3 Great Secrets of Leading Online Stores

Creating a great shopping experience

According to Bloomberg, the leading retailer by market value does not even have a physical presence around the world. Amazon, the mother of all online retail stores, this year surpassed the biggest retailer Wal-Mart in terms of market cap.

What makes this online retail store so successful? Understanding its approach to online retail business is crucial for other online stores in the startup stage. This is even more important during the festive season when sales tend to spike. One Click – a book about Amazon.com and its founder Jeff Bezos, outlines some of the secrets that propelled the online retail store to success. The following are just some of the points that stand out that can serve as a great lesson for online retail stores during this busy period:

  • Stocking
  • Technology
  • Distribution

1. Stocking
In December 2011, Best Buy issued a statement: “Due to overwhelming demand of hot product offerings on BestBuy.com during the November and December time period, we have encountered a situation that has affected redemption of some of our customers’ online orders. We are very sorry for the inconvenience this has caused, and we have notified the affected customers.”


Best Buy’s failure to manage its inventory was not only detrimental to sales, it also eroded the consumer trust that is central to any retailer’s success. With numerous articles posting titles such as “How Best Buy Stole Christmas”, the negative publicity was overwhelming. According to Lee Resources Inc. consultancy company, 91% of unhappy customers will not willingly do business with a company they had a bad experience with again. The nature of online business means that customers can move their business over to Amazon with the mere click of a button – which many did after this fiasco. Although Best Buy never released the details of what happened, it’s clear that information mismatch is to blame for Best Buy’s inability to deliver. Their solution of cancelling orders rather than delaying shipping seems to indicate that they oversold products that they didn’t have in stock. It’s unlikely though that Best Buy would intentionally set out to disappoint their customers. However, the inability to deliver in the busiest season affected the consumer trust on their online store. This can also happen to online store startups if consumers find that some goods are out of stock. Ensuring your online store always has stock is key for survival, especially in the early days.


2. Technology

Traditionally, retailers are not big on technology but are great in the retail business. Establishing an online store forces a retailer to use technology to enable online sales. Unlike Amazon that is more of a technology company that happens to sell stuff, most retailers struggle with technology. Some of the great retailers have acknowledged their shortcomings with technology and focused more on what they know – retail. These organizations use great technology companies to enable their technology solutions. The same is true in the retail sector; retailers need to focus on retail and leave technology to technology experts. In the retail sector there are technology companies that are dedicated to providing online payment solutions for your website. An online payment gateway like PayU can become a great technology partner for retailers when they start an online store or turn their website into an online sales platform.


Partnering with an online payment gateway is more so important during the festive season due to increased online shopping. An online payment gateway which provides a product like EFT Pro allows customers to shop online without the use of a credit card—therefore allowing merchants to extend sales to a larger shopping audience

3. Distribution

Once your stock is sufficient and your technology is in place, the next thing to give attention to is getting your products to your clients. Great online retail stores understand the value of distribution to succeed in the online retail game. Some of them go to an extent of acquiring distribution companies to ensure a seamless distribution process.


South African online retail stores understand this very well, due to the challenges presented by the South African Post Office. Earlier this year the Post Office experienced internal challenges that impacted on their ability to deliver goods. This affected many online retail stores. To avoid any disruption that may be caused by the Post Office, it would be wiser to partner with private distributors aswell to ensure delivery of your products. During the festive season, retail stores will be crowded and a cause for headache for many shoppers. Many will turn to online retail stores and they will be in search of ecommerce sites that have stock, fast and secure websites and lastly, stores that can deliver goods on time.


Commissioned by PayU, written by Wesley Diphoko via iDEATE (opinions are his own)