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Capturing the Christmas cheer: How SMEs can keep the festive spirit going all season long

by Bailey Amber
written by Bailey Amber

Every year, businesses across Australia gear up for peak season, a three-month period dedicated to the biggest sales of the year.

With Aussies predicted to spend a whopping $63.9 billion in pre-Christmas sales, customers are locking in those shopping carts in preparation for the biggest deals and the most wonderful (and often expensive) time of the year.

But the onslaught of demand can often catch small businesses out, meaning the first months of the new year are spent chasing your tail.

Without the proper preparation, SMBs often work right around the clock, leaving little to no time to organise for the new year. 

I work day-in-day-out with small businesses and understand the (not-so-jolly) challenges that this time can bring. So, to give back to our community of SMBs, I am sharing my top tips to help keep the festive cheer alive this Christmas season and right on into 2023.

Prepare, plan and predict

While Black Friday and Cyber Monday are behind us, the countdown’s on to Christmas and the promise of extensive Boxing Day sales, where Aussies are predicted to spend an average of $711 on gifts and items.

Beyond this, while things calm down in January, being organised and knowing how to take advantage of the busy period means less time spent in chaos and more time spent planning for what’s to come. 

So how can SMBs prepare? A good start is to look backwards – take a look at the performance of these sales periods in years gone by and use these insights to identify the most popular stock.

This information can then be used to predict popularity in this year’s sales to ensure there’s plenty of stock to meet demand and be prepared at the earliest possible convenience for 2023. 

As inflation continues to soar, 51 per cent of SMBs we surveyed revealed that their top business challenge is the impact of the rising costs of products and services.

With delivery and stock delays expected to plague us well into 2023, ordering packaging satchels in bulk means reducing costs and planning well in advance for the year to come — you might also get a cheeky discount as stockists start to clean out the inventory for the end of the year! 

Investing in personalised and sustainable packaging such as beautifully designed products from noissue can also help your business to stand out from the competition and is a great way to surprise and delight customers. 

To save time when things get busy, look for shipping suppliers that offer options for batch orders with bulk editing tools and can deliver from door-to-door, saving you from spending unnecessary time in line at the post office.

Simple tactics like this will allow you to focus on other important tasks, such as customer service or marketing, while also driving customer loyalty with speedy product delivery. 

Gifting customers a winning experience 

With the holiday season in full swing, it can often feel like there isn’t enough time in the day. But making sure your customers remain priority number one and delivering a superb customer experience is incredibly important during the festive season and beyond.

Our new research into the state of small businesses has found that nearly half (46 per cent) had planned on gifting customers with free shipping this peak season and aim to continue with free shipping well into 2023. We know that free shipping helps to minimise cart abandonment, but it’s also a way of saying thanks and giving back to the community’s continued support. 

Keeping your communications proactive and transparent can also help to build loyalty and trust. Making sure your website, social media, and emails are up to date means your customers feel respected and can avoid disappointment from missing out on best-selling items. Building this relationship now means as we move into 2023, your customers will be by your side, no matter what. 

Let your customers know that the delivery gap is closing this week, and it’s their last opportunity to get gifts under the tree in time for December 25! Our domestic delivery cut-off dates are this Thursday, 15 December, for short-haul national deliveries and Monday, 19 December, for same-city deliveries.

Customer-friendly shipping and policies

With one in two Aussies actively looking for greener products or services, SMBs can support their customer’s intentions by investing in more sustainable services for a more eco-friendly future in 2023. For SMBs, the bottom line is important, but going green can cost less. Leveraging supplier partners who have sustainability baked in is a simple way to become more sustainable without making big (and expensive) changes. 

Using a carbon-neutral shipper is one way, or buying sustainable and recyclable packaging from noissue or Better Packaging Co can also help. Buying products locally that you may need can also help to reduce your carbon footprint, reducing the time items spend in transit. Sustainability is only going to become more important, so why not start now?

For SMBs, December is one of the busiest times of the year. With the right preparation and thoughtful customer care, small businesses will be well-positioned to keep the Christmas cheer alive and prepare for 2023 in the best way possible. By prioritising organisation and communication, you can gift shoppers a winning customer experience, launching into the new year with strengthened customer relationships and loyalty that lasts long after the silly season is over.

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Business

Online reviews could make or break your retail business this holiday season

by Bailey Amber
written by Bailey Amber

With one week until the beginning of the Black Friday and Cyber Monday shopping period, the Australian Retailers Association predicts that Australians will spend a record $6.2 billion over the four-day shopping weekend, up $200 million from 2021. 

The annual Black Friday and Cyber Monday discounts, which were first made popular in the US, are now more anticipated in Australia than Boxing Day sales.

