SUCCESS FACTORS OF ONLINE SHOPS - Hogeschool van Amsterdam
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
SUCCESS FACTORS OF ONLINE SHOPS
RESULTS FROM THE SHOPPING 2020
ONLINE ENTREPRENEURSHIP EXPERT GROUP
Dr. Jesse Weltevreden
Professor of E-Business (Lector Online Ondernemen)
Centre for Applied Research on Economics & Management,
Hogeschool van Amsterdam
http://www.carem.hva.nl/
1Research design
Research question
What are the success factors of online shops and what support
and knowledge from trade associations do they need?
Data
• Focus on ‘pure players’
• Literature review and Chamber of Commerce data (N=26,250)
• Online survey of web merchants (N = 500)
• Interviews with web merchants (N = 25)
2ONLINE SHOPS IN THE NETHERLANDS
2009-2013
3Online shops in the Netherlands
Growth of the number of firms in the Netherlands, by
industry (2009=100), 2009-2013
220
208
200
180
160
140
132
120
107
100
80
60
40
20
0
2009-1 2009-2 2010-1 2010-2 2011-1 2011-2 2012-1 2012-2 2013-1
Online retailers (pure players) All retailers All firms
4
Source: Chamber of Commerce (2013), adapted by HvAOnline shops in the Netherlands
Number of start-ups and exits as a share of the total
number of firms per industry (in %), 2009-2013
Start-ups (in%) Exits (in%)
22 22
20 20
18 18
16 16
14 14
12 12
10 10
8 8
6 6
4 4
2 2
0 0
Online retailers (pure players) Online retailers (pure players)
All retailers All retailers
All firms All firms
5
Source: Chamber of Commerce (2013), adapted by HvAOnline shops in the Netherlands
Survival rate of firms in the Netherlands after 1 through 4 years, by
industry (in%)
100
90
80
70
60 59
50
44
40 41
30
20
10
0
After 1 year After 2 years After 3 years After 4 years
Online retailers (pure players) All retailers All firms
6
Source: Chamber of Commerce (2013), adapted by HvACHARACTERISTICS OF ONLINE SHOPS ©Shopping2020 7
5 types of online shops
Based on the number and type of owners (in %)
• Two relatively highly
educated owners of
middle age @ @
• Owners work on
average
Single 24 hours
owner firm: Single owner firm:
per week in the
Spare time 35 Part-time entrepreneur
companyentrepreneur 18
• Company exists on
average 3 years
• • Predominantly
Starting capitala >middle-aged 3
€3+2,500
man owner business
• • Runs
Morethe than € 10,000alongside a
company • Predominantly a middle-aged
• Predominantly a middle-aged man
sales per
full-time jobyear
or study woman
• Is working full-time in the company
• Company started from a hobby23 • 20
Runs the company alongside a
and has no other sources of
or for extra earnings @ or the care for
part-time job, study
income
• Young company with small a family
• Relatively much entrepreneurial
starting capital
2 owner( € 2,500
• More than € 10,000 sales per year • Less than € 10,000 sales per year8SUCCESS ©Shopping2020 9
Success
Inclusion in the Twinkle 100.
Angeliek Nelissen,
Year on year a positive result Zomerzoen.nl
and ‘double digit growth’.
Joachim de Boer,
Deonlinedrogist.nl
That you can make money
with your company, but you
have to like it too.
We get orders daily and are Wouter Hol, Recognition from customers
able to help customers. That Kabeltje.com and winning a Thuiswinkel
makes it successful for me. award.
Burak Ayar, Mariëlle van Werven,
Drphone.nl The bond with the customers Annadiva.nl
and when I hear that they are
happy with our products.
My business is successful Daniëlle Meloen,
when a large group of Hulpplus.nl Satisfied and returning
customers intend to return. customers. But eventually
Bastiaan de Jong, making a profit out of it.
