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I have been selling men’s fashion online since 2004.
So think of my perspective on e-commerce as you would think of how George Washington might discuss American history if he were alive today. Because I’ve been here pretty much since the ecommerce revolution and I’ve seen it all.
There was a time when people like me would look at people like you (brick and mortar store owners) and think you were dinosaurs. Outdated. Leave money on the table by not starting your own ecommerce store.
And we were right. But not so much anymore.
In the early 2000s, the internet was much like the US was in the early 19th century. Mostly undetected. Undeveloped. Few people occupy the space – either as businesses or as consumers.
I was one of the first to build a menswear brand natively online. I was one of the original “interrupters”.
Back then, the big department stores didn’t have websites. Or when they did, they sold a very limited number of SKUs. Brooks Brothers and Jos. A. Bank hardly engaged in e-commerce. By the time they all started ramping up their online offerings and investing in e-commerce infrastructure (2008-2010), they were already years behind native online brands and still had a lot to learn.
At this point, early online brands like us already understood the ecommerce shopper. We master digital marketing. We figured out how to use the media to drive traffic and customers to our websites. It was a glorious time.
But things have changed.
For online brands, customer acquisition has never been so challenging and costly. That’s because digital marketing is less targeted (due to new privacy standards). Customers have become less curious about brands and now everyone and their mother (sometimes literally!) can sell their wares online.
In fact, it is now believed that it costs less to acquire a new customer by opening a brick-and-mortar store than it does to acquire a new customer through online advertising – something that was absolutely unheard of just five years ago. Most domestic online brands need to open at least one or two stores to expand or even survive. And yet very few of us can afford it.
It is said that a customer needs to see your ad seven times before they simply click through to your website. Even then, the probability that he will order is only 2 percent. So you can imagine how much money is spent on marketing before finally landing a new customer.
And without face-to-face contact, it’s almost impossible for online brands to connect with customers. Don’t listen to the noise of building “online communities” and “customer loyalty”. Yes, it’s a thing, but it’s nothing compared to what you brick-and-mortar retailers have created with your well-curated stores, special events, and exceptional customer service.
So if 2023 is here and you’re thinking about getting online, my advice is simple: enjoy the weed where you are. It might just be a darker shade of green than ours.
Greg Shugar is the owner of Beau Ties of Vermont, an American-made neckwear and accessories company based in Middlebury, Vermont. In 2004 he and his wife founded The Tie Bar, one of the very first menswear direct brands. The company was acquired by a private equity firm in 2013. Greg is also an active investor and teaches entrepreneurship at Florida Atlantic University School of Business.
