Ecommerce is booming. Why? It has numerous benefits, for both consumers and businesses.
Here we outline the 15 most important benefits of eCommerce to business, and 4 key points to consider if you’re thinking about moving to online selling.
The 15 most important benefits of eCommerce to business.
The Covid pandemic supercharged the need for consumers to use eCommerce, and businesses – both large corporates and SMEs – have worked hard and fast to improve their online experiences for users. The rapidly shifting global environment has ultimately created more opportunities for consumers, and moved businesses more rapidly into a new way – and a new world – of operating.
Here we explain the 15 most crucial benefits of eCommerce to business – from its global reach, to its reduced costs and the ability to lay the groundwork for more advanced technologies.
1. You can sell to more locations – even internationally – with eCommerce
A key benefit to eCommerce is the ability to break down global barriers. Compared to a bricks and mortar store, eCommerce can reach customers in every corner of the globe. Such outreach does raise issues around taxation, Government regulations, transport, language and culture, and other factors. But these challenges are generally outweighed by the benefits of being able to reach customers online in ways that a physical store simply can’t.
2. Ecommerce transactions are more efficient
Ecommerce transactions are quicker and more efficient – because instead of wandering around a store, your customers can browse categories or search for what they need. Or you can offer them products they might be interested in based on what they look at.
Doing this well requires an in-depth understanding of your customers, and this in turn requires investment into data analysis of their shopping habits and broader market trends. It also requires smart sales strategies, such as surfacing the right products at various points in the customer journey.
Efficiencies are also created by the customer’s ability to access the eCommerce store through various devices, including their phones. Purchases can be made while on the move, on impulse and in response to a particular need at that time. This will evolve as eCommerce technology does and the purchasing experience becomes more sophisticated and user-friendly.
3. Costs are reduced with eCommerce
Ecommerce stores are far more cost-effective than physical stores. Running a bricks-and-mortar store requires the payment of rent, maintenance, sales staff, supply chains, and more. While some of those costs are replicated in an online store, many are not.
4. Profit margins are greater with eCommerce
Profit margins rise with the use of eCommerce, given the decreased cost and ability to reach more consumers, and in more specific ways.
The 2021 Unleashed manufacturing report found businesses with eCommerce integration in the United Kingdom had a 57% average profit margin, compared to a 46% average profit margin for those businesses without eCommerce capability. Despite this very clear benefit, only 38% of UK manufacturers in the study were eCommerce enabled.
5. Comparison shopping is easier with eCommerce
The benefits of eCommerce shopping for consumers are multi-faceted, particularly if the business has invested in analysis of individual customer journeys and shopping preferences. This allows a business to surface the right products to the customer at a time that suits personal preferences.
For example, using ‘often bought with’ or ‘works well with’-type taglines means the shopping experience is enhanced and sales are optimised. The eCommerce experience also allows for easy comparison shopping, where customers can compare the various specifications of products such as features, dimensions, and pricing, before making a choice about their purchase.
6. Response times are faster with eCommerce
Increasingly sophisticated tools enable rapid responses to eCommerce consumer queries. For example, customers who want to know when an item is back in stock can use the ‘notify me’ function. Refunds can be processed digitally, and chatbots can be used to respond to queries at any time of the day.
7. Products are easier to find for customers with eCommerce
An effective eCommerce user experience can offer customers an easy digital pathway to the products they need, along with offering complementary products, freebies or discount tokens.
Customers using eCommerce sites are able to browse categories using the UI navigation, use a search function, or even save products in a wishlist. This is a far superior experience, in terms of efficiency, than attempting to find goods in a physical store, particularly if the layout is unfamiliar and customers don’t know where goods are shelved.
8. You can offer a better range of goods with eCommerce
As an eCommerce store is not restricted by a physical size or layout, it can offer a far greater range of products. This means a customer can choose according to their own specific need – whether that’s dictated by price, quality, delivery time, or other factors that are important for that buyer.
9. You can sell niche products with eCommerce
Because they’re not limited by locality, eCommerce stores can offer niche goods or satisfy particular demands for a customer base. Products that may not be popular enough to sustain a physical store can therefore be sold via an eCommerce site.
10. Ecommerce offers more payment options
Ecommerce stores accept several types of payments, ranging from instalments to credit card payment and internet banking – giving consumers more options and making purchasing easier.
The ability for websites to save payment details also makes the experience easier for consumers, and more effective for business. Businesses can also have more confidence over cashflow, given payment is made at point of sale rather than invoiced. This enables easier forward planning, as the cash is ‘in the bank’ rather than waiting on payment.
