the war for customers.
For example, let’s say you have a maximum CAC of $100, and your competitor has a maximum CAC of $15
This means you can spend up to $85 more per customer in marketing. This way you will attract more traffic, and you can dominate your competition.
How do you get a higher CAC? Lower your cost for advertising. Now, we’re not saying to spend less on it. You see, some platforms reward you if you get a lot of engagement on your ads.
For example, on Facebook, if your ad gets shared, your cost to run it lowers. This is why the same ad can have a CAC of 15 or 100. Don’t try to do it yourself if you have no experience. It would be less expensive to hire an expert who knows what they are doing.
How to Adapt your Product Range the Right Way
Now that you know how to avoid some critical pitfalls let’s talk about how to find the right product. There are several strategies to do this. The first is to tap into an existing trend, the second is planning for the long run.
To use existing trends, watch social media ads closely. You might notice that certain product ads get thousands of likes in a few hours or days.
For example, if the ad runs for a few days and already has hundreds or thousands of likes, it went viral, which is good. To make sure, look for the product specifically and observe the reaction to other ads for it. If you see an overall high demand, it’s safer to invest in it.
There is never a guarantee that it will work, of course, but you can stack the deck in your favor. You can do this by being very cautious in testing. It might always be that a trend is only short-lived. Once you notice it, it might be declining already.
So don’t only look for one product at a time. The worst number in business is one.
How to Win Over the Online Consumer
Alright, you have chosen a niche, invested in marketing and are attracting clients. Now what? It’s very expensive to acquire new customers, but very cheap to upsell existing ones.
This means you want to figure out how to build strong relationships with your customers. What bonuses can you give them for staying loyal to you? How are you engaging them? If you make them feel validated and cherished, they will come back to you.
Think of your own buying behaviors online: Why are you coming back to individual sellers? Why do you never come back to others?
To engage customers to return, you can give them specific incentives such as:
- A discount code for their next order
- A discount or bonus if they refer a friend to your shop (perhaps their friend gets a discount as well)
- Add an extra gift to their order for free, as a surprise
- Ask them for their feedback on your store, and if you implement their feedback, let them know you followed their advice.
- Include a personalized, handwritten thank you note in their order. This personal note will be appreciated when they open their package.
With strategies like the above, it’s easier to bring your brick and mortar store into the online world.
What’s the Most Important Thing Brick and Mortar Store Owners Need Right Now?
With the information in this article, you may or may not have an idea what you can do to save your business and lifestyle as an entrepreneur. But you likely have more questions:
Which suppliers can you trust? What trends will occur in a few months? Which online marketing strategy works best specifically for your business and your customers?
Of course, you can find this out, if you are willing to invest time and money in trial and error (which will teach you a lot, but take up a lot of your time and resources.)
Perhaps you neither have time nor money to waste right now. That’s why Dan Lok put together a high-level advisory board. Its purpose is to help distinguished entrepreneurs to create generational wealth even in times of crisis.
Distinguished entrepreneurs are dragons. Dragons are visionaries, wise strategists, fearless leaders, and daring enterprisers. The dragons will either dominate an industry or shape an industry—they are the Kings or Queens of their industry. Dragons can rise above a global crisis, because they have what it takes to survive the crisis.
Do you see yourself as a future King in the online space? Then you’ll want to draw experience from people who already failed for you. You’ll want to avoid pitfalls so you can be more successful faster. Imagine how you can grow if you learn from people 10,20 or 100 times more successful than you are.
If being a dragon sounds like you, click here.
Please note: This a very exclusive group. Only 100 entrepreneurs are accepted, so act now before your seat is taken.