Kaskaskia College IL Small Business Development Center April 2015 Newsletter

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1 Kaskaskia College IL Small Business Development Center April 2015 Newsletter E-COMMERCE SALES GROW SIX TIMES FASTER FOR U.S. TOP 500 MERCHANTS THAN STORE SALES BY INTERNET RETAILER, MARK BROHAN, RESEARCH DIRECTOR, April 2015 The U. S. web merchants ranked in the newly released 2015 edition of The Top 500 Guide turned in another strong year in 2015, growing web sales 16% while total U. S. store sales grew just 2.4%. Canada-based Top 500 retailers increased their online sales by 29%, well ahead of total retail growth of 4.8% in that country. It was online stores and not physical stores that spurred growth among all U. S. retailers in In fact the U.S. web merchants ranked in Internet Retailer s just-released 2015 Top 500 grew far faster than stores and overall retail in the United States in 2014, and faster than overall e-commerce growth. In 2014 the U. S. merchants ranked in Internet Retailer s 2015 Top 500 Guide grew their combined sales 16.2% to $ billion. That s more than six times faster than the growth rate for U. S. store sales, which increased 2.4% to $2.854 trillion. All merchants ranked in the Top 500 increased their cumulative web sales 15.7% to $ billion. Overall the U. S. e-commerce market grew 15.4% to $ billion, according to the U S. Department of Commerce. E-commerce in Canada also grew faster than total retail and the Canadian Top 500 web merchants faster still. Last year the 12 Canadian merchants ranked in the new Top 500 Guide increased their combined sales 29% to $1.84 billion. In comparison, total retail sales in Canada increased 4.8% to billion in Canadian dollars (US$ billion), according to Statistics Canada, the government data-collection agency, while online retail sales in Canada increased 14.8% to an estimated $17.8 billion in 2014, says Forrester Research, Inc. Once again Amazon is the top-ranked Top 500 retailer with web sales in 2014 that increased 17.1% to an Internet Retailer-estimated $79.48 billion. Amazon reported net sales of $88.98 billion in 2014, a 19.5% increase from nearly $74.45 billion in But to make a cleaner revenue comparison with other Top 500 merchants Internet Retailer backs out revenue that is not directly associated with the online sales of physical goods or digital content, such as its out revenue that is not directly associated with the online sales of physical goods or digital content, such as its Amazon Web Services unit that provides web-based data storage and

2 serve capacity. Overall, Amazon accounted for 31% of all U.S. Top 500 sales and 26.1% of all U.S. e-commerce sales. Led by Amazon, North America s biggest Top 100 merchants, and especially the Top 10, once more account for the vast majority of all Top 500 Sales. In 2014 the collective sales of the Top 100 grew 15.8% to $ billion, representing 85.9% of Top 500 web sales. The top 10 increased their combined sales 167% to $ billion and accounted for 59.7% of all Top 100 sales. There was a considerable consolidation and acquisition activity among Top 100 merchants, resulting in some big jumps in top-line growth. Even though Staples, Inc. (No. 4) and Office Depot (No. 6) are ranked separately in the 2015 Top 500 guide because their proposed $1.17 billion deal announced in February has yet to be finalized, a combined Staples/Office Depot operating under the Staples brand would have combined Internet Retailer-estimated annual web sales of $15.53 billion and total combined sales of $34.35 billion. Those combined numbers would make Staples easily the biggest office supplies retailer online and off, and would move Staples ahead of Wal-Mart Stores, Inc. as the No. 3 online retailer in the top 500. Breaking down Top 500 retailers by their primary sales channel, web-only merchants once again accounted for the largest number of Top 500 merchants, 193, and the most sales, $ billion. They also grew their online sales the fastest at 18.1%. It is worth noting that while Amazon continues to dominate the e-retail market it grew more slowly than the other web-only merchants in the Top 500, which together averaged 19.8% growth versus 17.1% for Amazon. The 154 retail chains in the Top 500 represented the second-largest merchant segment, and they collectively grew e-commerce 16.1% to billion. The 76 consumer brand manufacturers were up by a combined 12.3% to $40.99 billion. The Top 500 merchants with the slowest collective annual growth rate were the 77 catalog and call center companies, including such TV shopping channels as QVC and HSN, which grew year over year by 8.8% to $29.67 billion. (Taken from INTERNET RETAILER, April 13, 2015 by Mark Brohan, Research Director) EIGHT STEPS TO SOCIAL SELLING BY Shawn Hessinger, In Social Media You ve built up your Facebook likes and Twitter followers. You ve been circled on Google+ and you ve got people following your pin boards on Pinterest. You re building relationships and engaging on social media, and you re thinking it may be time to take it to the next level. Did you know that you could actually sell from some social media channels, such as Facebook? Social selling is a growing trend, according to Google Trends since it first started appearing in Here are 8 steps to get your business into social selling: 1. Build Relationships First: One of the quickest ways to turn people off is to launch into hard selling from social media accounts, right out of the gate. Social selling is not something you do immediately. It takes time to build up to. Start with developing relationships and get some engagement traction on social media. Once you have followers engaging, evaluate whether your followers are showing interest in buying from you via social sites. For example, are people inquiring about how to buy from you? Have they asked via social about the status of orders they ve placed? Is word of mouth spreading via social media? Are your brick-and mortar customers talking about your discounts and special deals they

