In an A-for-effort, even if perhaps misconceived, the State of Hawaii hosted a novel event that occurred at Waikiki’s Ala Moana Hotel yesterday. More than 250 attendees showed up for the first “Made in Hawaii Presents: Your Future in E-Commerce” conference. It was sponsored by the Hawaii Department of Business, Economic Development and Tourism (DBEDT). The state said that “Industry leaders from Amazon and Shopify shared tips and insights on how Hawaii manufacturers and retailers can succeed in the e-commerce world.”
You may be wondering how this relates to Hawaii visitors. Ever since Covid and the state’s ongoing fatigue with over-tourism, there has been a renewed interest in finding ways for the islands to be less reliant on visitor numbers. This conference speaks to Hawaii trying, but having few ideas as to what to do beyond being a beautiful visitor destination.
The conference started with beginner-level “Starting E-Commerce.” There Amazon Marketplace’s seller growth team shared about platform selection, online store setup, product curation, and rudimentary marketing strategies.
Shopify shared “Mastering E-Commerce,” together with Love Fitness Apparel and Coco Moon Hawaii, two successful Hawaii-based e-commerce companies.
Hawaii businesses face overwhelming odds against e-commerce success.
1. Hawaii’s geographic Isolation. Hawaii’s remoteness from the U.S. Mainland presents logistical and financial challenges in terms of shipping availability, delivery timeframe, and cost. The distance even prevents Amazon from effectively shipping from mainland markets to Hawaii, which is certainly telltale. Amazon Prime delivery times in Hawaii are simply awful, and we can generally expect to wait weeks to see ordered goods arrive. These factors make Hawaii far less competitive compared to businesses located closer to major hubs. Not only that, but this puts Hawaii businesses at a disadvantage in their ability to offer free or discounted shipping to customers.
2. Limited market size for sales within Hawaii. Hawaii has a relatively minuscule population compared to the mainland, further limiting the in-state potential customer base for Hawaii businesses. This smaller market size makes it challenging for businesses to achieve economies of scale, among other things.
3. High cost of living. Hawaii’s cost of living, the highest in the US, translates directly to higher operating costs for local businesses. That includes all expenses from labor, first and foremost, to rent, utilities, and products. This factor erodes profit, making it difficult for Hawaii businesses to be competitive, especially in an online marketplace competing with companies based in lower-cost areas.
4. Limited human resources. Hawaii businesses are challenged beyond mainland companies in terms of the resources and expertise needed to effectively deal with e-commerce marketing complexities, again making it difficult for them to compete.
5. Limited technology, internet, and payment Infrastructure resources. While Hawaii has certainly improved in these areas, it still lags behind the mainland. The development of websites and other technologies must often be sourced remotely due to limited resources. Banking options are also not those from the mainland and are limited.
Hawaii travel looks to be here to stay.
Overall, Hawaii businesses face unique and onerous challenges in terms of the e-commerce space among other tourism alternatives. It takes strong entrepreneurship, innovation with unique products, and the ability to adapt to Hawaii’s challenges in order to succeed. E-commerce won’t work for most Hawaii businesses. We note that one of the other success stories is Anahola Granola, made in Hanapepe on Kauai, and available throughout Hawaii and beyond, and shipped to wherever you are.
