03/12/2013

By Shingo Murakami, UK MD, Play.com


Online retail spend has grown hugely in a relatively turbulent retail market. According to retail analysts Verdict, 11 per cent of total retail spend will come through online by the end of 2013 – and this is expected to hit 15 per cent by 2017. In a decade where the British high street has been hit with the decline of some large chains, online has weathered the storm reasonably well. Shoppers spent in excess of £78 billion last year alone. Online and the Internet have had an impact on larger retailers and business models, but a separate issue is where this leaves the smaller retailer. While the Internet is sometimes seen as a challenger to small retailers, this does not need to be the case.

Taking that first step online
Smaller retailers can lack the resources, skills, or experience needed to set up an online retail presence. Decades of experience selling in the offline world do not necessarily prepare a retailer for the unique set of skills needed in online. For example, a simple case of indexing stock requires knowledge of Excel that may replace good old fashioned hand written bookkeeping. Securing the online equivalent of a ‘prime location’ requires a knowledge of SEO and keyword search to ensure a retail site ranks highly on search engines and grabs the attention of new customers.

In some instances it is British retailers’ attitudes and approach to online retail, rather than the technology itself, which causes issues for their business. It’s best to view the Internet as a great leveller where the benefits of flashy retail stores, high footfall locations and big marketing budgets are replaced by a solid SEO strategy, well designed website and quality customer service. While bigger retailers can ‘buy’ these, smaller retailers can benefit from a trusted partner to guide them.

Online marketplaces offer this guidance. Those small retailers who see the value of getting online, but lack the skills, resources and funds to take the first step, should look to an online marketplace for assistance – in the same way they may have done with a physical marketplace vendor in the last century. Sites like Rakuten’s Play.com have a vested interest in the success of all retailers on the company’s platform, and provide assistance to set up a brand new store and attract new customers with easy to use e-commerce tools. The ultimate goal of a marketplace is to empower retailers to expand sales online.
The advantages of the online marketplace

Toy Galaxy is a toy retailer stocking a wide range of toys and games, from nursery age upwards. The business operates five stores across London and Oxfordshire, in Barnet, Ealing, Harrow, Cowley and Witney, with over 27,000 different items available. The company was selling its range through third party web stores, but did not have a positive experience of selling online. There was too much focus on price when selling online, and not enough on representing the brand values customers were accustom to in Toy Galaxy’s physical stores. In order to better represent the brand, and the way the business interacts with customers, Toy Galaxy began selling as a merchant on Rakuten’s Play.com.

Since the first month of trading, online sales have increased by 890% in just five months. The growth looks set to increase during the Christmas period, and continue into 2014. Setting up a merchant store on Rakuten’s Play.com has allowed Toy Galaxy to put the brand front and centre across their online presence. This is mirrored with the quality of interaction with customers, which is handled through the Rakuten Mail service – allowing Toy Galaxy to keep in regular contact with a growing list of online customers. The company has also been able to garner a greater insight into the differences in popularity of certain toys in-store vs. online, and now uses this to better inform purchasing and stock decisions. Analysing which products sell better on and offline is a core focus for the coming year. Bhav Patel, managing director of Toy Galaxy, concludes “looking back to five months ago we can’t imagine trading today without our store on Rakuten’s Play.com”.

The emergence of the Internet has affected almost every business in the UK. While the initial change may have presented a threat to traditional retailers, the industry has evolved to the point where any drawbacks are outweighed by potential gains. It’s up to retailers, big and small, to adjust to the changes and successfully grow their business – bringing a loyal customer base online while simultaneously expanding their reach.

Sources

1. http://www.sas.com/offices/europe/uk/downloads/retail/retail-predictions2013.pdf