A Blog from Abroad: Starting an Online Shop (Association for Cultural Enterprises)
By Tom Dykes, Director of Digital at the Association for Cultural Enterprises
Now, more than ever, an online presence has become a vital part of the business plan for nonprofit retail. Thanks to our friends across the pond at the Association for Cultural Enterprises for this excellent perspective on how to get started in eCommerce -- or to increase the effectiveness of what you have!
So, you want to start an online shop? Maybe you’re a small-ish organisation and don’t have a lot of in-house experience, but have ambition, drive, and a plan. Before you begin, here’s what you need to think about before getting into building the site itself. You’ll thank yourself later.
Do ask yourself hard questions about whether an online shop is the right place to start for increasing online income. For example, are you better focusing on increasing memberships online, or developing online events.
I’ve created sites on several different platforms, including Magento, Amazon, and Shopify, to selling on social media and third-party sites. So here are my top tips for starting an online shop.
Who are my customers?
This is as important as what platform you’ll use, and what products you’ll sell. Why? Because you can have a beautiful website, efficient logistics, and jaw-dropping products with juicy margins, but if you haven’t thought about who will want to shop on your site, and how you will drive that traffic to the site, you won’t get the sales.
Creating customer personas is a great way to stop thinking like an employee and start thinking like a potential customer. Ask your marketing or press colleagues if they already have these for your general visitors or ticket buyers. Give them a name, think about their demographic, job and interests. Ask yourself what their goal is when visiting your cultural venue in person, and then online. Visit Britain have some great examples of how they’ve created visitor personas to help guide their campaigns, called Pen Portraits.
Market research or questionnaires can give you a sense of what your customers want, helping to make sure they align with your aspirations and assumptions. This process should help inform what products you’ll sell online as well.
Build it and they will come is not applicable when it comes to eCommerce!
Create an Omnichannel Strategy
How does eCommerce fit into the rest of your commercial or organisation’s strategy?
Before you begin get buy-in from the relevant internal stakeholders and create your eCommerce plan around existing plans if possible. This will help build what’s rather grandly called an omnichannel strategy (don’t be put off).
What does this mean? Creating an integrated experience for your visitors and shoppers, encompassing every touchpoint a person experiences your brand, including online and offline parts of a businesses. It can include online stores, social media, mobile, emails, in-store, and marketing.
By thinking ahead to how both offline and online visitors engage with your cultural attraction, you can work with colleagues to integrate upselling and cross-selling opportunities.
Start with the low-hanging fruit. Your organisation’s existing online visitors should be exposed to an online shop button on the homepage, and other call to actions across the site where appropriate. Appealing to your organisations core audience is going to be vital to getting traffic to your new site.
What is my goal?
What does success look like to you?
Sales, and net profit certainly. It could also be about increasing memberships or donations, or raising awareness about a certain project in conjunction with a retail offer, as much as pure profit. Be clear from the beginning what you’re setting out to achieve.
I’d recommend approaching your goals through two routes.
Firstly, what makes you special? Take time to define your USP, Unique Selling Proposition. This is your point of differentiation with all those other online shops – what makes you stand out. What do your customers care about, and why would they want to shop with you? For arts & heritage organisations this usually contains a strong message that purchases go directly back into supporting the core mission of your charity. It could also be that you’re supporting local designers and makers, or you have a zero-carbon target. Create a primary and a secondary USP if that helps, but make sure you’re clear what takes precedence. A USP needs to be appealing but also realistic and defendable.
One way I’ve found helps with this, is to try and summarise your mission statement in one sentence. Think about how you’d define your USP in a single tweet for example, with only 280 characters. Succinctness can really help focus the mind.
Secondly, set some KPIs (Key Performance Indicators) early on.
Start with what your average order value (or AOV) could look like, plus how many sessions you could achieve per day, week or month. This will help inform a realistic net income and profit figure for your first budget. Once you’ve started trading, there are other stats to be aware of, including conversion rate. Which is the percentage of visitors to your site who go on to make a purchase. Around 3% is considered a healthy figure.
Invest in Digital Marketing and Comms
Every successful eCommerce strategy needs to think about how to attract potential customers before the build, not after.
What percentage of your online visitors come from your venue’s homepage, from members newsletters, adverts or social media?