Undoubtedly, this year’s Black Friday, Cyber Monday, and Small Business Saturday will be entirely different from previous ones. The fourth quarter of the year is said to be the busiest and most lucrative for retailers because it is the last quarter of the year. 

Retailers’ online sales have increased dramatically this year, thus, converting their operation to a flexible e-commerce platform will satisfy each customer’s fluctuating traffic needs. 

The minimum star rating the average Australian will take into consideration is 3.5, according to research from the communications and payments platform, Podium. Twenty-eight per cent of Australians will read a business review while standing outside before deciding whether to enter.

Key findings:

When it comes to choosing a business, 84 per cent of Australians are influenced by Google reviews, while 44 per cent are willing to travel further and spend more to visit a business with superior evaluations. 

  • Fifty-one per cent said that a business’s answers to reviews had altered their perception of the business. 
  • Pre-Covid, 46 per cent are more likely to glance at a local business’s Google listing before visiting; 
  • Since the pandemic, 69 per cent of Australians have read reviews to verify the health and safety of local businesses. 
  • Sixty-nine per cent of Australians believe that employee attitude is the most likely reason for leaving a one-star review. 45 per cent of local businesses say that online reviews are “very important” to their business’ success;

Dave Scheine, Country Manager, Australia at Podium, notes that consumers today are increasingly digital-first, using online channels to research, engage and build relationships with their favourite local businesses. 

“In the discovery phase, word of mouth is still essential for local businesses, but today that word of mouth is digital in the form of reviews. For consumers, reviews are relatable and authentic, and genuinely influence their decision to engage a business, whether they’re a high street retailer, a hair salon, a tradie or something else entirely. 

“Shopfronts are still hugely important, particularly for retailers, but those who rely solely on footfall and physical location during the peak season will struggle to compete with the retailers who are using great reviews and a digital presence to engage consumers online. 

Dave emphasises the significance of online reviews and argues that a business doesn’t exist for customers if it doesn’t have a website or if it does, but it has negative reviews.

Podium research shows that local businesses who have optimised their Google Reviews will be better placed to succeed and facilitate meaningful experiences with the millions of Aussies who love supporting local businesses.

“A retailer might have beautiful products at great prices, but that counts for little if consumers can’t find them when searching for ‘best toy store near me’ or ‘custom jewellers Perth’. 

“Incentivising happy customers to leave reviews is a time- and cost-effective way to drive customer retention, customer acquisition, and tap the full power of the ‘support local’ sentiment during peak season, and long after it.”

Fake negative reviews 

Customers are increasingly relying on online customer reviews to make more informed purchasing selections. This is a welcome thing as long as the neutrality of the reviews is maintained.  However, falsely negative customer reviews that are motivated by a personal dislike for a business or its employees and are posted on a review platform can cause considerable damage. 

Businesses that receive falsely negative ratings can file a complaint with the review site and the proper regulatory agencies.

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BusinessEntrepreneur

How to increase sales even if your marketing budget is decreasing

by Bailey Amber
written by Bailey Amber

Australia’s local retail businesses are heading into peak season as consumers take advantage of retail events, holidays and end-of-year celebrations.

This year, however, the rising cost of living, ongoing supply chain disruptions, and the anticipation of further inflationary pressures are making businesses think a little more carefully than usual with their spending.

As a result, many small businesses are reassessing their budgets – particularly costs associated with advertising and marketing. Fortunately, with just a little bit of work, a smaller budget doesn’t have to translate into smaller sales.

Turn Google into your biggest fan

Ads on Facebook and Google have long been a go-to for small businesses due to their simplicity of creation and their effectiveness in reaching a new audience. However, there are cost- and time-effective steps you should take to make Google search work for you before you think about ad spending. The first step a prospective customer takes when they’re looking for a product or service is conducting a Google search. From there, 75 per cent of all clicks go to the top three to five results. So, it’s vital to ensure you’re appearing at the top of your relevant searches. 

By claiming your free Google Business Profile, updating it with all your information, and encouraging customers to leave reviews, you’ll be on the way to the search results. There are various metrics that impact how well you rank, but some that you can and should think about immediately are the quality, quantity, and regularity of your Google reviews and how often your business replies. 

Because your customers can help optimise your Google profile, setting yours up isn’t only cost-effective and time-effective. During peak season, local businesses don’t have the luxury of masses of time. You don’t need to do masses of heavy lifting to create a Google presence that genuinely impacts leads and sales – both immediately and long-term. Then, with your profile optimised, there’s nothing to stop you from investing in advertising when your budget allows it.

