Research tells us that the Australian e-commerce market will be valued at over $32.5 billion by the end of 2017. This is a big indication that shopping online is a customer habit that’s here to stay. Embracing this opportunity will enable small business owner to capitalise on the chance to invest in e-commerce solutions and start their own online store.
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What is e-commerce?
E-commerce refers to the process of buying and selling goods or services online, allowing retailers to both better serve existing customers (by making it easier for them to shop with your business) and find new customers (even those who may have never entered your physical business location).
E-commerce has evolved over the years and continues to advance rapidly. Electronic commerce was first introduced in the 1960s with the development of electronic data interchange (EDI), which allowed mail and fax to be delivered electronically. As the internet became more accessible around the world, e-commerce grew and expanded. In the 1990’s, e-commerce began to target a consumer market and retailers like eBay and Amazon began to establish their presence. Nowadays, businesses of all sizes can create and run their own online store in minutes, or even sell their goods through sites like Amazon, Etsy, or even Facebook.
Internet transactions are usually divided into three different categories:
- Business to business (B2B): B2B e-commerce refers to the sale of products or services between two businesses through the internet. Examples of B2B e-commerce businesses include manufacturers, traders, and retailers. B2B customers tend to be more strategic since they are purchasing products with purpose, so your strategy to sell should reflect that. They may also be more concerned with the wholesale price and product margin, as well as manufacturer warranties.
- Business to consumer (B2C): B2C e-commerce is when businesses sell products or services directly to the end consumer online. B2C customers tend to buy with their heart, instead of their head, so you should take emotion into account (or capitalise on it) in your strategy. Strong product imagery, descriptive copy and consumer protections (free delivery or returns, for example) can have a positive impact on your sales, but also a potential impact on your profitability.
- Consumer to consumer (C2C): C2C e-commerce facilitates the transaction of products between customers. It’s a newer model that has vastly expanded in recent years with companies like eBay and other auction sites.
Benefits of e-commerce
E-commerce has expanded rapidly in Australia, and with 85% of the population having internet access it’s expected that this trend will continue to grow. According to Roy Morgan, 4 out of 10 people buy products from e-commerce stores at least once a month.
Not convinced you should start an online store? Here are a few benefits of running an e-commerce store:
- 24/7 shopping: E-commerce websites allow shoppers to browse your products and make buying decisions whenever it’s most convenient for them, whether that is day or night. Accessibility is a huge competitive advantage.
- Widened scope: With a physical store, you are limited to selling to consumers who are close to your business geographically. E-commerce websites enable you to open your doors to people all over the world, which expands your addressable market size and can boost your revenue.
- Purchase-funnel clarity: You’re not able to track how often a single consumer comes to your store and tests your product before making the purchasing decision. In an online environment however, you’re able to track your customer’s every click, which can give you a better representation of the purchasing process — and make optimisations that may encourage more customers to purchase.
Online store vs. brick and mortar store
You may read an ongoing narrative in mainstream media which pits brick-and-mortar stores against e-commerce — making you feel like you need to choose one medium over the other. Why not bring them together and create a seamless omnichannel experience for your customer.
Starting an online store while continuing to manage your brick-and mortar shop helps you satisfy the needs of a broader customer base. Most retailers have customers who would prefer to order everything online and others who have to see something in person before they buy. On the other hand, there are other customers who don’t have a preference but want both options so they can shop according to their own schedule. By providing multiple options, you are more likely to satisfy more customers (and create more repeat business in the long run).
How to start an online store
Starting an online store is simpler than ever, particularly with a range of website builders and e-commerce platforms that provide store templates. But there are other things to think about besides designing your online store, so when you decide to invest in e-commerce, here are three things you should consider that will contribute to your success:
- Find an e-commerce platform that can support your current payment processing so you can accept online payments through the same system. By using one payments system for your brick-and-mortar and your online store, all your business and customer data is stored securely in one place. You’ll also have a full overview on how your business is reporting in every location, and will be able to quickly pull detailed reports.
Assess the security of your payments system. Many business owners are rightly concerned with the security of online payments. With news circulating about data breaches and system compromises, customers are wary about making purchases online from websites they haven’t used before. And you want to make sure that their data is safe.
To do this, make sure your payments processor facilitates your PCI compliance and understands the entire scope of payment security. Suspicious activity should be followed up on immediately
- Shift your business strategy to include all your sales channels. By creating an omnichannel strategy for your business, you can create a seamless shopping experience for your customer — whether they’re shopping with you from their smartphone, tablet, computer, or at your brick-and-mortar store. Be sure your plan entails omnichannel marketing as a way to advertise your business across every platform.
Looking to take your business online? Square has a range of website building partners and APIs, so you can build your online store and accept payments online easily — no matter what your online needs are.