WHAT IS E-COMMERCE?
Essentially e-commerce is an online shop window that is open 24/7. It is an online retail system that allows consumers to browse and purchase items from an online platform.
These items could be tangible products, digital products, services, subscriptions, or experiences.
E-commerce businesses can also utilise third-party online marketplaces such as eBay and Amazon to sell their items.
This method of marketing is rapidly growing in popularity and carries many benefits for businesses who decide to use it. Data from Optimonster shows that 93.5% of global internet users have bought products online. This figure is only increasing and businesses can take advantage of this online system to boost their sales.
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WHY SHOULD I USE E-COMMERCE IN MY BUSINESS?
- THE DEMAND FOR DIGITAL IS GROWING
Over the last 3 years, there has been a 169% increase in online shopping activity from new and infrequent users. This figure displays the rapidly increasing demand for e-commerce platforms but also shows that the number of customers that are comfortable with shopping online is also growing.
From a consumer point of view, online shopping is flexible, helpful and convenient.
Consumers can access these online shopping platforms anywhere and anytime without the need for visiting physical shops. This prevents the need to travel to shops and plan days around store opening times.
It also allows customers to compare products and prices more easily as everything is in one place. Rather than visiting different shops that may be miles apart, customers can simply flick from one internet tab to another.
- REDUCED COSTS
Using e-commerce is cost-effective and can reduce operational expenses.
There is less need for brick-and-mortar premises and fewer in-store staff will be required due to a larger number of customers shopping online. This reduces costs associated with running an in-store business as there is less need for buying or renting physical premises.
Additionally, e-commerce can also reduce the pressure on customer service teams as e-commerce is a type of customer self-service. Customers can easily navigate their way through a well-structured purchasing process and if any problems arise, they can refer to the help section of websites where they will usually find FAQs and chatbots to assist them with their queries.
Utilising e-commerce can also help with marketing efforts.
One of the ways in which this is done is by word-of-mouth. Reviews of your brand and products can be left on all types on websites and social media platforms which can reach potential customers and encourage them to purchase from you.
Data from the Digital Marketing Institute shows that 82% of people trust social networks to guide their purchasing decisions.
E-commerce marketplaces are visual platforms, thus businesses can incorporate all types of visual marketing such as infographics and videos into their e-commerce platform to encourage more sales, without the need for high advertising costs.
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- GATHER ALL-IMPORTANT DATA
Using e-commerce grants you access to valuable data that you would not be able to obtain in a physical store. This data allows you to understand and analyse your audience better.
Analytical tools provide insight into your customer’s buying trends and patterns which can help when creating targeted and personalised advertisements such as customised emails. As a result, these advertisements will be more effective and will encourage future buying.
These analytical tools can also show how well your marketing strategies are working. This also gives you a better understanding of which of your marketing campaigns resonate the most with your audience so that you can focus on these marketing methods.
Businesses can also gather data by using online surveys that can appear anywhere in the purchasing process. Consumers are more likely to fill these surveys out as they tend to be quick and simple. This data can then be used to improve your customer experience.
E-commerce can also make managing stock levels easier. Businesses can see when stock is running out in enough time to re-stock the products. This reduces the risk of lost revenue from out-of-stock items whilst not having too much overstock.
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- INCREASE YOUR REVENUE
E-commerce is a simplified method of shopping that is easy and convenient. This will automatically attract more customers and increase revenue.
E-commerce businesses are open 24 hours a day, 365 days a year. This generates more sales as your consumers have access to your products all day every day rather than only during opening hours.
Businesses can increase revenue by using some of the data methods mentioned above to cross-sell (encouraging the purchase of an additional product) and up-sell (encouraging the purchase of a higher-value product) products. This encourages higher basket values.
- ACHIEVE A WIDER REACH
There are no limitations to audience reach when using e-commerce. Introducing e-commerce into your business is an excellent option if you are wanting to broaden your business horizons.
For example, if a seller owns a local clothing store but wishes to expand nationally, or even globally, they can with e-commerce. This will increase their customer reach without the high level of costs associated with expanding a business.
An example of this kind of successful expansion is the company Gymshark.
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Gymshark is an activewear e-commerce brand that is now worth over £1 billion. This business started in a garage where the founder, Ben Francis, sewed and printed logos onto gym clothing using his grandmother’s sewing machine. Francis then expanded his business online and in less than 10 years, his e-commerce business is now valued at over £1 billion.
- FLEXIBLE PAYMENT METHODS
E-commerce offers many flexible payment methods including credit or debit cards, pay on delivery, net banking, EMIs and pay-later options. This prevents sellers from losing potential revenue due to limited payment options.
Many of these methods are not available in-store, for example, pay-later options. As of 2022, 17 million consumers in the UK have used the buy now pay later options such as Klarna. These methods prevent loss of sales as consumers can borrow money to make purchases when they need to, and they can repay the money with a frequency that works best for them.
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For more information and advice about how e-commerce will benefit your business, don’t hesitate to contact us.