Enable your website to sell your business

Consumers today are clear on what they want: to be able to find exactly what they’re looking for quickly and conveniently. When a consumer first clicks on your website, it’s important that they can easily find any information or products they’re looking for. If they have to search through several pages or can’t immediately find a clear answer, the customer will leave and try a competitor – which is why only two per cent of website visits convert to an enquiry or sale.

Getting them to your website isn’t the end of the journey; you must convert them into customers. Webchat widgets, which allow real-time responses with either pre-programmed answers to common questions or human-managed chats for more personalised conversations, can increase website conversion rates by 20 per cent because they lead a customer to exactly what they need within seconds. 

Keep the experience convenient

From initial conversations to payments to delivery, consumers value convenient business interactions above all else.  Importantly, this includes making information easy to understand and access. For example, once a customer has made a booking or purchase, send them both a confirmation email and a confirmation text. Australians typically have their phone on them, resulting in a massive 98% of texts being opened – comfortably higher than emails opened and cold calls answered.

Meanwhile, Podium’s  Business-to-Customer Communication Report revealed that almost 50 per cent of Aussies regularly delete business emails without even opening them – making a confirmation or reminder text much more likely to be read than a reminder email. This preference for SMS can be used throughout the customer journey. Payment links are a particularly popular option, as consumers are increasingly demanding convenient payment options, and one in four consumers will abandon a transaction if their preferred payment method isn’t offered. 

Don’t miss out because the final, most important stage – payment – wasn’t flexible.

Use existing customers to create new customers

A consistently convenient purchasing journey will result in consistently happy customers. Happy customers are a business’s biggest marketing tool because they will not only turn into return customers but also inspire new customers. Remember to send an SMS prompting customers to leave a Google review. 

You can continue to remind customers of their experience by prioritising SMS marketing in your future campaigns. With 90 per cent of consumers preferring to engage with businesses through text messages, converting marketing campaigns delivered by SMS can foster more positive interactions. Just like with email marketing, there are platforms and products that can help you segment your customer base to ensure you’re sending personalised and relevant marketing messages over text. 

Remember, Aussies love their small businesses, and they’ll be fiercely loyal to a business that treats them well and communicates with them on their terms. As long as you prioritise convenience throughout the customer journey and keep up communication, you can feel confident that reassessing your marketing budget doesn’t have to cut into your sales.

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How to build an 8-figure brand: The 50/30/20 e-commerce finance rule explained

by Bailey Amber
written by Bailey Amber

In today’s world, it’s not easy to stand out from the crowd – especially when you consider how easily distracted, we’ve become. While the seven and eight-figure marks tend to represent significant milestones in measuring a startup’s success, they also tend to reveal immense changes that are needed for both strategy and processes to sustain success and continue growing. 

This is something that Paul Waddy, e-commerce author, coach, investor and advisor to some of the country’s biggest brands, has experienced first-hand.

While there is economic turbulence unfolding around us – coupled with the cost of living crisis – according to Waddy, e-commerce benefited from inflation, not just in Australia, but in many parts of the world, including Europe – so despite the troubling outlook, some brands may have, there is still opportunity to grow and scale. In e-commerce specifically, it’s fallen back to where it was pre-pandemic, accounting for only about 20% of total retail. This means that online storefronts are still very much in their infancy, providing an abundance of opportunity for brands to take a chunk of that sales pie. It all comes down to finding a way to innovate, display value and solve a problem with your product.

Here are Paul’s tips for building an 8 figure brand:

Understanding The Numbers

The most important metric in e-commerce is gross profit, and if you can’t tell me your gross profit margin, then you don’t know how much to safely spend on marketing, which means you won’t be in control of your growth. One reason that I see online retailers fail is that creative types often want great brands – but they neglect the fact that they also need to have great businesses. I always say we need to be known for being as good a business as we are a brand. 

The 50/30/20 E-commerce Finance Rule

For e-commerce businesses, you’ve got to be aiming for a 50% gross margin, spending 30 per cent or less in running the business, which will leave you with a 20 per cent net profit. This is a good benchmark for e-commerce businesses – big and small – to aim for. If you’re finding that you need to spend more than that, you’re probably not getting the cut-through in your product. There are so many businesses I’ve seen – ranging from start-ups to $50M a year – who are operating on 40 per cent margins in the hope that scale will fix their numbers. However, the scale never fixes the margin. I would always say go back to the drawing board and delay your start until you get your margin where it should be.

The Product

One of the most important things to understand as a business owner is that the game is won or lost on the backend. It’s not just about selling that one product; it’s about repeat purchases and average order value. If you’re going to scale to 8 figures, then you need to increase your repeat purchase rate, and the best way to do that is to expand your product line, and offer upsells and cross-sells. 