11. Your store information is always available with eCommerce
At the very least, an eCommerce store can provide store information like opening hours (including notifications if they change), alongside information such as shipping delays, staffing shortages, and other details which may impact service.
The ability to provide such information has proved particularly valuable through the Covid pandemic, which created massive transportation and supply chain issues, along with staff shortages due to illness and isolation requirements.
Beyond such basic – but very useful –information, eCommerce stores offer the capability to customers to shop or browse around the clock, thus increasing the sales opportunities.
12. Personalisation is possible with eCommerce
The ability to gather data and user preferences through online shopping means customer profiles can be refined more and more over time. This means a customer who returns will receive a more personalised eCommerce experience, with products being surfaced to meet their needs, wants, or aspirations.
This may mean surfacing a product they have bought before, or one which is similar but higher end (and potentially with a higher profit margin). It could be done through cross-selling or a prompt should they leave a product in the cart. It may also mean surfacing a product that customers with similar profiles have purchased, thus expanding the customer’s knowledge of what is available.
When done well, this creates a positive experience for the customer, who should be left feeling that the business has served their needs without being too pushy. This sort of personalisation is becoming increasingly sophisticated, with more bespoke and specific offerings set to be offered to individual customers in the future.
13. Tools like augmented reality are available to use with eCommerce
As technology advances, value-adds like virtual or augmented reality can provide a highly engaging experience for eCommerce customers. For example, consumers may be offered the ability to ‘test’ what an outfit or product will look like by layering it over a personal image.
This allows consumers to better understand how a product will be ‘in situ’ before buying it, and leads to greater satisfaction with both the online experience and any purchase. In turn, this is likely to lead to better customer retention and goodwill – and will help the business be more competitive.
14. Ecommerce gives you more customer data
One of the greatest advantages of eCommerce is its inherent capacity for data collection. Being able to record – ideally through the use of opt-in permissions, given privacy concerns – the various personal details of customers creates a valuable trove of data which can be used to improve the eCommerce experience both generally and for the returning customer.
Data such as contact details, shopping habits and average spend all contribute to the site’s ability to better design an experience for the customer.
15. Search engines provide marketing possibilities for eCommerce
There is also a significant upside for eCommerce sites looking to invest or upskill in search engine optimisation. The marketing possibilities for eCommerce include buying advertising to appear in searches, maximising SEO in the site, and ensuring each product page is created in the most SEO-effective way – usually by using phasing and words that match what customers are searching for.
Considering a site’s SEO impact is vital, given how often customers will simply search for a product rather than a particular brand. A site that surfaces on the front page of a Google search generates leads and sales in ways that more ‘buried’ sites cannot.
What are the advantages of eCommerce to customers?
As has been outlined above, the advantages of eCommerce to customers are severalfold.
In a world that’s been upended by the pandemic, the need for businesses to invest in and upskill in eCommerce has never been more important. Ecommerce sales are soaring, growing 50% to $US87 billion during the pandemic – and they’re not expected to slow. The rise of new payment tools that appeal particularly to the young, such as Buy Now Pay Later, is contributing to the explosion in online sales.
How to optimise the benefits of eCommerce for your business
While the benefits are clear, the ability to optimise the benefits of eCommerce for your business may seem more complex. A good way to start is to consider how inventory management fits into an eCommerce strategy. Doing this enables a coordinated expansion from physical stores into an eCommerce ecosystem and ensures the various advantages will be realised.
1. Choose the right platform
Firstly, it’s important to choose the right eCommerce platform. This will require an audit of your business’s needs, and an understanding of what each platform offers – from integrations, to payment options, to display, security, and so on.
2. Find the best eCommerce inventory management software
The right eCommerce inventory management software will then be required to capture sales across multiple channels, calculate the margins for each product, and assess stock needs and demands in real time.
3. Remember that point of sale is critical
The point of sale or payment software that is used will also make a huge difference to the customer experience, business profitability and your ability to future-proof the eCommerce product for innovations in this space.
4. Plan your fulfilment strategy
Finally, it will be important to figure out a fulfilment strategy to ensure products are with the customer in good time and in good order. Again, software that allows for real-time assessment of inventory movement is invaluable for ensuring efficiencies and maximising customer satisfaction and profitability.
Outtakes for businesses setting up an eCommerce arm
While shifting to an eCommerce platform can be a complicated manoeuvre, the advancement of technology in recent years has made it far easier than before.
SaaS cloud-based products, for example, are far more accessible to businesses now, as they no longer involve large set-up costs. All that is required is a subscription – and a desire to take the business up to the next level.