What is Online Retail and How Can I Grow My Online Business?

Online retail is when businesses sell products or services on the internet. Usually, that’s directly to consumers (think Amazon, Kmart, eBay, The Iconic). Online retail is a big part of how we shop now. Studies show that one in seven Australians shop online at least once a week, and that number is growing. (Some consumers shop almost exclusively online.)

This upward trend presents incredible opportunities for online retail brands. Let’s explore how you can ride the online retail wave for business success.

If you’re looking into online retail, you’ve probably come across the term ‘ecommerce’. Online retail and ecommerce are often used interchangeably; however, while these concepts are related, they’re not the same.

In essence, ecommerce is the whole landscape of digital buying and selling. Online retail specifically refers to businesses selling directly to customers within the ecommerce landscape.

Ecommerce encompasses all digital transactions. That includes:

• B2B ecommerce (business-to-business): Transactions between businesses. A wholesaler selling bulk electronics to a retailer, for example.
• C2C ecommerce (customer-to-customer): Individuals selling to other individuals, usually through a third-party platform. eBay or even Facebook Marketplace would be an example.
• C2B ecommerce (consumer-to-business): Individuals offering products or services to businesses (like a freelancer offering logo design on Fiverr).

Online retail is a subset of the broader ecommerce business landscape. Online retail refers specifically to businesses selling products directly to consumers over the internet. That makes online retail a B2C (business-to-consumer) model.

So – what are the key aspects that distinguish online retail? Let’s take a look.

• Digital storefronts: Online storefronts are user-friendly websites (or apps) where consumers can browse at their convenience 24/7.
• Evolving consumer behaviour: It’s no secret that shopping habits are changing. More and more people now turn to the internet to shop. This is a key aspect in the rise of online retail.
• Expanded market access: Online retail is (mostly) borderless. Businesses can sell nationwide or even globally, which opens up broader markets.
• Mobile commerce growth: With the widespread use of smartphones, mobile shopping has become a major driver of online sales. This stimulates the need for responsive app-based platforms.

To give you an idea of how this looks in practice, here are some top examples of online Australian retailers:

• The Iconic: A leading online fashion and lifestyle retailer. They were founded back in 2011 and are now one of Australia’s largest online retailers.
• Booktopia: An Australian-owned online bookstore, and a big one at that. In 2023 alone, they made more than $200,000,000 !
• Redbubble: A global online marketplace for artists to sell unique designs. They offer everything from mugs and t-shirts to wall art and lifestyle products.
• Little Snapbacks: A small business selling custom children’s hats online. They’re a great example of selling within a niche (a concept we’ll cover more in-depth later).

Online retail offers a fantastic opportunity to grow your business. Let’s explore some of the benefits in greater detail.

Physical storefronts can be expensive. Digital storefronts bypass costs like rent, utilities, etc. They also allow businesses to allocate resources more effectively to areas like marketing and product development.

Estimates suggest around 2.77 billion people shop online globally. For businesses, online retail can significantly increase their potential customer base.

Another limit of physical stores? Operating hours. Very few physical retailers are open 24/7—unlike online outlets, where businesses can make ecommerce sales at any time, day or night. That’s great both for consumers and sellers.

Knowing as much about your customers as possible is essential. Having an online store makes it easier than ever to gather customer data (including browsing behaviour, purchase history, preferences, etc.)

Customers love it when they feel the store they’re buying from really ‘gets them’. Digitalisation gives you an opportunity to excel in personal shopping experiences.

So – you’re interested in starting online retail businesses? There’s never been a better time and online retail can be a very rewarding venture. And with the right tools and know-how, you can get off to a fantastic start in less time than you might imagine.

Here’s a simple walkthrough of how to set up an online retail business in Australia.

The first step is the important one. You should begin by choosing a specific product category or market you’re passionate about. You might also want to consider factors like demand and competition.

This is also important. You should spend some time getting to know your market. This involves both audience research (knowing your audience’s needs, preferences, shopping behaviours, etc.) and competitor research. Analyse what your would-be competitors are doing. What works? Can you offer something better?