However, it’s important to make sure that your product(s) is in demand, or trending, as the best online businesses are always driven by incredible products – followed by well-thought-out operations, great people and effective marketing. I strongly advise against diving head-first into a product that you think is going to work; instead, focus on a product you know is going to work. A favourite saying of mine is to fish where the fish are. In other words, dangle your products in front of the people you know want them rather than trying to convert cold leads that aren’t really that interested in what you’re selling.

Build For Mobile

Businesses do not focus enough on optimising for mobile usage – why are we still designing in desktop view? In my data, more than 50 per cent (closer to 75 per cent) of sessions come from Mobile over Desktop. Apps are also under-utilised. Businesses with apps can convert at up to 20 per cent higher than on desktop or mobile. Apps also require less marketing spend due to the use of push notifications, while paying with mobile is so much easier, i.e. Apple Pay, so it makes sense that you focus more on this. To give you an idea of growth, mobile commerce sales were $360 billion in 2021, up 15% from the previous year in the USA alone.

The key to progressing as a business owner is to be aware of emerging trends. You need to be fast to be first, and the sooner you get in on new segments of your market, the faster you grow. You face fewer roadblocks when you’re the first to infiltrate a new market. Your path to establishing a foothold or a dominant industry position is a straightforward shot without being hindered by the costly prospect of positioning your company in an already overcrowded industry.

Collecting The Right Big Data

Applied knowledge is power. Gathering data about your customers is essential to engaging them and optimising performance. You can continue to communicate with each website visitor over time, proving your company is trustworthy and here to stay. This may be the most powerful and high ROI of your advertising budget outside of a specific referral-generating strategy for your customers. The most important thing to remember when designing strategy and communications is that a customer is never more excited than when they first visit your website. Retargeting allows you to keep their excitement high as you reveal new information to them over time. 

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Good user experience and human-focused software are different: Here’s how to design software that puts the person at the centre

by Bailey Amber
written by Bailey Amber

In the last decade, the need for more connectivity has led to more collaborative tools, new digital channels, and more apps than we can count. The future of business and our lives very much lies in the digital world and its experiences. 

Over the years, we’ve become better at building digital products that offer very specific features to meet specific needs, help people get things done faster and easier, and target them personally. 

Building a seamless, connected, and personalised user experience has become a priority for many organisations, and with the latest advancements in artificial intelligence and machine learning, we’ve more recently seen the development of user experiences that are able to foster a stronger sense of community and even empathy.  

But offering a good user experience, even one that is very personalised, isn’t enough. 

Increasingly, there is an expectation that digital products and experiences match user preferences, differences, and even emotions, and this requires that software and apps be human-focused at their core by design.  

User experience vs human-focused experience

Although the terms “human-focused software” and “user experience” are often used interchangeably, they are different. 

Creating human-centred experiences is a growing conversation across the technology industry, and it goes beyond just building a ‘good’ user experience. 

The creation of software with a focus on the human being takes into account the habits and behavioural patterns of people who would use the product. This includes a detailed examination of their characteristics and features. 

The user experience is the practical application of the results of these studies in the final software product. 

As the Australian National University, which offers a dedicated course on Human Centred Design and Software Development puts it, “The goal of human-centred software development is to produce software products that are designed and developed around the users’ needs and requirements from the very beginning of the development process.”

Three factors to consider to start designing human-centred software and apps

The whole team needs to be responsible for people’s experience with the product

From design through development to testing and maintenance, everyone in the app creation process is responsible for enhancing the experience’s quality and the user’s value.  

Everyone together needs to immerse themselves in the lifestyle and think of real people, and understand their unique needs, motivation and the challenges they face.  

To ensure they capture every shade, creators need to seek feedback and include improvements constantly. 

The goal is to create a product that people will readily accept and use and that is able to address new attitudes, desires and user behaviour consistently. 

The adaptability of products for people with different abilities and needs can bring unexpected benefits

For example, creating inclusive and accessible software that takes into account disabilities and impairments ends up benefiting all users. 

Most people are likely to experience impairments at least once in their lives, meaning that the development of digital products and features for disabled users has a far wider reach and potential benefits than most organisations might think.

Let’s say an organisation develops a feature for visually impaired users – this will also benefit the user who wakes up one morning with a migraine and can’t look at a screen.

More and more companies will realise that by adopting this inclusive, accessible software design approach, they open up the doors to unexpected possibilities for users and ultimately attract new customers or even enter new markets.

