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eCommerce now accounts for roughly 14% of total retail sales. In the US alone in 2018, online retailers made a total of $504 billion in sales revenue. Entrepreneurs are able to set up an online presence at a fraction of the cost to set up a physical retail store. Smaller business owners are able to build their online presence and grow their brand with a lower investment through eCommerce solutions. Here are the key benefits and reasons why eCommerce is vital for small businesses.
Lower Operational Costs
One of the most important aspects of starting up a business online is the lower start up costs compared to setting up an actual store. The operational costs of a brick-and-mortar store, location rental charges and electricity bill must be taken account for when setting up a physical store. Store location for a physical store is a key factor to ensure you can drive foot traffic to your store which significantly increases the startup investment that has to be put in finding prime real estate. For smaller brands looking to start online, there are no location charges or other overhead costs involved. An eCommerce shop whether it is on your own standalone website or on other marketplaces such as Amazon will still require investment for high-quality content creation and image work however it is more reasonable for small to medium-sized business owners who are starting out with limited financial capacity. All the systems in place for an online store from inventory management, checkout, payments and delivery are automated if it has been set up correctly. Even by outsourcing your eCommerce managed services to an end to end eCommerce service provider will not cost as much as setting up a retail store.
Wider Customer Base
eCommerce provides customers with convenience and a simplified shopping experience. Customers can search and browse for products of their choice online through Google, Amazon or other marketplaces online. Not only does this lead to the visibility of your product online which leads to the opportunity of sales conversion, but it also boosts brand awareness. It is integral to ensure that the content being used within your product pages is matched with consumer searches on the marketplace in order to drive impression and conversion of your listings. eCommerce websites or marketplaces are open 24/7 and aren’t limited to opening hours, unlike a brick and mortar store. Customers can make purchases at any time no matter which time zone they are located in. This availability allows for convenience which in turn increases sales. Through the use of pay per click advertising (PPC) or targeted marketing, online sellers are able to target customers and capture new audiences locally and globally.
Consumer Purchase Decision
Through online product listings and digital merchandising, online retailers can customize how they want to showcase their products to the end consumer. Through the use of great photography work by incorporating studio macro photography, lifestyle images and creative infographic graphic design work, sellers are able to provide visuals for consumers to drive conversions for the product. Reviews also play a fundamental part in the success of a seller online. Customers shopping online want to see what others have to say about the product which highly influences their purchase decision. This increases the likelihood of consumers spending more money on your products. Not only does this lead to increased business revenue, but it also increases consumers trust and loyalty with your brand which will lead to returning customers.
Scale Business Quicker
Through eCommerce, online retailers are able to scale their business much quicker than physical retailers as there are no limitations to inventory and warehousing spaces. The challenge and cost of finding a bigger space and renovation make it hard for retailers to extend their product range when only selling in physical shops. Online retailers are able to outsource their warehousing and logistics management to third-party fulfillment centers at a fee which allows them to focus on their core business and business development.
eCommerce is essential for start-up businesses and SMEs looking to launch their brand whether that is through their own standalone online retail website or through a mega online retailer such as Amazon. Going online benefits small to medium sized businesses and levels the playing field allowing them to reach a wider customer base across the globe. It is imperative to speak to your local eCommerce service provider to understand exactly what can be done to help you grow.
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