The first point of call should be your colleagues in charge of your existing marketing and comms strategy. Build a case for eCommerce inclusion in their comms that appeals to the core mission of the organisation, and remember to stress profits you make go back to funding the charity. This could include suggesting using existing social accounts to open up commercial possibilities. Instagram and Facebook for example have built-in shopping functions which help promote products to a wider audience.
Even with in-house support, will you have budget to work with any external agencies or freelancers to help you create a digital marketing strategy?
Build a database
Let’s be realistic for a second – in the beginning traffic isn’t magically going to arrive on your site. Think carefully about what your organisations strengths are when it comes to communicating with hardcore fans and members, then the local community, and then the wider world. Your first priority should be a database.
It’s likely your organisation will already have a database of contacts who have interacted with you in some form, and given permission to be contacted. Speak to colleagues who own the communications strategy and they will be able to tell you what existing terms and conditions will allow, whether or not you can promote products to via existing comms.
Ideally you’ll build a sign-up form on your online shop to start building contacts from visitors to your site. Make sure you understand your GDPR and privacy policies before doing this.
Create a site and run it based on what the user, your customer, wants. Not you. Not your boss. Not your organisation. Your customer.
Think about your customer’s journey from landing on your site, browsing products, placing an order, all the way to looking at how they’d get a refund and what a confirmation email looks like. I’m a big fan of the ‘three click’ rule. Can a user find what they’re looking for in 3 clicks or less? Whether it be how long will an order take to arrive, what are the opening times of your shop, or going from a product page to payment. If it takes too long or it’s overly complicated, shoppers get bored quickly and go elsewhere.
You may come across the term User Experience (UX) when designing and building a site. This is a topic in itself, but it’s fundamentally about creating a website which seduces visitors to stay, explore, and purchase. A website with good UX will build confidence and trust in your service, and is key to starting to build a relationship with your customers. Be aware this doesn’t just include product pages and a homepage. Think about how your products will be packaged, and the tone and message in your confirmation emails.
eCommerce is a balancing act, between extracting the most profit from a purchase, with a smooth and pleasurable experience.
eCommerce is not physical retail. So don’t expect what works in-store to work online. Think back to your customer personas – what products are they looking for, and do they speak to your USP? Will your physical store’s products translate to online shoppers? Build on a core range, test what works, and then expand. There are online-only products options, such as print-on-demand and drop-shipping, but if you don’t have the resources to explore these areas, they can come later.
For example I worked on an eCommerce store which had a significantly higher AOV than the physical shop, and would sell more products at a higher price-point. This was mainly because 1) online was able to sell print-on-demand (POD) prints with higher prices than would be possible in store 2) it was impractical for customers in-store to purchase and carry away larger, heavier, and often pricier items given it’s central city location. These sold far better online, so the online offer was developed to reflect these trends.
Low-risk products with high margins, that are easily shipped, are the way to go if you’re not sure where to start with your existing inventory, although make sure they are curated with both your USP and your intended audience personas in mind.
Pay attention to postage
As customers, we can be a demanding bunch these days. Free shipping, text notifications, and courier tracking are becoming expected as standard.
So before you start, ask yourself how you’ll manage shipping. Can you afford to offer free postage? This can boost your conversion rate, but it eats into your margins. Will you offer express delivery and tracking, or are you using a standard Royal Mail delivery? This will all affect your bottom line.
Clarity is key in keeping customers on side, and making sure you don’t lose them during the checkout process. Nobody likes getting to the payment stage to see an unexpected postage cost on top of your order. So whatever you decide, make sure postage is explained clearly and succinctly throughout the customer journey. Make it easy to find and understand, rather than hiding it away in the footer menu.
Host in the cloud
Look for a cloud-hosted platform, sometimes called SaaS (Software as a Service). This is simply a way of delivering a service, such as ecommerce, over the internet, rather than installing or maintaining anything on-site like servers. If you’re setting out to build a site from scratch and don’t have much budget or in-house knowledge, it’s much better to go down this route.
You won’t have to worry about security updates or any complex hardware for example. You can just get on with running the business. For example Squarespace, Shopify or WooCommerce will do this for you.
This shouldn’t take much time to work out, but it’s an important one to tick off the list.
That’s it, those are some top tips to getting started. Want more detail on how to start an eCommerce business? Have a look at the Cultural Enterprises Academy course eCommerce Essentials.
Tom Dykes is the Director of Digital at the Association for Cultural Enterprises, responsible for communications and digital content, including the Arts Council funded Cultural Enterprises Academy. Based in London, Tom previously worked at the National Theatre.