Processes for automatised solutions should be checked frequently for objectivity

We live in an era of automation and predictive algorithms, with a strong reliance on machine learning and artificial intelligence. While these technologies, based on data, may seem objective, they often carry biases and prejudices. 

A few years ago, it emerged that Amazon’s automated system in charge of assessing candidates’ resumes had shown preferences for males. Since most candidates were males, the system concluded that these candidates were preferred. 

Such cases are becoming more common, which requires stricter validation and verification of automated decision-making processes.

Delivering compelling, people-first user experiences is a major driver of success for organisations today. Not only should this become a priority for every organisation that relies on digital products and services, but it is equally important to give designers and developers the frameworks and technologies they need to add that human-focused element at the core of every piece of software by design. 

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How technology can help Australians make better financial decisions to support the cost of living pressures 

by Bailey Amber
written by Bailey Amber

The rise to power followed a nine-year period of the Labor party being in opposition and, moreover, a period of broad disenchantment among the Australian public with federal politics. The disenchantment with the federal government likely stemmed from social and economic disruption brought on by the pandemic and the consequence of the following economic upheaval. 

The government has set its sights on addressing the soaring cost of living impacting the financial wellness of everyday Australians. Brought about by rampant inflation and supply shortages, initiatives such as the ‘help to buy’ scheme have been implemented to help relieve Australians from the alarming unaffordability that has ensued over the past year. 

The role of CDR in Australia’s financial ecosystem 

One such initiative that could help to address financial wellness is the Consumer Data Right (CDR) legislation, a policy which governs open banking and something the new Federal Government has expressed concerns about in the past. Despite that, CDR legislation has made great strides towards embracing an open data future. Data access is expanded beyond the banking sector and cited as a major focus for the newly appointed ACCC chair, Gina Cass-Gottlieb. 

Over the past year, we also saw the commencement of a statutory review of the CDR framework, which aims to drive further value for consumers and increase competition among businesses.

Open banking and CDR have the distinct advantage of promoting innovation among lenders and increasing financial wellness for consumers by allowing them to see all their finances in one place and have greater access to tailored financial products.

This is an important step towards solving the current cost of living crisis, one from which the Australian financial ecosystem and consumers benefit significantly. 

There’s still work to be done

But we haven’t yet reached the level of open banking that would enable a measurable shift towards solving the rampant cost of living. Indeed, the situation is such that Australians are turning to lend institutions to relieve the pressures of day-to-day expenses.

This has a knock-on effect on financial institutes that are being put under immense pressure to lend to greater numbers of people, creating an environment where some lenders are coming under scrutiny over their lending practices. 

With better practices under CDR, lenders will have more visibility of a consumer’s financial situation, allowing them to make quicker and more informed lending decisions. For consumers, this technology will provide cost-of-living opportunities by allowing them to find better prices from utilities to home loans easily. 

Technology is here, and now

The technology exists that lenders can adopt to help drive financial wellness for Australian consumers. At Envestnet | Yodlee, we’re working with lenders such as Tic:Toc, who have already onboarded AI-driven data aggregation to support its lending approvals process. This, in turn, allows the business to paint an accurate picture of a customer’s ability to service a loan and ensure they have the best interest of the customer at heart.

As the cost of living pressures continue to mount, it will be interesting to see how the new government looks to the benefits of CDR to support lenders and Australians making better financial decisions. 

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Business

Why accounts receivable automation is the hidden value-added opportunity

by Bailey Amber
written by Bailey Amber

Clocked the fact that every other business in Australia is digitising fast and wondering where technology might be put to best use in your own enterprise? 

It’s unlikely the good old accounts receivable department is top of your list. Yes, it’s an integral part of your operations, but it’s also the epitome of a backroom cost centre. Collecting and processing payments, updating accounts, and chasing debtors…they’re necessary, repetitive tasks that keep the organisation ticking over but could streamlining and automating them really make a difference to the health of your business?

In a word, yes. Investing in technology to automate the accounts receivable function enables you to maintain complete visibility over the flow of cash into your business. Not a month or several ago but right here, right now. Having that real- oversight of your working capital and financial position brings powerful benefits.

Freeing up funds

Arguably, the most compelling of these is the freeing up of funds. Applying customer payments to customer accounts quickly and accurately is the raison d’etre of every AR department. Doing so manually is a laborious exercise, and the time lag that inevitably ensues can extend the cash conversion cycle.

Make the switch to an automated AR platform, and it’s a very different story. BlackLine research shows companies that do so can expect to reduce their manual processing by up to 85 per cent and enjoy a 99 per cent reduction in unapplied cash.