Create a business plan that includes goals, strategies, budgets, operational plans, and more. One of the easiest ways to gain clarity on your goals and brand message is to practice how you communicate them. Writing a business plan provides you with the space to create a financial model. It outlines the best- and worst-case scenarios that validate your idea’s worth.

Assuming you’re selling products, you’ll need to figure out how you’re going to make them. Will you manufacture them yourself or buy them wholesale? These days, dropshipping is even an option. Make sure you’re offering quality products that align with your brand image/values.

Building an online store has never been easier. There are many great website builders and ecommerce platforms out there. Salesforce’s Digital Storefronts, for example, makes it easy to design professional, user-friendly websites, even without experience.

Logistics and inventory are both essential to online retailing. You’ll need to plan out how exactly you’re going to store and ship your products. Here, a robust POS system like Salesforce Retail Cloud can make all the difference. It helps you streamline inventory management, order tracking, customer transactions, and more.

Use digital marketing strategies such as SEO, social media, email marketing automation, and paid ads to drive traffic to your store. Content marketing campaigns can also boost brand awareness.

Online retail is never ‘done’. It’s a process of doing. Make sure you stay on top of your site’s analytics and retail sales data and improve where possible.

Once you’ve launched (successfully), the next step is to begin growing your business. That could include expanding your product range or opening up to overseas markets.

Look at launching your online retail business as starting a journey. The important thing is to get started. From there, you learn from your mistakes, take the opportunities that come to you, and look at ways to improve.

Your online retail store probably won’t be perfect right out of the gate. There are a myriad of ways savvy online retail business owners can look to optimise their stores for better sales figures. Here are a few suggestions.

Presentation is everything. Make sure yours are hitting the mark. And don’t forget to add zoom features and detailed product descriptions, either. Anything that reduces customer uncertainty (such as size guides and customer reviews) is also a plus.

If you have a long, complicated checkout process, you’re likely to have customers abandon their shopping carts. Simplify digital payment to boost sales.

A clear, fair returns policy goes a long way. It builds buyer confidence, as does a quick, attentive customer support service through chat or email.

We’re all connected to our phones. Your website needs to be fast and easy to navigate on a mobile or you’ll lose potential customers.

As well as tweaking your site, honing your business strategies can also lead to supercharged results. If you want to take your sales to the next level, consider some of these tried-and-tested marketing and sales growth strategies.

1. SEO, social media marketing, and paid advertising: SEO (search engine optimisation) is the best way to drive organic traffic. Businesses all over the world spend big money on their SEO efforts, and with good reason. Combine SEO with targeted social media campaigns and paid ads, and you’ll reach a larger audience of potential customers.
2. Rewards programmes and personalised experiences: Loyalty programmes and gift cards are a great idea. They incentivise repeat online purchases and also contribute to your brand identity. Personalised product recommendations based on browsing history can also make the online shopping experience feel more tailored.
3. Utilising customer feedback: There’s a reason the customer experience comes first. They also know what works and what doesn’t more than anybody else. Encourage reviews and conduct surveys to get a better understanding of your pain points.
4. Using analytics to improve sales: Data is your best friend. Utilise a digital marketing performance tool like Salesforce Commerce Cloud to get data-backed retail insights that help you refine strategies, spot opportunities, and reduce wasted spend.
5. Stay updated with ecommerce trends: We all know an outdated retail site when we see one. Stay on top of current ecommerce site trends (AI chatbots, AR product previews, sustainable packaging, etc) to gain a competitive edge.

Running a popular online retail business can be a rewarding (and potentially lucrative) endeavour. It’s important to make sure you’re prepared. There will be lessons to learn along the way, but you can also give yourself the best chance for success by following some of the tips in this guide.

It all comes down to planning. Before you start, create a comprehensive business plan and come up with some trusted strategies. Make sure your website is attractive and easy to use, with high-quality images, easy navigation, hassle-free checkouts, easy returns, customer support, and more.

It’s also essential to have the right tools. Salesforce Commerce Cloud can do the heavy lifting for you, providing the deep insights and automated processes you need to get ahead of the competition.