Launching Additional Brands Online
What’s more costly, opening up a new successful retail location or a new successful online brand/store? The answer is “it depends”. Just because making a new e-commerce site is “cheap” doesn’t take into consideration all the costs of driving traffic and getting conversions.
By Jennifer Matt
Published: April 24, 2015
If you were going to open up a new retail location, what would be your thought process? You would consider the location very carefully. Opening up a retail location in a dangerous neighborhood or on a dead end street would not be your first choice. You would look for good foot traffic and easy access by car or mass transit depending on whether it’s a city or suburb location.
You would think through the costs of getting customers to this new location, what would you have to do to advertise and market this new location? If you’re targeting consumers, are they hanging out there? If you’re targeting businesses are you choosing a location that has many businesses in the area? You would also think through the staffing of this new location, the recurring expenses of the building, and the management overhead.
My point being – opening up a new retail location takes a lot of thought and all of us get that it takes upfront investments and on-going investment to create and sustain the business.
Let’s switch gears to the online world. Many printers have not only opened up a new online shop but also under a totally different brand. There is great justification for doing this; here are some of the most common ones I hear:
- We want to run this business completely separate from our current business.
- We don’t want to confuse our current customers with this different offer.
- We want to get very narrow – target the offering to just one vertical market or one product offering.
- We want to drive different traffic to the site, so our organic search and paid search campaigns will be very different.
- We hate our current website so we just built it on another URL because it was easier than messing with what we already have.
All of these reasons make some sense, starting a new brand and/or online store appears to be much cheaper and easier to do than a physical location. Of course it is; because you’re not signing a lease or paying the electricity bill, but we forget that you do have to make investments to actually make it successful. Most printers create the site and then hope traffic will come. Then they experiment with paid search and they get some traffic, low conversion, contribute to the great Google monopoly, and quit the whole thing in frustration.
The premise isn’t flawed, the execution and expectation of what it takes to create a new brand, drive traffic, convert a percentage of that traffic, and then maintain and grow that online business is completely misunderstood. If you want to create a new brand, new site, you should budget in at least 1-2 full time people to get it up and running and then at least one full time person forever, more if it takes off. I’m not talking about anything technical here – I’m talking about marketing. If you build a website – nobody comes, until you compel them to do so.
The logic of starting a new brand and/or a new site breaks down when you truly evaluate the effort required and the fact that your investment should be in your existing brand’s success online. One of the biggest mistakes we see in online strategy is people think their website is monolithic – one topic. You can have a very large web presence where you drive traffic to different areas of your domain for specific purposes. If you want to sell banners to consumers, consider a banner site embedded in your primary domain. It takes a little more thinking but then you’re building the authority of your primary home on the web – your domain.