Moving business online? What you need to know.17 Nov 2020 // In the press
Corporate Partner Alexander Egerton looks at what a business needs to consider as it shifts to e-commerce
The vaccine has arrived and with it the hope that peoples’ lives can return to normal, with 2020 being a strange time on which they can reflect. However, businesses will look at 2020 as a time when ongoing changes that may have been evolutionary have been accelerated. E-commerce is a prime example. Many companies understand that they cannot ignore the vast and tech savvy marketplace available to them online and are watching their competitors pivot into the e-commerce space. Consequently, we have seen businesses transform their website platform from a purely presentational avenue to a transactional medium.
As such, this article considers what business should examine when moving to e-commerce.
Quick summary – consumer law
EU and English law draw a distinction between B2B and B2C. If a business sells B2C then they must consider the protections given to consumers and that the regulator, the Competition and Markets Authority, can impose sanctions if they do not adhere to these protections.
App, website or both?
The number of mobile-only internet users has overtaken desktop-only. App usage has also surpassed desktop usage. Some argue that you don’t need a mobile app, you just need a website that looks good on mobile devices. Others will point to the growth in app sales at a time when smart phone sales growth has slowed.
A mobile website is a website that has a responsive design and works for different screen sizes. Nothing needs to be downloaded — the website shows up automatically, switching to a “mobile” version. You can usually tell if you are on a mobile website by looking for an “m” or “mobile” in the site URL. A mobile website is a customised version of a regular website that is used specifically for mobile.
A mobile app is an app that is developed for a particular platform (iOS or Android), and is installed on the device itself. A native app is written in the language of the operating system of the device. Apps are a completely separate platform from a company’s website.
When it comes to deciding whether to build a mobile app or a mobile website, the right choice simply depends on your business objectives. If your goal is to offer mobile-friendly content to a wide range of people, then a mobile website is probably the way to go. However, if you want to better engage, interact with, and communicate with your customers to drive customer loyalty, a mobile app is an excellent choice. In many cases, you may decide you need both a mobile website and a mobile app.
How does a platform earn money?
A platform that is there to win and transact business is very different to a platform that provides information.
The platform is the business’ “digital asset” and has to be built for that purpose. So are there “metatags” or keywords in the platform’s code to attract browsers “googling”. These metatags, however, have to be carefully selected. If they are too broad (e.g. clothing) the search engines will ignore or give it low priority in search results. So, it may be better to instead describe specific products such as “high value leather belts”, narrowing the search focus of your platform.
Does the platform have a high bounce rate, i.e. do people browse but then leave? Any visitor needs to be several “clicks” from the home page from a purchase. The platform has to clearly show browsers where to buy. If this is not obvious, or there are too many pages in between, the browser will just leave.
There needs to be a digital marketing strategy to drive traffic to the site. Will you rely on search engines; use social media to build a profile or partner with other sites? In practice, a strategy will involve more than one of these techniques. As such, any strategy has to be properly costed so you can identify the return.
How do businesses deal with consumers?
With consumers, disclosing information is essential. A business must prominently display who they are (for example, their VAT number, registration number and membership of professional bodies). A business then needs to provide information to the consumer; this includes the main characteristics of the product, details, prices and delivery information. Finally, a company has to give the consumer the right to withdraw or cancel – commonly known as “distance” or “doorstep” selling. These rules are very prescriptive and, in particular, the rules on who pays for the return of rejected goods require particular study.
With so many companies switching to trading online, it is easy to think that e-commerce will be easy. However, a business looking to expand its online presence has to use the same methodology with its new digital asset as it would with a new store. With a new store the following would be carefully considered:
- What is the likely footfall (how busy will it be and what are the likely demographics);
- Have previous similar ventures failed in that spot;
- How will goods be presented in the store;
- How will the store be presented?
If a business regards expanding its online presence as important an investment as a new store and applies the same diligence, the venture is better placed to succeed.
This article first appeared in Robotics Law Journal, click here to read the full article.