E-commerce always was the way of the future, but now it is more than ever before. The outside world has become a place of uncertainty, caution, and social distancing, bringing to light the many advantages of e-commerce for businesses and consumers.
At Become, we’ve seen an increase in loan applications from e-commerce businesses that wish to grow and meet this increased consumer demand.
Why is e-commerce set to grow?
E-commerce was growing predictably up until COVID-19 put it on an expedited trajectory, accelerating the industry’s growth by 4-6 years! The pandemic shone the spotlight on the many e-commerce advantages, particularly that of convenience. During May alone, during the Coronavirus lockdown, global e-commerce sales reached $82.5 billion, a 77% increase over the previous year.
According to a Deloitte report, 85% of retail sales were through brick and mortar stores up until 2019. Then along came COVID-19, causing traditional retailers to scramble to get online and e-commerce numbers soared. The biggest shift in the US has been in the grocery shopping market. In March 2020, 42% of US consumers shopped for groceries online at least once a week compared to just 22% in 2018 (GeekWire, 2020).
Experts don’t see this as simply a short-term fix for Coronavirus concerns, and it’s been predicted that COVID will increase US e-commerce by almost 20% over the next year. Coronavirus served as a catalyst, propelling consumers into the online shopping world, consumer behavior that’s likely to continue, even once the Corona dust settles. More than 50% of online grocery consumers state that they’re planning on shopping online even after the pandemic.
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Top 5 advantages of e-commerce for consumers
1. Lower prices
The lower costs of running an e-commerce store versus a physical store translate to cost savings for the consumer. This is one of the biggest e-commerce advantages. Online prices are typically lower than traditional store prices, and e-commerce sites are able to offer more discounts and promotions that are easier to claim.
2. Convenient and safe
Shopping when you want from where you want is far preferable (and a whole lot safer) than heading out in this COVID reality we’re now living in. Coronavirus aside, there’s also something to be said about shopping from your bedroom, without having to venture out, wait in lines, battle cold weather, and all the other challenges that go along with consumerism.
3. Wide product variety
In the global marketplace that is the internet, consumers can buy electronics from China, books from England, clothes from Paris, and good old US products all from the comfort of home. The width and depth of products sold online are unbeatable.
4. More informed decision-making
Information is literally at your fingertips when buying online, including:
- Reviews from real customers – this is probably the most effective
- Product descriptions
- Usage videos
- Product guides
- Social validation
Comparison shopping is another one of the top benefits of e-commerce to consumers, who can easily compare products, brands, and websites with even side-by-side comparison possible. Many comparison shopping sites exist with the sole purpose of enabling consumers to compare products side-by-side based on price and discount metrics.
5. Saves time
In an age where time is a rare commodity, shopping online provides massive time savings to the consumer. Since 63% of consumers start their shopping journey online, it makes sense to be able to buy where you already are (Thinkwithgoogle, 2018).
No need to head out, shop in-store, wait in line, and then journey back home when you can access a greater product variety at a lower price from the comfort of home.
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Top 5 advantages of e-commerce for business
1. Lower costs
Going online eradicates the need for a physical storefront, meaning lower fixed costs for the business. Also, since most e-commerce is automated, fewer staff members are required. Marketing an e-commerce store, using Google Adwords, e-commerce Facebook advertising, and social media marketing, for example, is much more cost-effective than promoting offline These cost savings translate to lower prices for the consumer and more sales for the business. This is one of the key benefits of e-commerce for businesses.
2. Customer data
Selling online gives the retailer access to a goldmine of customer data that is just not accessible through brick-and-mortar retailing.
Not only do online consumers typically provide their name, email address, and phone number when checking out or registering on a site, but they also provide a wealth of consumer behavior and demographic data, available through Google Analytics, that can help online retailers optimize the consumer journey and market more effectively and accurately.
E-tailers are also able to nurture and retarget consumers precisely, based on their stage in the journey. For example, using data insights, an online retailer can email potential customers who have abandoned their carts, motivating and reminding them to check out their purchase, and can even use retargeting advertising to nurture leads that have not yet purchased.
3. Wider customer base
Going online with e-commerce sites makes geographical boundaries become inconsequential. You could sell your products to online shoppers across the country or even across the globe. You’re not limited to shoppers in your physical location.
The internet also opens up your retail store to different niche audiences that you wouldn’t have access to. By using multiple online touchpoints, you can access customers from all angles by going where they already are, such as social media, forums, and Google search.
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4. Open always
When you sell online, your business is open 24/7/365. Even though your customer support may be sleeping, automation ensures that the rest of the sales process is always flowing and consumers can buy on any day, at any time.
5. Easier to scale up
Scaling up or growing a physical store requires more floor space (and the expense that comes with it!), employees, and shelf space. In contrast, it’s very simple to grow an online store, which is one of the less obvious benefits of e-commerce for businesses.
All you need is more inventory, a few digital tweaks, and possibly more storage space, which is far less costly than storefront space. Being online also eliminates the need for opening a new store in another location as you’re already within the reach of a global marketplace.
Online, in-store, or hybrid?
What’s in store for your business in 2020? Based on the advantages of e-commerce to consumers and businesses, as well as the e-commerce statistics, it’s clear that online selling is the way forward. But that’s not to say that physical stores will die out after Coronavirus.
If you’re already online, you’re in a prime position to capture the many consumers that have turned toward online shopping in these uncertain times – make sure to track your profit and expenses so that you can always optimize for profit!
For those of you that are still brick-and-mortar, now’s the time to get your store online, perhaps even using your physical store as an order fulfillment center when foot traffic is low.
E-commerce funding can help you grow your e-commerce store by ordering higher quantities of stock in advance and expanding your marketing budget so that you’ll be able to capture as much of your target market online as possible and grow – the demand is already there, you just need to grab their attention!