3 learned of through social media? If this and similar activity is happening, then it is suggested your customer base is ready to go to the next level and actually buy via social platforms. 2. Focus on Where Your Target Market Spends Time: Make sure you actually know where your customers, both current and potential, spend their time online not just where you think they spend time. Are they aficionados of Facebook? Do they spend hours pinning items to Pinterest? Are they Twitterholics? Oh, and remember, it s not about where YOU LIKE TO SPEND TIME, BUT WHERE THEY DO. Use social media analytics to analyze how much interest your social media posts on various sites have generated. Look, especially, at social posts about special offers, new product launches and similar sales-related activity. Are your followers engaged on these types of updates? Also, check out your competition to find out which social channels they have developed and where they seem to have traction. That may give clues about where your target market spends time. Here s the essence of social selling: Give customers what they want where they are. Put a store on the social site where your targets spend their time. 3. Find a Storefront App like Ecwid or Cashie. To create a storefront on a social media platform, one of the easiest and most seamless ways is to choose an app that makes it easy like Ecwid or Cashie. For example, you can find e-commerce apps that let you sell from a tab on Facebook, and across multiple platforms including your blog and mobile devices. Many of these are simple to set up and easy for customers to use on mobile devices. When choosing a storefront app for social selling, look for: Low fees look for apps that tailor fees to small business pocketbooks and charge flat fees for use of the software, so that costs are predictable. Customized to your industry: You want a layout and look applicable to your industry, not some other industry. Fee trial: With a free trial you can better evaluate the app to see if it is easy to use, whether it contains all the functions you need, and whether it integrates with other systems you use. A free trial that doesn t require a credit card to set up keeps it risk free while you evaluate it. Centralized inventory management: You want an app that controls your inventory across ebay, Facebook, your website or wherever else you decide you want to sell. Storefronts in different places without centralized inventory is a recipe for mass confusion. Flexibility for growth: Look for a store app flexible enough to grow with you. How easy is it to add new product and service categories, more options, and otherwise tailor it? Is it easy to upload and change products? Multiple ways to pay: Give your customers more payment options. They ll give you more sales. So be sure the app you select offers numerous payment methods credit cards and PayPal among them. 4. Test, Test, Test! Anytime you try something new like social selling, you want to make sure you have the glitches worked out. Test it before you open it up to the public at large. Ask family members, friends and colleagues to go through it as if they are buyers. Get at least three external opinions.

4 Make sure all functions work. Test usability issues, too, for stumbling blocks that get in the way of a satisfying buying experience. Some of the things to test for are whether: Items are saved in the buyer s shopping cart if he or she leaves and comes back. A reminder is generated to prompt them to compete the order, if they don t return after a certain period, Payment goes through promptly, and Confirmation s are generated Checking these and other points will ensure your social selling effort is ready for prime time! 5. Create Great Social Offers: For social media, create offers that make people feel special. David Peck, head of social media for PayPal, suggests you stick to a simple rule when putting out offers on social media: First, best, or only. If your offer doesn t have one of those elements, don t post it. Limited time discounts can also be very enticing. Offers on social media have the added benefit of potential vitality. In other words, people share great offers with friends, which helps spread the word. Here are some special tips for social media promotions: Change your Twitter or other cover image to feature an item on sale, or a funny image about how time is running out on your big sale. Share your offer across platforms, and use the special cover image you created, as part of what you share. Use a secret discount code in a follow-on update, just for those who read your updates. They will feel like they found something in a treasure hunt. 6. Enable, Encourage, and Share Customer Reviews: Customers like to be heard. And buyers today expect to see reviews. Don t be afraid of negative customer reviews. It can provide helpful feedback for you to improve. Also, a fast response to an unhappy customer is an opportunity to show that you pay attention, that you care, and that you are willing to do what it takes to satisfy the customer. 7. Get People to Your Social Media Store: Keep customers coming to your online storefront with followers only specials. In other words, provide special discounts and deals only on Facebook or Twitter, and nowhere else. This will get people to follow your social account in order to get the deals. Here are some other tips to remember: Make it easy for customers to find you. For instance, remember to include links to your store everywhere customers might look for information on your brand. This includes your Twitter and Facebook profiles, of course. But it also should include every piece of company you send. Keep in touch even after the sale. Let past customers know you are still thinking of them and give them an incentive to return. For example, you can past customers with updates on your current specials. You might also supply them with secret discount codes. This rewards them for their support in the past and offers them a reason to become a repeat customer.

