There are plenty of challenges facing online retailers at this time of year, not least of which is ensuring they have the infrastructure and security systems in place to deal with the surge in activity. When addressing these core issues, don't forget to think of your overseas customers, as well as your domestic ones. Facilitating cross-border shopping is an oft-neglected area among Irish SMEs.
Shoppers without borders
Irish online sellers are missing out on potentially lucrative international sales, according to a recent EU study. Last month the EU's consumer commissioner, Meglena Kuneva, found that 60 percent of cross-border internet shopping orders made by EU citizens are refused.
With one-third of the EU population shopping online (over 150 million people), this is a massive market that Irish retailers can ill afford to miss out on, especially at the busiest shopping period of the year. The study found that just 21 percent of e-retailers in the EU allow for cross-border sales. "If Irish websites want to expand they cannot ignore the huge potential offered by expanding outside the Irish marketplace," says Aedan Ryan, founder of Irish online retailer Puddleducks.ie.
The EU study found that one of the core problems lay in logistics, as retailers simply didn't have the structures in place to facilitate cross-border shopping. "Simply having an agreement in place with a courier such as DHL would massively improve a retailer's range of potential customers who might be willing to pay the increased shipping cost in order to retrieve a particular product," says Dan King, hosting and managed services manager at Digiweb.
The other key problem highlighted by the EU commission report was in managing payments. Given the wealth of options available to Irish businesses, this is an issue which most retailers should have little trouble resolving. "You wouldn't open a high street retail store without thinking about how your customers pay for the goods, and it's the same online," says Gareth Dunlop, managing director of web development firm Tibus.
One of the best ways to address the issue of payments is to think locally. Look at how retailers in other regions operate and see how you can best adapt your online shop to meet those shoppers' needs. "We would suggest that online retailers offer the payment methods that are popular in the markets where they wish to sell," says Tracy Glynn, head of Global SME Business Development with Realex Payments.
Festive fraudsters
Security is a year-round issue for online retailers. Christmas does not tend to produce any new type of threats, but it does bring a greater number of the usual security headaches. During the shopping frenzy, cyber criminals are on the lookout for loopholes to exploit.
"Given the increase in the amount of personal and financial information that will flow over the internet in the coming weeks, an opportunistic online criminal may try his luck by attempting to exploit weaknesses in your online systems to gain access to the potentially lucrative information you may happen to store," says Colm Fagan, services director with IT security company Espion.
"There are literally thousands of potential vulnerabilities that your systems could be exposed to that would allow this to happen. However, by simply keeping your systems up-to-date with manufacturer updates, patches and bug fixes, you can mitigate most of the risks associated with these vulnerabilities," he says.
An increase in fraudulent activity is a by-product of the festive season that retailers need to be wary of over the next couple of weeks. The key issue to keep in mind is that as a retailer, you will be under pressure and may have less time to explore potentially fraudulent transactions. Likewise, banks will have less time to review buying patterns that are suspicious, meaning that those with fraudulent intent are more likely to stay under the radar unless preventative measures are taken.
King says SMEs can take action ahead of time to stop fraudulent orders ruining Christmas. "Services are available from firms such as Verisign where orders can be screened for potential fraud, thus making each completed order much more likely to be a true and correct order," he says.
SMEs' little helper
Retailers need to ensure their technology partners are supportive during this potentially vulnerable time of year.
Now is the time to ask key questions of IT suppliers about monitoring, security, patching and support services. SMEs should also talk to their IT providers to make sure the structures are in place to handle all the extra traffic coming down the broadband pipe
"When competitors are only a click away, it is important for online retailers to ensure that their online systems can cope with the spikes in demand. Online retailers should consider ensuring that there is sufficient bandwidth to the site from the internet and that there is sufficient processing power so that transactions can be concluded in a timely way," says Fagan.
"It might be worth asking if your web hosting provider can ramp up servers immediately in the face of a Christmas demand rush," advises King.
For more advice on preparing your online store for Christmas, see part one of this feature in Issue 248.