We know the phrase ‘new normal’ is the last thing anyone wants to hear, but it’s our reality as the pandemic has altered the way in which businesses and consumers are interacting. The mandated lockdowns and closures of non-essential businesses means consumers have to buy differently. And COVID-19 has forced companies to become innovative and adopt approaches that shift traditional brick and mortar selling to e-commerce online shops.
The same levels of spending we saw during the pandemic is equivalent to economists’ prediction of e-commerce revenue in the next 4-6 years: in May of 2020 alone, “total online spending hit $82.5 billion dollars”. At first the transition for businesses to sell online may have proved difficult but it’s well worth it in the long run as consumers continue to shop online, even as physical stores begin to reopen.
It is a small silver lining to an otherwise bleak situation and drives the point home that it was only a matter of time before we saw a monumental shift in the patterns by which consumers are shopping. That being said, it is important to understand just how advantageous an e-commerce presence is. Below you will find our top 4 reasons to establish an online shop so you can reap the benefits that come from this constantly evolving digital world.
Boost your sales
The low costs associated with e-commerce on both the business and consumer end can lead to marginally smaller overhead costs. This can generate a higher consumer surplus and profit for the business. On the consumer side, most online marketplaces are free to sign-up for and only charge a small percentage fee for the goods sold. The buying process is relatively easy and with advanced supply chains and improved delivery methods, the time at which that good arrives to the consumer’s doorstep has been cut in half. An efficient purchase and quick delivery of desired goods increases consumer happiness which leaves them coming back for more and building that brand loyalty that is so important for a business to have.
For businesses, a physical store has a lot of costs tied to it. From the physical displays, to payroll, to electricity, or whatever other costs you incur, chances are you are spending as much, or more money on maintaining the store than you are marketing or selling your product or services. Cutting costs could allow for more flexibility when it comes to the decision to invest in paid ad campaigns. Although social media and organic searches are a relatively low-cost way to advertise, spending a little more to advertise through Google or an advertising agency can play a role in boosting sales even more. With online ad campaigns the exposure to your business is increased ten-fold which helps improve visibility to your products or services.
Increase accessibility to your products or services
The opportunities for online shopping are endless. With a quick search a consumer can find just about anything they are looking for from a multitude of sellers. The increase in competition has caused competitors to lower their prices in order to keep customers coming back. Because of the variety of sources and the distinguishable price options between businesses, consumers are more prone to shop online than in physical stores.
According to the website, Let’s Talk About Money, “shopping online is preferred across generations, as 51% of all American, 67% of USA millennials, and 56% of USA Gen Xers prefer shopping online to shopping in-store”. Providing a platform that showcases your goods or services opens the doors to the individuals in these statistics that desire products they can buy at the tips of their fingers. Not only can you reach your normal geographic demographic but now the capability to sell to other national, even international, markets is possible with an online shop.
Not all brick and mortar stores are able to offer delivery for their products, but since E-commerce stores mostly utilize delivery for getting their products into customer hands, the opportunities to expand current customer networks increase substantially. Single parents who can’t leave their kids alone, elderly individuals who are not able to drive, or people without functioning or too small of cars, all benefit from having products more accessible with delivery.
Create opportunities for customer engagement and retention
With online shops it is easier to interact with more people online, and from different geographic markets, than in-person shopping. Chat boxes on websites and direct messaging on social media accounts allow for a conversation that is not forced by an employee but rather initiated by the consumer. E-commerce gives consumers the opportunity to browse through product or service offerings without the pressure that being in-store, or dealing with an employee, can have on their decision-making process.
Online rewards programs are another form of engagement where consumers can see the accumulation of their points on their account which might subconsciously cause the consumer to shop there more frequently. The costs of punch cards, coupons, and other printed marketing material is saved because digital campaigns can usually be run relatively cheaper and more efficiently than campaigns that use physical forms of advertisements and promotions. A lot of the time rewards programs can help retain consumers and increase the loyalty they have for the business!
Retaining and retargeting existing customers is vital to the success of a business. According to GoE Business Insights “a 5% increase in customer retention can allot for a 75% increase in profits”. The use of rewards programs and a compatible online shop helps not only draw in new customers but makes it worthwhile for previous customers to return.
Online shops provide a new and profound system for transparency in the consumer buying process. Today, many consumers would rather order online where they can see reviews and ratings than risk buying something or requesting a service from an organization they may be unfamiliar with. Industry competitors that display reviews are often hailed as being more trustworthy and can pull customers away from your business.
Like mentioned before, the low costs associated with online selling enable money to be placed in other areas of the business-like marketing, back-end improvements, or promotional campaigns. These provide a competitive edge because you are working to create an easy-to-use website that draws customers in and positions your business ahead of the competitor in the customer’s mind.
Businesses that don’t offer the ability to shop online can sometimes be seen as “outdated”. Utilizing e-commerce systems allow you to match the sales potential of your competitors. If they are selling online, why shouldn’t you? Having an online store allows you to drop new products before your competitors do or support a promotional campaign that rivals that of your competitions. The technological features that come with an online platform, like analytics, can track user’s behaviors and purchases which enables you to adjust your sales approach accordingly. If a business doesn’t have an online store and is deemed “outdated”, it’s hard to make changes that keep customers coming through the doors because you haven’t properly determined the reasonings behind their decisions or behaviors
The COVID-19 pandemic helped trigger the rapid transitioning from physical brick and mortar stores to online shops through e-commerce platforms. Despite the challenges it has presented, not only does it provide an additional channel for sales, but it also expands your customer base, creates a competitive advantage, and allows an increased level of customer engagement. Demand for convenience and transparency are a necessity for consumers, and online shopping allows you to meet those needs. Utilizing e-commerce platforms and establishing online shops is essential for staying successful in a digital environment where goods and services can be purchased in mere seconds.
If you’re interested in exploring e-commerce options for your business, contact us today!