This matters because the money owed to you by your customers is likely to be one of the largest assets on your balance sheet. Accountancy giant PwC estimates that, globally, around $A1.75 trillion of working capital is being ‘held hostage’ in this way. Faster access to funds may alleviate your cash flow woes and reduce or eliminate your requirement for external capital. Given interest rates are on the rise, the prospect of reduced borrowings should pique the interest of finance and business leaders alike.

Enhancing customer relationships

Good business is all about maintaining healthy, trusting relationships with customers and suppliers. Being contacted about payment by a creditor is rarely an enjoyable experience and if you’ve already paid the bill, it can be downright irritating. If it happens too frequently, switching suppliers may even cross your mind. 

Yet chasing customers who’ve already settled their accounts is a relatively common occurrence in the AR world. In organisations that are operating in manual mode, that is. Aside from annoying the individuals and businesses that pay the bills – and on time too! – it’s a waste of employees’ time and effort. 

Adopt an automated AR solution and your employees can stop pursuing good payers. Instead, they’ll be able to spend their time more productively, courtesy of the fact that you’ll have an accurate, up-to-the-minute view of the payment status of each and every customer on your books.

Enabling smarter decision making

Armed with this enhanced insight, your finance and sales teams will be able to make more informed credit and collection decisions. AR professionals can map individual customers’ purchasing and payment patterns and devise bespoke processes that encourage them to discharge their debts sooner. If, for example, it emerges that a consistently slow payer will only remits funds following a phone call, you can have your AR team skip the usual email reminder process and get straight on the blower.

You’ll also be able to monitor the creditworthiness of customers. If payment times are regularly extending beyond acceptable parameters, you may opt to rescind or reduce the credit facility of the organisation in question – before, not after, they default or disappear. Allowing quicker payers to extend their credit limits, meanwhile, is a smart, safe way to grow your sales.

Elevating your team

Finally, there’s another asset that automated AR technology can help you to retain: your team. BlackLine research shows organisations that want to retain top talent need to ensure those individuals are engaged and challenged. More than a quarter of finance professionals surveyed revealed they were bored by the mundanity of their jobs and 28 per cent bemoaned the fact that endless tranches of transactional work meant opportunities to learn new skills were limited.

Reducing the volume of tedious, transactional tasks your team members are expected to perform can put paid to these problems, and deploying automated AR technology is the key to doing so. It’s a great way to free up time – time employees can spend focusing on higher level tasks that deliver value for the business and provide greater job satisfaction.

Strengthening from within

Automating your AR department will never be a headline-grabbing digital transformation project. Your customers and suppliers may not even register that you’re doing things differently. But, if improving your cash flow, optimising your customer relationships, making smarter credit decisions and keeping high-performing employees happy are all important to you, it’s an exercise that’s well worth undertaking.

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Why B2B marketplaces are becoming a smart place to be

by Bailey Amber
written by Bailey Amber

Joining the online marketplace movement can help your enterprise expand its presence in the commercial arena.

Are you looking to increase your sales and profits and grow your footprint in new market segments? For most business owners, it’s a rhetorical question but making it happen via conventional business development activities is very often a slow burn.

Investing in a larger inventory is capital intensive. Hiring additional personnel to woo and win new accounts will increase your overheads and operating costs well before you begin to turn the desired profit. 

The rise of the marketplace

A growing number of consumer-focused businesses have circumvented these hurdles by implementing online marketplace technology that enables them to sell products and services that are owned and shipped by third-party sellers, a la Amazon and eBay.

Here in Australia, we’ve seen a string of household name players, including supermarket giant Woolworths and outdoor entertaining specialist Barbeques Galore, create their own destination sites. The next year, many others will follow suit.

Gartner highlighted the opportunity in late 2020, opining that enterprise marketplaces represented not only a new set of technologies for driving digital commerce but a fundamental business model change for commerce organisations. 

It predicted organisations that had operated enterprise marketplaces for more than a year could expect to record an increase in digital revenue of at least 10 per cent.

B2B businesses have been slower to embrace the online marketplace trend but that’s likely to change as more enterprises become cognisant of the advantages that can accrue from putting themselves at the heart of an eco-system of sellers.

Embracing B2B eCommerce

While, historically, B2B selling was heavily focused on face-to-face interactions, the Covid pandemic has upended that paradigm for what appears to be good and all. The protracted lockdowns of 2020 and 2021 put paid to industry roadshows, trade fairs and in-person sales and ushered in an era of online demonstrations and electronic interactions.

Research suggests business customers haven’t been unhappy with the change. Only 20 per cent of buyers were looking forward to the return of the rep, according to 2020 research published by McKinsey. Almost three-quarters of US businesses surveyed stated digital selling was working for them, and there’s little reason to suppose their counterparts Down Under see things any differently.  

