What is the first thing that comes to mind when you hear ‘e-commerce’?
For many people, it is ‘disruption’ (in terms of everything). Statistics suggest that global e-commerce sales stand at 3,535 billion today and are expected to reach an astonishing metric of 6,542 billion by 2023 alone.
And if you still need convincing, here are some more eye-opening statistics about how digital sales have disrupted consumer habits.
- The estimated number of global digital buyers reached 1.92 billion this year.
- About 65% of shoppers compare prices on their smartphones while shopping in physical stores.
- Nearly half of the digital shoppers today directly visit the websites of large e-commerce marketplaces to shop. But, the most astonishing statistic of them all is that 45% of all the small businesses in the United States do not have a website.
There is no denying the fact that the future of e-commerce is favourable to small business. So let’s dive in deeper and understand how e-commerce can impact your small business, and how you can leverage it to dramatically boost your sales.
Benefits of E-commerce Business Model for SMEs
1. Significant Increase in Revenue
E-commerce takes your business to regions where a brick-and-mortar store would not be able to break into. Every SME battles the limitations of being confined to its geographical location of operation. An online store makes it possible for you to reach a larger audience base, potentially anywhere in the world.
And naturally, this has a significant effect on your sales. The reason being that an e-commerce store is based on the ‘Purchase Funnel.’ If you’re not familiar with this concept, let me introduce it to you below:
Leveraging an e-commerce website for a SME’s business increases the number of prospects in the awareness stage. And since more prospects travel through the funnel, conversions are ultimately boosted.
2. Better customer experience
Customers can shop anywhere, anytime they choose. Since they do not have to travel to your store physically, you gain substantial brownie points. In fact, you can even introduce apps and tools that enable customers to try the merchandise online before they make their buying decision. For instance, virtual change rooms are proving to be the future of online fashion shopping with brands like Lenskart and Myntra allowing customers to upload their faces or avatars and try on products in real time.
Additionally, other customer engagement tools, such as Live Chat, make customer support a breeze. Support agents can actively handle customer queries in real-time by adding a minimalistic widget. In fact, leading market players in the space, such as Acquire have even gone a step ahead and provide extended capabilities, like screen share, voice, video call, and co-browsing. In this way, you can reach out to the right customer with the right message and handle redundant queries with auto-messages.
3. Lower Marketing and Distribution Costs
The entire cost of conducting the business can be brought down by taking your business online. Prominent costs that can be reduced include:
- Advertising and Marketing Costs: E-commerce stores do not require traditional channels of marketing and advertising. Their customer journeys and purchase funnels shift from real to virtual backdrops. Hence, cost-effective digital marketing channels, such as organic search engine traffic, social media traffic, and pay-per-click campaigns become more relevant.
- Operational Costs: A welcome side-effect of having a digital store is an overhauling of operations. With significant data in your hands, it becomes feasible to automate tasks, such as automation of check-outs, billings, inventory management, and payments.
- Economies of Scale: By eliminating the need for physical stores to drive expansion, rental, and management costs can be significantly controlled. Thus, scaling can be undertaken without incremental efforts.
4. Visitor Tracking and Analytics
E-commerce websites can deploy a host of tools to analyze the buying patterns and shopping behaviors of visitors constantly. The resulting data can then be used to optimize your storefront in a way that best matches your customers needs. You can consider this as the digital equivalent of reshuffling the merchandise in a physical store. Details that can be tracked include:
- Channels that are bringing in the most traffic.
- Pages that visitors are navigating before purchasing.
- Demographic details of your website visitors.
- Website elements that have high levels of engagement.
Advanced Analytics tools, such as Crazy Egg, Mousetrap, and FreshMarketer enable users to analyze the engagement of visitors in real-time. It is practically impossible to introduce similar technology in physical stores.
5. Faster Time to Market
The speed with which you can introduce new products into the market (or similar products in a new market) is critical to sustain a competitive edge. Time to market refers to the time between the point of conceiving the product or service and the point when it is actually accessible to the customers in the market.
Since the e-commerce model reduces existing complexity in SME supply chains, products can reach customers faster. And this stands true for both local and foreign territories. By eliminating bottlenecks in communication and automating processes, products can reach customers significantly quicker.
6. Better Accessibility and Ease-of-Shopping
According to the Global Online Consumer Report by KPMG, the main reason why customers shop online is that they can do so 24/7. This closely followed by the ability to compare prices.
Customers can easily find a range of products to purchase, compare features with similar products of other brands, key in a combination of various filters, and even specify the price range of every product type. This experience has better accessibility and ease-of-use, and features that would be impossible in your brick-and-mortar store. And in case a customer does want to visit your physical store, he or she can first check out your digital catalog to streamline their in-store experience.
The resulting shopping experience is rapid, appropriate, and user-friendly.
Pitfalls of Ignoring the E-commerce Model for SMEs
After the rampant proliferation of digitization and the e-commerce business model, you’d have to be living under a rock to ignore all the new opportunities available to retailers. The perils of ignoring e-commerce opportunities can include:
- Poor Branding and Customer Relationships: Today, 90% of the customers read online reviews before visiting a business. Without an e-commerce store, it’s hard to form long-lasting relationships with your customers, and your digital reputation might never take off.
- Missed Opportunities: Digital selling has opened up a new world of commerce and has revolutionized the way businesses interact with their customers. Similarly, smartphones have practically become the greatest marketing channel ever created. If you don’t pounce on such opportunities, your competitor is bound to outsmart you sooner or later.
- Asking for Wasteful Expenses: At a time when your competitors are running campaigns that are bagging customers at a dollar each, you might be throwing money into dying channels such as radio, printed media, and television adverts. Not only will this significantly increase your advertising spends, but it will also paint your brand as outdated and orthodox.
The advantages of having an e-Commerce website are multi-fold. Not only does it save time and energy, but it also tells your customers that your business is ready to embrace their growing needs.
“Amazing things will happen when you listen to the consumer.” – Jonathan Midenhall, CMO of Airbnb.
“The opinions expressed by BizWitty Contributors are their own, not those of BizCover and should not be relied upon in place of appropriate professional advice. Please read our full disclaimer."