Caitlin Sykes

Caitlin Sykes is the NZ Herald's Your Business editor

Small Business: Online sales clicking for Kiwi business

Uptake of e-commerce to complement retail stores on the rise, and proving an asset for some companies.

Richard Miles provides e-commerce for guys who hate shopping.
Richard Miles provides e-commerce for guys who hate shopping.

It's official: more Kiwi small to medium-sized enterprises are claiming their place in cyberspace. Figures released last week as part of the MYOB Business Monitor Digital Nation Report show 41 per cent of SMEs operate a business website, up from 34 per cent in March last year.

As part of their online presence, an increasing number of small businesses are also transacting online.

Richard Miles, co-founder of 3 Wise Men, says the men's shirt and accessories business was started with a retail shop and an online store in 2005. However, customers didn't initially take to web sales.

Several factors have since put rocket boosters under the e-commerce side of the business, he says, including greater consumer trust in online shopping and better internet connectivity. The company predicts online sales will account for 30 per cent of its business by 2016.

But how do you strike the balance between growing online sales and a retail presence? Turet Knuefermann, owner of women's fashion brand TK, which has two retail stores and an online shop, says having physical stores complements an online presence.

"We've found customers are searching online for products and that then draws them to come and try garments on in store. Many of the online TK shoppers are existing customers who already know and trust our product who have moved out of town or overseas, or they are friends of those customers who have been recommended our brand by them," Knuefermann says.

Many say developing their e-commerce capabilities has required significant investment in both time and money. But it's interesting to note there can be huge variation in the different approaches business owners take to designing and building an e-commerce site.

For example, Tanya Carlson, founder of the Carlson women's fashion brand, says her business made its first foray into e-commerce in 2012 using the Smallfish platform.

"For a small monthly fee we were able to build our own store, which we can update and edit as much as we like, and the platform is so user-friendly no coding or website-building experience is required," Carlson says.

"It has been a great way for us to venture into e-commerce without a large financial commitment, which is ideal for us as a small business."

For Robert Ewan, founder and managing director of T-shirt and lifestyle brand Mr Vintage, going online in 2004 was an easy choice given that he started the business as a cash-strapped university student.

"After a year of Trade Me sales the first website launched. I didn't have the funds to invest in a retail store, so building the brand slowly and organically online was the logical choice." And Mr Vintage now has retail stores.

"Our latest store, at Auckland Airport, is performing really well, so there is a huge amount of potential growth with our retail stores."

But online development continues, Ewan says.

"Since late last year we've been working with PocketSquare.co.nz, which specialises in online fashion and has been great to deal with.

"The biggest change we've seen has been the increase in conversion rate on mobile devices, so stripping back our mobile site and making it easy to navigate on a mobile has really helped."

Q & A - Richard Miles is a co-founder of 3 Wise Men, a men's shirts and accessories brand

Richard Miles, co-founder, 3 Wise Men.

We started the business in 2005 with a retail store in Newmarket, Auckland, and our online offer at the same time. One of the things we found quite early on was we would refer people to our website, but it didn't generate a lot of business because people weren't comfortable buying clothing online then.

Given online menswear retail was at a pretty nascent stage then, why did you make that investment as a startup?

To some extent we were following what we were seeing happening with men's shirting businesses internationally. We always assumed e-commerce was going to gain momentum and we wanted to be in a position where we weren't scrambling to do something.

How did you develop that first e-commerce site?

Like all small businesses, and particularly startups, you try to do things on the sniff of an oily rag. I had a great mate who had been involved in doing some e-commerce stuff overseas and had come back to New Zealand, so he built our website. At the time it was about a $10,000 investment, which for a small business was quite a lot of money - especially when it wasn't generating income for some time.

How has your e-commerce presence grown?

It's gone from zero to being a $500,000 piece of business at the moment and there are a number of factors that have driven that growth. We've built a trusted brand over the years. We've also encouraged e-commerce as a way for guys that hate shopping, or do shopping as a biannual event, to avoid dragging themselves around retail stores. Internet speed has also become a lot faster, so loading imagery online is not so cumbersome, and as more retailers have started to do e-commerce the whole movement has gained momentum.

What are your future e-commerce plans?

We've just made a really significant investment in a new website and we're hoping to double online sales in the next two years. We've completely de-risked the process, offering free returns and free delivery, and I think that will drive more business for us. There are also a lot more digital marketing ideas we're only just starting to learn about, which will give us the opportunity to become more known to a lot more people. We really want to push our e-commerce site in Australia.

How did you go about building your new site?

I spent a lot of time researching and looking at best practice for apparel e-commerce. We spoke to some quite big web development and digital marketing businesses that do end-to-end design and build solutions and we also looked at some of the proprietary e-commerce stuff you could buy off the shelf. We decided not to go down the off-the-shelf route; we wanted something a bit more bespoke that worked for our brand. I actually ended up getting some really good advice from a guy who had extensive experience in the UK with men's online retail - I just met him when I was in the Newmarket store one day - and he's come on to help oversee the project. We found a good designer, then took the design to a firm called Webfit to build it. They wanted to bring it to life online, as did the design guys.

Any e-commerce advice for other small business owners?

Get into it - but don't just leap at it straight away. Do your research and speak to a whole bunch of people that have done e-commerce.

- NZ Herald

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