Bottom line? Businesses are relaxed and comfortable about spending money online for everything from office supplies to high-priced plants and equipment. That means there’s a significant revenue opportunity for B2B businesses willing to invest in creating specialist destination hubs that digitally bring sellers and buyers together. 

Driving sales and growth

If you don’t know too many businesses that have succeeded in getting a B2B marketplace up and running, don’t worry – you will. Sceptics on this score may find it instructive to take a look at what’s been happening in other countries. 

Germany, for example, where Saitow, a company you’ve likely never heard of, runs Tyre24, an online marketplace where some 40,000 commercial customers go to buy tyres, wheels and automotive parts. It handles an impressive 100,000 transactions a day and clips the ticket on each and every one of them.

Steps to success: To get the wheels turning and emulate the Saitow online marketplace success story? At Spryker, we’ve seen a growing number of B2B businesses getting it right, not a few that have failed to launch. 

Those in the former category have used best-of-breed, composable software to develop a robust yet agile technical framework for their e-commerce operations.

Just as importantly, they’ve offered compelling value propositions to their seller eco-systems: clearly defined service level agreements and acceptable commission structures to all parties. 

Getting those relationships right matters far more so for B2B marketplace owners than their commercial counterparts because the former will typically deal with fewer sellers. Fail to keep them on board and on the side, and your B2B marketplace will struggle to gain traction.

Harnessing the power of marketing

And you’ll gain that traction much faster if you make marketing part of the mix from the outset. Establish your online marketplace as a go-to destination in the minds of the business buyers in your target market, and you’ll make it difficult for other suppliers in your sector to emulate your efforts.  

Smart operators will draw on the power of data to generate tailored campaigns and secure seller support to ensure those campaigns hit the mark and result in sales and growth.

Setting your B2B business up for success

The Covid crisis forced Australian businesses to abandon traditional means of doing business. Online marketplaces have emerged as an effective vehicle for bringing B2B sellers and buyers together and facilitating efficient, streamlined transactions. If increasing your revenue and profitability is important to you in 2023 and beyond, putting your enterprise at the centre of a specialist e-commerce network may prove a smart growth strategy.

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How much should salaries increase to keep up with inflation? This is what a study finds

by Bailey Amber
written by Bailey Amber

In order to reduce the cost of living pressures, businesses are now including inflation in their compensation budgets, according to new independent research.

This fiscal year, nearly all (96 per cent) business leaders have boosted their pay budget by an average of 20 per cent.

The findings are based on an independent poll done by specialised recruiter Robert Half among 300 Australian company executives, including 100 CFOs and 100 CIOs. As Australian CIOs report a 26 per cent increase in their compensation budget, technology teams are projected to receive the greatest salary budget increases. With CFOs reporting an average rise of 22 per cent, pay budget increases across finance functions are expected to be much lower.

The survey found that salary budgets in small businesses will increase by an average of 10 per cent, compared to 21 per cent in medium-sized businesses and 29 per cent in large businesses. At the same time, salary budget increases are anticipated to be higher overall in larger organisations compared to smaller organisations. Why? According to the poll, three times as many Australian office workers (44 per cent) cite inflation and the cost of living as their top work-life concerns, followed by high levels of stress (15 per cent) and work-life balance (12 per cent).

Moreover, in the current context, Australian businesses are actively tackling salaries and increasing salary expenditures. When there is high inflation, increasing pay transparency in comparison to other organisations (58 per cent), educating people managers to communicate about pay effectively (52 per cent), and proactively addressing employee compensation concerns (49 per cent), are additional approaches to improve pay equity.

Due to growing inflation and cost of living pressures, more than eight out of ten (81 per cent) employers anticipate increasing employee requests for pay increases in 2022. Nearly all employers (96 per cent) are prepared to grant raises to some of their workers. Just one-third (33 per cent) of employers will give raises to workers without their asking, while 63 per cent will only give raises to those who want them. Only 3 per cent of employers said they wouldn’t raise wages this year.

“The sudden rise in inflation that we have recently seen means that employees who have not received a pay rise from their employer are now on a lower income than a few months ago. Unsurprisingly, rising inflation and cost of living pressures have put salaries in the spotlight for Australian workers as they seek to mitigate any financial challenges,” said David Jones, Senior Managing Director Robert Half Asia Pacific, in announcing Robert Half’s latest survey results.

“Our research highlights that while salary is an important factor to workers, fewer employees intend to raise salary issues with their employer than there are employers who are willing to give a raise. 

