With the advent of the Internet, firms can be open for business 24 hours a day, seven days a week; finding new customers and clients has become a doddle. Not surprisingly then, many small- and medium-sized companies in Ireland have been quick to establish a presence online.
However, few Irish SMEs have been brave enough to take the plunge and fully embrace e-commerce. Instead, most firms have been content to set up ‘brochureware’ sites — websites that contain the same kind of basic information that you’d find in a company’s brochure.
Although these sites can be valuable in advertising your company’s existence, they don’t allow new or existing customers to purchase your firm’s products or services. Chances are that if any of your competitors allow people to buy via the Internet, they’re going to be making money at your expense.
Mike Parkinson, head of EMEA development with online payment specialists, Worldpay is clear on the benefits of online business. ‘If you have an e-commerce website, your shop is open 24 hours a day and you benefit from periods of enhanced demand,’ he says. ‘For instance, we know from surveys that peak online buying time is at about 8pm on Weekday evenings, while Sunday afternoons also score highly. High street traders without an e-commerce site cannot benefit from these peaks, but online traders can. The Internet is very good at translating buying impulses into there-and-then purchases and so if you are selling online, there’s a good chance you will benefit from this.’
Moreover, not only can the Internet enable you to sell during hours when your store would be closed, using the Net as a sales channel can save you hassle. Chris Barling, CEO with Actinic, a company that supplies SMEs with boxed e-commerce software, explains: ‘there is often less hassle with orders that come via the Internet because usually, when someone sends an order via e-mail or the phone, they often make mistakes — adding up something wrong, not including the right contact details etc — whereas with online order forms, it’s almost impossible to miss out vital information when ordering because customers can’t proceed unless they have filled out certain details and they can look over the inputted information before submitting’.
Even with this knowledge, small and medium sized businesses in Ireland have so far shown a marked reluctance to engage in proper e-commerce. A comprehensive Chambers of Commerce of Ireland survey on e-business, released last year, found that while most SMEs agreed that e-mail and brochureware websites are important, few companies thought that engaging in e-commerce was essential.
There are a number of reasons why firms have been hesitant about opening up a new sales channel through selling online. The slowness with which broadband is being rolled out around the country is obviously one, while security concerns are another. But a key reason is a fear that the technology needed to obtain e-commerce capabilities is overwhelmingly expensive.
‘There is a natural wariness about processes that are virtual rather than physical — it’s understandable,’ says Mike Parkinson. ‘However, we also know that in Ireland there is a perception that being involved in e-commerce entails massive outlay on hardware, which just isn’t the case because you can outsource all your hosting, catalogue and online payments needs, so that hardware is an issue you never have to worry about.’
One step up from ‘brochureware’
According to Alan Devlin, commercial director with the Web design firm, Webfactory, if your company already has a ‘brochureware’ site up and running, it can be easy to upgrade the site so it can process orders and accept payment online. ‘Obviously it all depends on what your current website looks like as to whether it will be easy to upgrade,’ says Devlin. ‘But if you’re happy that it conveys the right amount of information, you can just build another layer into your navigation — such as putting a big “buy now” logo on the site that will bring Internet users to a new website where they’ll be able to purchase your goods and services.’ Many companies now offer so-called ‘storebuilder’ products, such as Actinic, which enable SMEs to move from static brochureware websites to e-commerce ones. Usually, these will include a shopping cart facility, a payment mechanism and a number of templates; no real expertise is needed to get them up and running.
Not surprisingly, many SMEs are a bit nervous about taking financial transactions via the Net. But do they really need to be? According to Alan Duffy, a Web developer with design company Nevada, setting up a full e-commerce website that offers transactions through banks can be expensive, particularly as some financial institutions don’t freely offer Internet Merchant Accounts to smaller companies. ‘But most SMEs don’t really need to go down this route and there are plenty of other options available that are more cost-effective and easier,’ he says. ‘The payment service provider, Worldpay for example, provides e-commerce facilities for small companies, which means that when someone is purchasing a product from your site, they are transferred to the Worldpay server so the merchant never sees the credit card details and need not worry about it at all.’
However, it’s not just the actual online financial transactions that concern SMEs; many are also worried about how they can protect vital business information and safeguarding themselves from online fraud. We’ve all heard reports about computer hackers defacing websites and stealing important data, but is this something that small and medium sized companies should be nervous about? Not according to Alan Devlin. ‘The security issue has been overplayed over the years because it’s never been as big a problem as the media portrayed,’ he says. ‘The media has tended to focus on the security risks associated with having an e-commerce website simply because they get a better response from scaremongering than from saying that online shopping is relatively safe.’
Make it as easy as possible
Not every company has products that are suitable for selling via the Internet. But if your firm does and you’re interested in opening up a new sales channel, you first need to consider whether you’re interested in selling primarily to existing customers here in Ireland or if you also want to get new ones from here and abroad. Additionally, your company will have to decide whether it’s selling to companies or consumers. You’ll also have to ensure that you make it as easy as possible for customers to buy from the website and so it is essential that the online store isn’t a nightmare to navigate. ‘It should take a minimum of clicks to purchase from someone’s site,’ says Alan Devlin. ‘However, many online stores forget this basic rule and force online shoppers to keep inputting information. This only puts the buyer off and makes it more likely that they’ll abandon their shopping cart before completing the transaction.’
Search engine optimisation is obviously important if you want to alert people to the fact that your company is online and a great way to draw in customers is by including special deals on your homepage.
Setting up an e-commerce website is far easier than companies imagine, and the benefits of having one are manifold. Therefore, as Mike Parkinson suggests, it seems odd that few SMEs have been willing to take the plunge. ‘It is strange that there is this continued reticence because there is strong evidence to suggest that where SME e-commerce is being tried in Ireland, it is really taking off,’ says Parkinson. ‘One survey from the Irish Chamber of Commerce showed that even during an economic slowdown, Irish SMEs reported a 76 per cent increase in online sales and a 130 per cent increase in online enquiries. ‘I think a lot more education is needed because both potential shoppers and merchants need to understand the extent to which online trading is a safe medium, what their limitations and liabilities are and how they are protected if things go wrong.’
01/09/2003
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