Holland-at-Home.com When you have fun in what Esther Kroon,
you do it and are able to get XLkindermode.nl
a good income from it.
Joos Lambrechtsen,
Herensokken.nl
10Success
Succes according to web merchants (in %)
When our customers are satisfied 66
If the company is financially sound 37
If the company gives me more energy than it takes 28
If I can get a nice extra income from it 27
If the company is profitable 26
When working time is in proportion to the income from company 22
If the turnover is growing year on year 21
If profits grow from year to year 19
If I can get at least an average income from the company 14
If our market share is increasing year on year 9
If I get recognition from peers 3
If we can maintain our market share 3
If our employees are satisfied 2
If the number of employees grows from year to year 1
When my company wins an important prize 1
Other 1
0 20 40 60 80 100
11Success
Annual turnover in 2012, according to firm type (in %)*
100 2
7 4
90 2 14
22 26
80 5
26 32
10
70 7
32
60
50 30
40
40
30 65 61
49
20 37
28
10
0
Spare time Part-time Full-time 2 owner Total
entrepreneur entrepreneur entrepreneur business
Less than € 10,000 € 10,000 - € 50,000 € 50,000 - € 100,000 € 100,000 or more
* Excluding companies that started in 2013. 12Success
Ever made a profit, according to firm type (in %)*
100
90 15
20
29
34 38
80
70
60
50
85
40 80
71
66 62
30
20
10
0
Spare time Part-time Full-time 2 owner Total
entrepreneur entrepreneur entrepreneur business
Yes No
* Excluding companies that started in 2013. 13Success
At least earned once an average income* from the
company, according to firm type (in %)**
100
90
80
70
69
60 77 82
93 90
50
40
30
20
31
10 23 18
7 10
0
Spare time Part-time Full-time 2 owner Total
entrepreneur entrepreneur entrepreneur business
Yes No
* The gross average income in the Netherlands in 2013 was about € 33,000. 14
** Excluding companies that started in 2013.FIRM EXIT
15Firm exit
We were left with unsaleable
stocks and because of that
we had to quit.
One reason to really quit Patrick Heijmans
would be that I no longer will Lupux.nl
be happy.
Daniëlle Meloen,
Hulpplus.nl It took me too much time
and my family did not like it
that I was always busy.
Market came into downward Inger Burg,
spiral. We should have but Ibby.nl Never considered to quit!
did not quit then. In Bart Bockweg,
retrospect a stupid decision. Tbls.nl
Patrick Gerrits, Mediaoffer.nl Considered: ... the frustration
of having so much on stock
that is not selling at all.
At times when many things Shirley Akkerman
go wrong beyond our fault, I La-joya.nl It crossed my mind, but it was
sometimes think about it. for personal reasons and had
Sander Berendsen, nothing to do with the firm.
Sbsupply.nl Never considered. However, at Bastiaan de Jong,
busy times I do think 'How am Holland-at-Home.com
I going to manage it all'.