Less than half of Australian workers (44 per cent) plan to request a pay increase before the end of 2022, but more than three quarters (78 per cent) say they’ll look for a new job if they don’t get one this year. This puts the onus on employers to proactively discuss remuneration plans for the coming year with their current staff or risk losing talented employees.

“In the current changeable economic climate, there’s no doubt that companies are under pressure to evaluate and benchmark their remuneration structure against the market regularly. This reinforces the importance of communication for both parties: employers should frequently address salary expectations with their valued team members, and workers should be upfront about their work-life needs – remuneration or otherwise – to ensure a transparent and satisfactory working relationship.”

“While we know that flexibility has been a significant driver of employees’ and candidates’ decision-making in the wake of the pandemic, remuneration is now becoming a primary concern as it’s expected to impact work-life increasingly. Importantly, salary expectations among contract workers are also rising due to the increased ancillary costs of taking on a role, such as transport and childcare,” concluded Jones.

More here.

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Omnichannel and Multichannel strategies for retailers ahead of the Christmas season

by Bailey Amber
written by Bailey Amber

If you have a retail business, the ability to offer online sales and ease of purchase is essential to get ahead. As consumers have moved to embrace online shopping in the wake of the COVID-19 pandemic, having an eCommerce option has become crucial for any successful retail business. 

A recent survey by BigCommerce showcased that millennials (67%) and Gen-Xers (56%) would prefer to search for products and purchase them online rather than doing so in a physical or brick-and-mortar store. 

So what is the best way to take your business online and increase sales? Or, if you already have an online presence, how can you easily, quickly, and consistently reach your target audience to raise awareness of your brand among potential customers? This is where multichannel strategies come to the fore and can really help grow your business. These strategies are the future of e-Commerce and should be a significant part of every NEW and existing small business game plan. Conversely, businesses that don’t adopt online selling and offer multichannel and omnichannel strategies may soon find themselves at a disadvantage over their competitors.

Let’s clarify what we mean when discussing multichannel instead of the better publicised omnichannel strategy. Omni-channel is a strategy by which a brand owns or manages several channels. For example, let’s assume we have the “HipHop shoes” brand. In an omnichannel world, HipHop would launch a shop (brick and mortar), a website (hiphop.com), a mobile app and a social media presence, all with the same underlying data store and customer record. This lets them interact with the customer in the way the customer chooses and can seamlessly transition between these channels.

Multichannel is about pushing your products not just through your channels but also through unaffiliated channels. This is analogous to HipHop selling its shoes in the HipHop store as well as at Foot Locker. 

So why would you want to embrace and use both approaches in your e-commerce strategy?

Well, it’s really about satisfying two distinct needs. First, omnichannel is all about customer engagement, retention and re-targeting. This is achieved by providing users with multiple options to interact with your brand. Multichannel is about attracting new customers and driving your brand into untapped markets. 

One way for small businesses to quickly adopt omnichannel and multichannel is to sell their products or services on online marketplaces. By taking advantage of existing markets and successful companies, businesses can get a leg up on the competition while saving time and expenses.  For example, if you are an Australian rural small business, you could create an online store on Spend With Us. The marketplace has a ready and waiting audience and community of over 365,000 members looking to purchase products from Australian rural and regional small businesses. Another example is if you have a computer parts business, you could create a profile on Newegg, a marketplace platform for IT computer components, and access their user base of customers looking to find those types of products.

+The benefits of using a marketplace to sell your products are plenty. Marketplaces can provide both an omnichannel and multichannel outlet to help you get new customers, raise brand awareness, and increase sales. By selling on a marketplace, your business also benefits from all its included marketing and brand-building expenses. People trust the marketplace, so they will automatically also trust you. Selling on a marketplace will also take care of most of the tech and marketing costs and tasks involved with selling online; design, hosting, processing of orders, financial transactions, advertising, marketing and promotion, saving you time and money, and importantly, opening your business to new markets and audiences.

Social Commerce is another way to utilise these strategies. Social media platforms such as Facebook, Instagram, Pinterest and TikTok provide another avenue for omnichannel organisations. Small businesses can expand their reach into previously untapped markets through digital advertisements on social media platforms and mobile apps. 

Small businesses have a real opportunity to gain with social commerce, and those that aren’t participating stand to miss out on a significant revenue stream, especially when considering that: 

  • 73% of shoppers across markets made a purchase in-store after finding or discovering the item on social media.
  • 66% of Gen Z Shoppers use social media to research a product before purchasing it.

eCommerce sales are estimated to reach nearly 24% of total retail sales by 2025. If you haven’t already, now is the time for your business to adapt to new consumer needs and behaviours, embrace online selling, and utilise strategies to help your business thrive.

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