Just in the past year, we have continued to see customers embrace online shopping methods, and retail e-commerce sales data supports that theory. UK online sales reached £133bn in 2016 reflecting a 16% year-on-year increase, confirming that online shopping is here to stay.
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What is e-commerce?
E-commerce refers to the process of buying and selling goods and services online. And it’s important because it allows retailers to both better serve existing customers (by making shopping easier for them) and find totally new audiences (ones that may not ever enter their physical location).
Like any digital technology, 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. E-commerce grew as the internet became more accessible and expanded. Starting in the 1990s, e-commerce began to target a consumer market and retailers like Amazon and eBay started popping up. Now, almost any business owner can create an online store in minutes or sell 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.
Business to consumer (B2C): B2C e-commerce is when businesses sell products or services to consumers 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.
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
With almost one in ten people now getting daily deliveries to their place of work, online shopping shows no sign of losing customers. Offering an anywhere, anytime solution to their shopping needs, e-commerce embodies the convenience and immediate answer to demand the modern consumer has come to expect of retailers. 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 peruse your products and make buying decisions at any time, day or night. This makes shopping easier for your customers and that kind of accessibility is a huge competitive advantage.
Widened scope: With a physical shop, you are limited to selling to consumers who are in the area. E-commerce websites allow you to open your doors to people all over the world, which vastly expands your customer base and can boost your revenue.
Purchase-funnel clarity: You’re not able to track how often a single consumer comes to your shop and tests your product before making the purchasing decision. When you open a store online, however, you’re able to track your customer’s every click, which can give you a better representation of the purchasing process.
Online store vs. brick and mortar
Many of Britain’s high street giants have proven to not be immune to the ebb and flow of consumer habits, with brick-and-mortar shops being pitted against e-commerce alternatives, making businesses feel like they need to choose one medium over the other. But even in these uncertain times, it is the brands who have struck the perfect balance who are enjoying a retail boom thanks to their omnichannel experiences. Offer your customer the best of both worlds by continuing to manage your retail location while opening an online store.
Starting an online store while continuing to maintain 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. And then 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 create repeat customers (and more revenue in the long run).
How to start an online store
Starting an online store might seem overwhelming, but it’s really quite simple these days. With e-commerce platforms that provide store templates, it takes very little time to get a store up and running. But there are other things to think about besides designing the store, so when you decide to invest in e-commerce, here are three things you should think about to be successful:
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 saved in one place. You have a better view into how your business is performing and can 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 that’s on their mobile device, computer or at your brick-and-mortar shop. Marketing for your online and offline shops should also take the multi-channel approach – make sure you’re visible on Instagram, Facebook and Twitter.