E-commerce is not a new word. The earliest form of e-commerce made an entry nearly four decades ago! But it remained limited to a very narrow category for over 25 years and did not figure in our everyday lives. It was back in the late 1990s that the idea of shopping online started gaining some acceptance. Even at that stage, people only considered buying things online when they could do without the touch and feel experience. Brick and mortar stores were all the world knew of retail until then.
Come 2021, the concept of shopping has assumed a whole new meaning since e-commerce is the default option for today’s buyers. The Covid-19 global pandemic caused a paradigm shift in consumer behavior. As a result, the global e-commerce market touched USD 26.7 trillion in 2019 and jumped by a further 4% last year, according to a recent UNCTAD report. Now that the world has come to terms with the presence of Coronavirus, things are improving somewhat for brick and mortar stores. But e-commerce is here to stay, and businesses have some compelling reasons to shift to at least a hybrid, if not a completely online model.
Let’s take a look at them:
Reach a wider audience
In an online model, businesses have realized that they can expand their audience reach like never before. They do not need to display their wares in physical form anymore. Geographical barriers like distance and time no longer have an impact on sales. Customers have overcome their initial apprehension of shopping based only on online pictures. That is why e-commerce stores and those operating with a mix of online and offline models ensure that they display high-quality digital imagery on their sites.
Physical stores cannot operate round-the-clock, no matter how much they might want to! But an e-commerce setting allows them to serve customers at any hour of the day (or night). Since e-commerce spells convenience and shopping without traveling anywhere, people are shopping a lot more than before. That automatically reflects positively on the company’s balance sheet!
Since there are no physical space requirements in an e-commerce model, a business can eliminate the rental, storage, and overhead costs. For a retail store, it also implies a reduction in salaries. If there is still a need for some physical space, it can be much smaller than before, meaning the business can enjoy better profitability.
Modern marketing opportunities
An e-commerce site presents numerous opportunities for innovation through digital marketing. Digital marketing plans use a variety of tools and methods which offer significantly better ROI than traditional marketing does. From social media, SEO, and search engine marketing to pay-per-click advertisements, businesses have many options. Equally useful for B2B businesses that supply products to global customers, e-commerce drastically reduces the cost of full-page ads, banners, hoardings, and so on.
Customer data insights
In a physical setting, it is difficult for a business to track and record customer behavior. In an online shopping experience, however, it can derive multiple benefits simultaneously. It can collect valuable data about spending patterns, potential up-selling opportunities, and emerging trends. By doing so, it can personalize the consumer experience and keep strengthening its brand. Whether the business is selling directly to the end consumer or supplying in a B2B setting, market intelligence and data analysis of this sort lend it a fierce competitive edge.
Retail is undergoing a metamorphosis. Clicking buttons online may never satisfy a customer like an in-person shopping experience at a brick-and-mortar establishment would. However, consumers have come to expect omnichannel retail options-and if businesses want to survive, they must accede to the customer’s wishes. They must find ways of ensuring that e-commerce and brick-and-mortar models can co-exist and boost business performance.
A look at the transition of retail to e-commerce and how businesses are deriving multiple benefits from this shift