SMEs step up e-commerce ventures under shadow of Covid
The demise of the high street has been well documented, but for online retailers, business is booming. E-commerce sales accounted for 33% of all UK retail sales in 2020 and this is predicted to increase to 39% by 2025.
The pandemic is having a significant impact, with many physical stores forced to close for long periods and consumers flocking to websites to do their shopping. Some retailers were already well established online and could take the opportunity to grow during the pandemic; for others, Covid-19 was the catalyst for taking a first foray into the world of online selling.
Promoting women artisans
Sarah Alloui was one of those who launched a new retail venture during the pandemic, starting Moroccan textiles business Moussem in November 2020. Moussem, which sells hand-crafted Berber rugs, throws and cushion covers, was established to promote the Amazigh culture and the work of women artisans.
“When I launched my business, selling online played a vital part in allowing me to operate,” Alloui. “I set up Moussem online using Square’s free website builder, which allowed me to establish an official online presence, take orders and market my products efficiently.”
Alloui initially ran the business as online only, selling via her website and Instagram, but with restrictions now eased, she is also selling her wares at pop-up events. The ability to hold pop-up stores has been useful to enhance customer relationships, she says.
“But with rugs starting from £175, it’s unlikely people will pay with cash, so as I start to take Moussem to more in-person events and pop-ups, I need an easy and cost-effective way to do that,” she adds.
For this, Alloui is using the Square Reader, a plug-and-play system with no contract. Customers can pay easily by card, offering the contactless payments option that has become so important during the pandemic, and payments come through to her account quickly, offering a clear insight into cashflow and sales.
Alloui is now looking to expand her product offering with more hand-made Moroccan items. “Moussem was founded this time last year, and the response to the brand has been incredibly positive,” she says. “As a result, I left my day job in proptech to pursue Moussem full-time, build my business and forge strong connections with Amazigh artisans in Morocco.”
For some more established businesses, the pandemic has proved an opportunity to grow. BAM Bamboo Clothing has been in business since 2006, selling through its website directly to consumers. BAM saw a 50% growth in customers during the pandemic.
“Consumers spending more time at home and online helped us,” says Ryan Shannon, managing director at BAM. “Our advertising and catalogues were received by an audience with time on their hands. At the same time, more disrupted businesses and sectors reduced their advertising, meaning we had a greater share of voice at lower costs.
“Pre-pandemic, our marketing plan was already very digital-focused. This meant we were able to change our plans quickly in line with changing consumer behaviours.”
The core of BAM’s business is its website, which is based on WooCommerce – an open-source e-commerce plugin for WordPress – and enhanced with various plugins.
“We have other tools and tech that work alongside our website to provide additional functionality, insights or performance and experience enhancements,” says Shannon, “for example, our personalisation tool Dynamic Yield and our user experience and site performance tool Content Square.”
Ryan Shannon, BAM Bamboo Clothing
The business has its own in-house, UK-based customer service team, but it has found people are now moving away from the telephone and want to engage via their chosen channel.
“This has resulted in a significant increase in inbound email to our customer service team, and others choosing to use text, WhatsApp and social channels to talk to us,” says Shannon.
BAM has recently implemented the Freshdesk platform to manage this multi-channel customer service environment. The retailer also uses Feefo’s survey tools to measure its Net Promoter Score, assessing the level of customer satisfaction over time but also providing a way to benchmark its performance against other brands and sectors.
Looking ahead, Shannon foresees some things changing for ever as a result of the pandemic – the proportion of people shopping online, continuing to be more active and taking better care of themselves, and a brand’s impact and sustainability credentials continuing to grow in importance to consumers.
“The pandemic forced us to be more flexible across our business and our entire supply chain,” he adds. “These skills, processes and ways of working will remain with us, and provide a more agile platform for growth moving forward.”
For Cornwall-based candle-maker St Eval, there has been a shift away from being a predominantly B2B business – selling via other stores – with a small chunk of direct-to-consumer sales. When the pandemic hit, the firm saw all of that business shift across to the B2C channel. Fortunately, St Eval was ready to deal with this change thanks to a digital transformation project four years ago.
When managing director Harry Young-Jamieson joined St Eval in 2017, he was tasked with looking at the firm’s digital and IT systems and infrastructure. “Quite quickly, we identified that our ERP [enterprise resource planning] at the time wasn’t really fit for purpose – it didn’t have the support behind it that we needed to grow,” he says. “So we quickly went out and looked for a potential replacement solution.”
St Eval chose SAP Business One, as the platform offered everything the firm was looking for and could support the integrations it required. A big factor was also SAP’s partner Codestone, whose values and culture aligned with St Eval’s.
“There were a number of integrations that we required the system to do for us,” says Young-Jamieson. “Alongside putting in the ERP, we put in two e-commerce Shopify stores. We were on a different, much more complicated platform before that, where it might cost £30,000 to make a number of changes.
