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An E-Tailer's Guide to Surviving the Down Economy

By Daniel Meyerov
Aug 20, 2008 4:00 AM PT

Small business is under fire -- and increasingly, it is the small business' Web site strategy that is being relied upon to create an effective defense.

An E-Tailer's Guide to Surviving the Down Economy

What are the conditions facing Web site experts and multi-tasking entrepreneurs alike -- and what are the critical changes in the online e-commerce and marketing world that will help small businesses meet this challenge? For answers, we need to look at some of the trends impacting the world of e-commerce and small business.

Economic Pressure and Competition

Rising oil prices and the shift in economic climate have left small business competing for bargain-conscious shoppers -- shoppers that are keeping a short leash on their wallet. This 'dollar consciousness' and the need to conserve expensive fuel are driving shoppers to choose the mega-retailer's convenience and price offering over selection and service.

Current sales figures tell the story: Costco in-store sales increased 9 percent in June 2008, while Wal-Mart in-store sales (in year-old stores) increased 5.8 percent in the same period. Costco reported a 32 percent jump in its fiscal third-quarter profit.

According to statistics, much of these sales gains come directly from small business' bottom line.

A National Small Business Association survey found that small business sales and profits had dropped, and that 71 percent of business owners have a "negative outlook" on the economy. As small businesses account for 99 percent of the businesses in America, the critical question is: How can small business compete in today's 'new economy?'

The answers lie in the changing world of e-commerce.

Commerce: Technology and Market Condition

While there is clearly no 'silver bullet,' strategies are available that entrepreneurs can use to generate customer loyalty, increased sales and profits. Chief among this is the more efficient use of the Web site as a critical sales channel.

The U.S. Census continues to chart significant e-commerce sales increases, ranging from 17 to 24 percent annually from 2004 through 2007. Current activity indicates that consumers continue to increase their comfort level and reliance on the Web site channel for goods and services. Small businesses are also seeing the value of the Web site, with Yahoo Small Business reporting that over 75 percent of small-business owners indicate that the Internet has made it easier to launch their enterprise.

In a marketplace that values aggregated selection of goods and services, and ability to secure the best possible price while addressing the critical need to conserve energy -- it is clear that the smartest possible use of the e-commerce channel is central to small business' survival strategy.

Two key trends have evolved, however, that create a different e-commerce reality for the business owner.

Technology: Components and Compression

The first key trend that gives small business reason to hope is the rise of component-based technology.

With the advent and acceptance of platforms such as Microsoft's .NET/ASPX environment, professional Web site developers now can more easily build and implement richly featured Web site components into a standardized framework that is powerful, robust and easily scalable. From credit card processing to site experience offerings, site developers and e-commerce directors are able to build Web site systems that are increasingly rich in their appeal, stable in their operations and with functionality that translates into customer acquisition and retention.

This component-driven approach has been critical to the creation of 'online business systems': e-commerce platforms that encompass site construction, marketing, and operational management in a manner that is economical, flexible and -- very important -- swift to market. As the barriers to integration of these components have been reduced, the ability for small business owners to compress the time, development and cost elements of an effective Web site presence has increased dramatically, coupled with a massive spike in overall quality and appeal of many of these sites.

This brings us to the second key trend: Compression.

The arrival of the compressed 'online business system' -- providing Web site-building capabilities, e-commerce and other critical business services, has empowered the SBO to launch a full-scale online arm to their business, or create a fully Web site-based company, at a fraction of the cost of earlier Web site initiatives.

Currently, many of the higher-end business systems offer an integrated application that includes a point-and-click / drag-and-drop presentation layer and a feature-rich WYSIWYG (What You See Is What You Get) content editor, as well as a full-scale e-commerce engine and a range of other pre-built Web site tools and marketing options.

Thanks to the twin blessings of technology-based components and the price/time/performance compression that this approach delivers, the SBO can create a well designed business Web site that is both quick to build and easy to manage.

The Take-Away

Some studies indicate that a typical Web site user decides on the credibility and value of the Web site they are browsing within the first 7 to 10 seconds of site arrival. Coupled with market indications that many companies receive 75 percent of their first client "touch points" through their Web site, a credible Web site that is professional, well-designed and well-marketed, and that provides users with the functionality they need, is business-critical in today's market environment.

For small business, and the over-extended e-commerce directors of slightly larger enterprises, the availability of high-performance, low-cost and feature-rich Web site-systems offers great new sales opportunities and dramatically levels the competitive playing field, while helping to ensure a deeper and more profitable experience between customer and company.

Web Site Performance

The following is a round-up of key points that the SBO or e-commerce director needs to keep in mind to ensure that their Web site is delivering necessary performance levels:

  1. Solid Foundation: Ensure that your site (and the system that powers it) is built on a stable, robust and scalable infrastructure, and that it is hosted at a reliable data center/hosting facility. For example, many high-end Web site systems use Microsoft's .Net programming environment as their foundation, due to its heightened stability and reliability compared to other coding protocols.
  2. Full Range of Functions and Features: Ensure that the system powering your Web site provides you with a full range of site construction/customization tools and marketing applications included in the price.
  3. Create Community: Join a Web site system that promotes its members businesses and that supports their need for business information, advice and knowledge-base. Look for tools such as Web site-based peer communities, and active business networks that reciprocally drive business and attract attention across the market.
  4. Quality Content (not Quantity) is King: The Web site is a visual medium, and Web site users are increasingly reading less. Use strong imagery to communicate ideas, rather than large blocks of text.
  5. Keep it clean, clear and simple: Your site should be well-organized and spaced. Make use of negative space -- i.e. avoid "clutter" on your Web site, and break up large blocks of text with images, graphs, videos, etc.
  6. Protect Your Site and Your Data at All Costs: Always ensure that your site is powered by a top-tier Web site hosting company, including a managed backup policy for your site, together with a system security plan against attacks.
  7. Simply Building It Does Not Mean They Will Come: An effective Web site business requires a focused marketing campaign, in addition to a great Web site. Make sure you work with a professional Web site marketing company, and/or use a system that provides a range of strong marketing and e-commerce tools.


Daniel Meyerov, CEO of OnlyBusiness.com, is a Web site expert specializing in the needs of the small-business community.


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