Wijtze Terpstra,
Agrispeelgoed.nl
16Firm exit
Reasons to quit, according to web merchants (in%)
Health reasons 41
When it is negatively affecting my personal life 38
When the company costs me more energy than I get from it 36
If I can't get enough income out of it 33
If the working time is not in proportion to the income I get out of it 31
If a party presents itself to take over my business 31
If the company is not profitable anymore 27
Bankruptcy 22
If I fail to grow the company 22
If competition is getting too fierce 10
If I find an interesting paid job 9
If I find paid employment that pays better 7
Conflict with co-owner 5
Other 5
0 20 40 60 80 100
17Firm exit
Probability that the company in 2014 and 2020 still
exists according to firm type (in%)
100
90 18 16
25 24
80 43
50 52
70 26
32 63
60 34 33
50
40
30 41
30 39
25
20
10
0
2014 2020 2014 2020 2014 2020 2014 2020
Spare time entrepreneur Part-time entrepreneur Full-time entrepreneur 2 owner business
Very small Small Nor small, nor large Large Very large
18CHALLENGES ©Shopping2020 19
Challenges 2013 & 2014-2020
Strategic challenges (in %)
42
Increasing profits / income from the company 57
47
Increasing sales 52
27
Finding suitable suppliers 23
22
Finding new markets / customer groups 25
13
Developing a long term strategy 21
15
Determining which customer contact and sales channels to use 13
10
Setting up a new business / concept 14
11
Enhancing the general entrepreneurial skills 10
9
Finding sufficient capital to (further) develop the business 11
4
Finding suitable business premises 10
5
Determining which operational processes will be outsourced 8
4
Determining which tax and incentive schemes to use 3
4
Other challenge 3
0 10 20 30 40 50 60 70
2013 2014 - 2020
20Challenges 2013 & 2014-2020
Operational challenges (in %)
37
(Re)developing the website 45
31
Cost reduction 27
22
Increasing the number of suppliers 26
16
Optimizing the online ordering process 23
12
Managing the online and offline activities as an integrated operation 16
13
Enhancing the operational skills of staff / owners 13
9
Linking / integrating customer information from different channels 13
10
Improving relationships with existing suppliers 9
9
Improving the security of the website 8
8
Adapting our operations to new legislation and regulations 9
5
Reducing the number of returns 7
2
Finding and hiring qualified staff 7
6
Other challenge 4
0 5 10 15 20 25 30 35 40 45 50
2013 2014 - 2020
21Challenges 2013 & 2014-2020
Marketing en sales challenges (in %)
63
Enhancing the online visibility of the web shop 57
39
Effective use of social media for sales and web care
40
19
Improving the conversion ratio 22
17
Enhancing the sales and marketing skills of staff / owners 18
10
Developing a mobile application (app) and / or mobile website 24
12
Measuring the effectiveness of online marketing and sales activities
11
5
Opening a physical store 18
7
Opening a pop-up shop 12
7
Setting up an online affiliate network 9
3
Other challenge 2
0 10 20 30 40 50 60 70
2013 2014 - 2020
22Need for support 2013 & 2014-2020
Importance of challenges en the need for support
High
Much
Developing a mobile website or app
Setting up an online affiliate network
(Re)developing the website
Improving the conversion ratio
Improving the security of the website
Enhancing sales and marketing skills
Deciding which tax and incentive schemes to use Increasing web design skills Improving the online visibility
Opening a pop
-up store Integrating customer information from different channels
Optimizing the online ordering process
Need for support
Enhancing the general entrepreneurial skills
Opening a physical shop Determining which customer contact and sales channels to use
Adapting to new legislation and regulations
Measuring the effectiveness of online marketing activities
Determining which operational
processes will be outsourced Setting up a new business Finding new markets / Effective use of social media
customer groups
Finding suitable business premises Developing a long term strategy Increasing profits / income
Managing the online and offline Finding suitable suppliers
activities as an integrated operation Increasing sales
Finding sufficient capital
Finding and hiring qualified staff Increasing the number of suppliers
Cost reduction
Little
Low
Reducing the number of returns
Improving relationships with existing suppliers
Small Large
Importance of challenge
Strategic challenges Operational challenges Marketing/sales challenges
23Conclusions
• There is a lot of dynamics among online shops in The Netherlands
• However, 60 percent do not survive the first four years
• Most web entrepreneurs could not live on their online shop
• Success and reasons to quit are less financially driven for most web
entrepreneurs
• However, survival in 2020 still depends mainly on financial performance
• Investment of time and money and a clear strategy determine success
Considerations for future web entrepreneurs
• An online shop is no goose with the golden eggs
• Think carefully before you start and develop a clear strategy
• Focus on distinctiveness and added value
• Remember: hard work does pay off
24MORE INFORMATION
www.carem.hva.nl
http://twitter.com/carem_hva
http://twitter.com/jweltevreden
25You can also read