“I and my marketing manager put in two Shopify stores with a local developer for £8,000. It’s a much more user-friendly platform, much more accessible, and very scalable as well.”
The project kick-started St Eval’s digital transformation, and the firm has since added courier integrations with FedEx and DPD and connected its helpdesk ticketing system with the SAP ERP. More recently, as fulfilment has became a constraint due to the pandemic, the firm has outsourced some of its e-commerce fulfilment to a third-party logistics (3PL) provider.
“We’ve experienced about 30% sales growth year on year for the last four years,” says Young-Jamieson. “A big part of that is down to our service levels improving dramatically, thanks to these systems we’ve put in.
“Three or four years ago, our lead time would probably be about 10 working days at this time of year. We’re on a one-day lead time right now across the board, and it’s with these tools that we’ve been able to do it.”
Bookshops venture online
For those retailers that relied on the high street for trade, the pandemic has proved a huge challenge. This was the case for Rossiter Books, which runs three small, independent bookshops.
“The first lockdown was really hard – 99% of our sales were from sales of books in our stores, so when the first Covid lockdown came, we were ill-equipped to trade in any way,” says Andy Rossiter, who co-runs the bookshops with his wife.
“We had a website but it was not fully transactional as we only sold signed copies and special editions from it, rather than attempting to list our entire stock.”
With its three shops shut for months at a time, to survive the pandemic, Rossiter Books needed an online presence – and quickly. Rather than launching its own site, Rossiter decided to sign up to Bookshop.org when it launched in the UK in early November 2020.
“There are hundreds of thousands of books available at any one time, so it is a massively complex business trying to keep all of that information on price, availability and book jacket updated,” he says. “You’re up against one of the biggest companies in the world in Amazon, so to persuade people to shop with you, and to not annoy them with the experience, you have to offer a slick, attractive and user-friendly website.
“This is what Bookshop.org delivers and along with its compelling structure of supporting independent booksellers, we were quickly persuaded this was for us. The range of 600,000 books and the really attractive website where you can customise your own storefront make this an incredible resource to independent booksellers.”
Andy Rossiter, Rossiter Books
The idea behind Bookshop.org, which operates in the UK and the US, is to help independent high-street bookshops get a share of the online market, but in an easy and cost-free way. Book sellers can set up a profile on the Bookshop platform in about the same time it takes to set up a Twitter profile, with no need for any integrations or HTML coding, and at no cost to them.
When Rossiter Books makes a sale, it gets 30% of the cover price as commission without having to manage or process that order – it is fulfilled by the main Bookshop business.
Instead of dedicating resources to picking, packing and posting books out, Rossiter can use that time to focus on the physical stores, and mirror what they are doing with book selections in-store by producing lists that appear on its store front on Bookshop.org.
“We were the sector that got hit first and hardest by Amazon, so to see the rising numbers of independent booksellers in the UK, boosted by this ability to now trade successfully online, is a fantastic development,” says Rossiter.
As well as supporting independent bookshops by offering them their own online storefront, Bookshop.org runs its own e-commerce site, selling books direct to customers. But it still shares the profits with booksellers – customers can either choose a specific bookshop to support when ordering, which then receives 30% of the cover price; otherwise 10% of all cover prices is evenly distributed among bookshops each month. So far, £1.85m has been shared out to booksellers.
However, Nicole Vanderbilt, managing director of Bookshop.org UK, points out that this figure is still a small portion of overall book sales, and the firm is constantly looking to technology to increase its share.
“We are very proud of that £1.8m, and we’ve sold £10m worth of books in that time,” she says. “But that is still less than 1% of the overall market. Our belief is that working with the bookshops and the publishers, there are many, many more readers that we can attract to this model.
“Some of that will be with the somewhat unsexy stuff, like launching a new checkout – which we will shortly – and increasing our search algorithm. But some of it, we’ll also be trying to stay ahead of things, like how can we bring the humans that are so special to these independent bookshops together with technology to make things even better online.”
Vanderbilt adds: “In some ways, it’s daunting to compete with Amazon in selling books, as that’s where they came from. But in other ways, surprisingly, it’s not that daunting because they just haven’t done very much in this space. They’re not very good at that part of pulling together people and technology to drive discovery.”
Although there has already been a huge rise in online shopping, according to Miya Knights, retail technology consultant and author, the impact on our high streets is probably only part-way through the shift to online. Larger stores are likely to be the most adversely affected, however.
“Chain and multiples retailers are still largely overstored and underperforming in a world where the rate of online sales growth has rapidly accelerated during pandemic lockdowns,” says Knights.
“On the other hand, small businesses are better positioned to rebound with relatively less exposure to international policy and supply chain volatility, while also capitalising on potential e-commerce sales growth.”
With e-commerce forecast to increase even further over the next few years, smaller retailers can only benefit from investments they make to support their online ventures, whether that’s upgrading an ERP system or turning to a provider like Square.