5 Don t be afraid to advertise. Consider buying some ad space or investing in sponsored posts on social media channels. Make the buys conservative at first. Consider them an experiment to see whether advertising on social media is an effective strategy for your business. Depending upon the results, you can invest more heavily and hone your campaigns. Make your customers the stars. Collecting customer feedback is one of the major benefits small businesses get from social media. But you can also repurpose that feedback and use it to market your social selling efforts. If customers share photos of their favorite product or service, ask to post them to your Pinterest, Instagram, Twitter and Facebook channels. You can then tag these photos so your customers social connections can see and tag them too. What a great way to draw more traffic to your store! Give to Get. Customers like freebies too. But don t worry. You ll more than make back your investment in the long run. Offer perhaps 10 gift items from your store and watch the spike of new likes on your Facebook page. Some of those will surely translate to sales in the future. 8. Measure Your Success: Adobe Digital Marketing Suite helps you get the most out of your marketing campaigns by using key performance indicators to measure the efficiency of your marketing efforts. Google Analytics helps you measure sales and conversions. What could be more important than figuring out which of your efforts are actually generating revenue? Boosting your brand is fine, but this will let you know what campaigns are working for your bottom line. Bluefin Labs, a Twitter property since 2013, measures campaigns in another way. It looks at social media mentions to figure out how customers are engaging with online marketing campaigns. But it also looks at viewer engagement with things like TV shows and TV ads, too. In this respect, it probably offers most small businesses a wider perspective than they might ever need. Most social selling app developers Cashie Commerce and Ecwid, for example have their own analytics, too. Use these to figure out from where exactly your sales are coming. Social selling can be a very successful way to market your products online, but effectiveness depends upon taking the proper steps. For more information, download the PayPal e-book Your Guide to Social Selling. (Taken in part from 8 Steps to Social Selling, by Shawn Hessinger, Small Business Trends In Social Media)

6 OPEN THE DOOR When you are ready Open The Door and make it easy for people to become your customers. First, figure out ways for them to test-drive your product or service. The point is to communicate a respectful and flattering philosophy to your prospects: I think you are smart, so I m not going to bludgeon you or trick you into becoming a customer. Try it, and then you decide. Second, remove all the speed bumps to buying your products or services. In the online world, an obvious example is CAPTCHA, a security step in the registration process that forces people to prove they are worthy before they can sign up for an account. Here s a good example of removing obstacles: Rather than making you go over the speed bump of setting up an appointment, one solar-panel company asks you for your home address and then looks you up on a satellite photo to create an estimate. What speed bumps can you remove to deliver a smooth customer onboarding experience? Generosity goes in both directions. This may come as a surprise, but you can ask your customers for help getting more customers. If they like your product or service, they will want you to survive, and one way to ensure this is to encourage others to do business with you. The key to receiving help, though, is to provide a great product or service in a generous non-paranoid way. This creates what s called a virtuous cycle. While it may take a while to put every piece in place, following these recommendations will set your company down the path of growth by winning over customers who not only want to buy from you, but are eager to do so. WINNING CUSTOMER CHECKLIST SELL SOMETHING UNIQUE AND VALUABLE that customers can t get anywhere else. FOLLOW A COMPELLING MANTRA that customers can relate to. FOCUS ON EXISTING CHALLENGES to better benefit the customers. BE AS GENEROUS AS POSSIBLE. MAKE IT EASY for customers to do business. (Information taken in part from OPEN Forum, an online community designed to help small business owners find new ideas that can make a difference for their businesses. For more conversation go to OPENForum.com.) STEVEN GRONER, DIRECTOR, ILLINOIS SMALL BUSINESS DEVELOPMENT CENTER, KASKASKIA COLLEGE 325 S. Poplar, Centralia IL 62801; ; sgroner@kaskaskia.edu RILEY BARKER, BUSINESS SPECIALIST; CERTIFIED QUICKBOOKS SOFTWARE INSTRUCTOR ILLINOIS SMALL BUSINESS DEVELOPMENT CENTER, KASKASKIA COLLEGE 325 S. Poplar, Centralia IL 62801; ; rbarker@kaskaskia.edu Funded in part through a cooperative agreement with the U. S. Small Business Administration, the Department of Commerce and Economic Opportunity, and Kaskaskia College.

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