Sorry Paula Deen fans, we’re not making our own sweet cream butter here, we’re talking about “churn” as in loss of customers.
In business it’s one of the seven words you never want to hear during the weekly meeting. What the other six are, I really don’t know. I would imagine “fired” is one of them.
As I read the reasons for possible “churn” I shuddered a little. The reasons all had to do with lower than expected sales, especially during the 4th quarter of 2011.
But wait? Weren’t eCommerce sales up for everyone? The media would sure like you to think so, but they only interview the big boys, it’s the little guys on Main Street USA suffering it out that we rarely hear about.
I never like to hear about any business closing their doors, but it’s a fact of life. If the sales aren’t there to support the operation, lights out. Everybody.
So, wanting to hear first hand why these eCommerce stores decided to call it quits, I made some phone calls. For the most part the reason was what I was expecting to hear – the ones with the deeper pockets are pushing out the ones with the smaller ones. I heard the word amazon mentioned a few times, spoken in a tone reserved for when you find out your mother-in-law is coming to visit.
It’s definitely not easy competing with the eCommerce giants, but it is possible. You may not be able to do it on price, but I know you can beat them on service! To most consumers, service before and after the sale is more important than a low price.
I looked at a few of the websites that were closing, and there was pretty much a common theme – no telephone number, an insane return policy (one store only took returns for 15 days after the sale), a note saying emails will be answered within 48 – 72 hours, and one with products so common you can buy them at every corner drugstore in America.
After a while, I didn’t feel too bad for the store owners. Many feel that the Internet is the “field of dreams” where if you build a website, shoppers will come. All of us know that isn’t true, and building a website that is a successful one takes time, dedication, time, patience, time, hard work, time and a lot of band-aids to cover up the wounds along the way.
The store owners I talked to opened their stores to either to “test the waters” as one put it, or to supplement their income, which explains the poor customer service policies. That may have been the way to do it 10, maybe 15 years ago, but not today.
The Internet has evolved, shoppers have become more savvy (and demanding) and making money off the ‘net is harder than you think. I wouldn’t want to be one of these guys who opens a new store today, the rules have changed immensely from when I did it in 1994.
Don’t get me wrong, I’m not giving up on eCommerce. God forbid! I’m just being the realist you all need to hear from. If this is the year you take the leap be prepared to work hard, play less and bust your ass every day. Keep on top of your competition, your vendors, your drop shippers, your employees, even the package delivery guy.
In the end the strong will survive.
The rest will just churn away.