In this four-part series of blogs, my objective is to explain the roadblocks currently preventing small businesses from developing sustainable traffic for conducting e-commerce.
In this first post in the series, I will explain the importance of a world-class website as the foundation for a small business transformation. However, it will become clear that deploying a world-class website is not the solution in itself - only the foundation. Nothing can happen without it, but nothing will happen with it unless there's an ongoing content creation strategy and an understanding and use of the science of website traffic development.
The popular internet is now 25 or so years old. It's changed radically since the first websites went live and continue to change rapidly. There are virtually one billion websites established, and big business has built a strong presence. But ... what about small businesses?
Large corporations dominate web traffic, while small business has mostly failed to establish a significant presence. Everyone has a website, but no one has any traffic. Why is this, and what roadblocks prevent small businesses from having a more substantial online presence?
Before I attempt to answer these rhetorical questions, let's look at what's required to develop sustainable website traffic. Once we've explored this, we'll have a better understanding of the roadblocks and why small business has mostly failed to take advantage of the game-changing potential of the internet.
My passion is the office products industry, particularly emphasizing office supplies such as ink and toner cartridges. This is a mature industry with many market distortions and "rent-extractors," which means the OEMs still control 80% ($20 billion out of $25 billion) of the retail spend on ink and toner in the United States.
The aftermarket has a 20% share, and the overall market is declining at 1-2% per year, but the aftermarket spending is decreasing faster than the overall market. No one knows, but it's estimated there are 10,000 resellers in the United States. Many of these resellers were the pioneers of the aftermarket, remanufacturing first toner and then ink cartridges in the early 1990s. They know the business, and they work hard.
The quality of aftermarket products has increased exponentially since the early days, while most local remanufacturing has closed down due to the high cost, the technical, and quality barriers.
So, the resellers work hard, they know the business, and the quality has improved massively from where it used to be; there's a compelling value proposition compared to over-priced OEM cartridges. I look at these market conditions and see a considerable growth opportunity despite the overall market shrink of 1-2% per year. $25 billion in annual retail sales in the U.S. constitutes a large market, and a 20% aftermarket share means a $20 billion growth opportunity for intelligent resellers.
However, at this time, I don't think most of the resellers see or understand the same growth opportunity.
Why is this, and how do we educate and motivate this large group of hard-working business owners to understand the opportunity, get all the required elements for operating their business in the 21st century, and successfully execute a business transformation?
The answer lies in the internet - it's not easy. Although I think most business owners instinctively understand the importance of the internet, they don't know what's required to take advantage.
To set the scene - in the old days, large companies with the most significant resources built the most extensive brick-and-mortar presence, advertised, and established recognizable brands. It was tough for a small business to compete effectively with a large corporation because of the required capital resources. These days ... think about significant and small company websites. There's no reason why a small company website cannot technically and visually match a big company website. The website is a 21st-century storefront and provides an opportunity for a small business to level the playing field in a manner that has never existed.
In the old days, small businesses could never expect to match ample business resources. They were consigned to a lesser role that depended on their local footprint and relationships in local markets. However, in the modern era, a small business website cannot be developed to present a sophisticated and game-changing presence that meets or exceeds that of large enterprises.
Suppose you're a small business with a brick-and-mortar presence in your local community, and your store is not maintained. In that case, the windows are dirty, the floor is messy, and the product on the shelves is covered in dust, prospective customers will walk straight by! Store owners know they must keep their store clean and welcoming for any customers to enter the store.
This is the first part of the problem in the reseller community for office products and supplies - the current websites (of course, there are exceptions) generally score less than 30/100 using popular website graders. With some effort, the first stage of a business transformation could be accomplished simply by getting these sites to an 80+ grade.
The second part of the problem is the sheer scale of the internet. Many small businesses still think they can create their website and traffic will magically come. Unfortunately, this is not the case. Whether a site has a grade of 30 or 80+, the chances of developing sustainable web traffic without a sophisticated marketing strategy are close to zero!
With a website grade of 30, there's simply no point trying to develop web traffic so, so the first step that must be taken is to fix the website. Once this has been accomplished then, a business transformation strategy can be commenced by leveraging the website asset that's been deployed.
Web traffic development is not easy and won't happen overnight - especially not in a mature industry such as office products. However, remember there's a 20 billion dollar growth opportunity and that over 80% of buyers research online before deciding.
Perhaps those researching buyers are unhappy with their "big-box" solutions (DepotMax and Staples), the smattering of high-priced aftermarket products, and the broad array of OEM products they currently offer. Perhaps they're looking for alternatives but can't find them because the 10,000 resellers have collectively failed to present information on their websites that these buyers may be looking for. Switching from a trusted OEM brand to an unknown aftermarket brand is difficult for a buyer, particularly when bombarded with the FUD (fear, uncertainty, and doubt) strategies aggressively spread by the OEMs. To educate researching buyers and help build trust and confidence to make that switch, the correct type of content for them to make an informed decision for an improved value proposition from a qualified alternative supplier has to be provided!
Web traffic development is a combination of an art and a science. The "art" is the content, and the "science" is the understanding of what search engines seek to decide whether a site is delivered high-up in search results.
In part 2 of this blog, to be published on June 22, I'll write about the "art" component and the importance of engaging, valuable, and relevant content; in part 3, to be published on June 29, I'll discuss the "science" of website traffic development. Finally, in early July, the fourth and final part of the series will provide a summary and path forward for small businesses to overcome the roadblock and successfully develop relevant traffic for conducting e-commerce and business transformation.