Customers have embraced online shopping, spending $861.12 billion online with U.S. retailers in 2020, up 44% from 2019. While the move to selling and shopping online was accelerated by the pandemic, it’s now changed consumer behavior and there’s no going back.
In a survey conducted by Wakefield Research for Square’s Future of Retail report, consumers say they do an average of 43% of their monthly retail purchases online. Online shopping is especially popular among parents and people living in urban areas, who say they now make about half of their purchases online. And retailers are meeting their needs. While nearly three out of four retailers say that converting or expanding their business online was the biggest challenge of the pandemic, it’s a challenge they dominated. A whopping 88% of the 500 retail owners or managers surveyed are now selling their products online.
If you’re looking to capitalize on this trend, read on for details on important aspects of starting an online arm of a retail store, service-based business, or restaurant.
What is eCommerce?
eCommerce refers to the process of buying and selling goods and services online, though in recent years, and even more so during the pandemic, the shopping experience has extended beyond that. For example, retailers that have a physical location can incorporate eCommerce by allowing customers to browse and buy online and pick up in store. Restaurants also saw a boom in online ordering that’s likely to stay. Eighty-eight percent of restaurants say they are considering a switch to digital-only menus. Almost half of restaurant owners or managers who already offer digital menu access using URL or QR codes plan to continue, with 47% of that segment saying they are “very likely” to completely replace physical menus with digital menus.
In addition to allowing retailers and restaurants to better serve existing customers by making shopping and browsing menus easier for them, an online store can allow businesses to find totally new audiences — ones that may never enter their physical location. Independent retailers, small businesses, and large corporations can all benefit from incorporating eCommerce into their business strategy.
Like any digital technology, eCommerce has continued to advance rapidly. Starting in the 1990s, eCommerce began to target a consumer market and online retailers started popping up. Now, almost any business owner or entrepreneur can use an eCommerce platform to open an online store in minutes.
Benefits of selling online
“The advancements we saw in 2020 are only going to continue post-pandemic,” says David Rusenko, Square’s Head of eCommerce. “The changes aren’t a way to simply make it through — they’re permanent and redefining what a meaningful retail experience can look like,” he explains.
Many retailers are experimenting with different ways of running their businesses, whether it’s trying out wholesale or a new product line, or dabbling in another industry entirely. And going online is making those bets more successful. Among retailers who are selling online, an average of 58% of their revenue now comes from online sales. Of retailers surveyed, one in six say all of their revenue comes from online sales, and 36% say it’s very likely that they will be an online-only store in 2021 and beyond.
Here are a few benefits of running an eCommerce store:
- 24/7 shopping: Most eCommerce websites allow shoppers to peruse products and make buying decisions at any time, day or night. This makes shopping easier for customers, and that kind of accessibility is a huge competitive advantage. As a business owner, this also allows you to bring in sales while you’re off doing something else (even while you’re sleeping).
- Meet customers where they are: Having an online store gives you more channels to engage with customers. Integrate with social media and let people shop from their feed, help customers find you in Google searches and make purchases as as soon as they are ready, and send out newsletters to customers with products that they need based on their purchase history.
- Widened scope: A physical store is limited to selling to customers who are in the area. Many eCommerce websites extend businesses to people all over the country or around the world, vastly expanding their customer base and potential revenue. Selling online also offers the ability to broaden or increase inventory — the number of items a business can sell online doesn’t need to be limited in the same way as a physical store, which might be a consideration to increase cash flow.
- Purchase-funnel clarity: Currently, it’s nearly impossible to track how often a single customer comes to a physical store to browse before making a purchasing decision. However, an online store can track a customer’s every click, providing valuable insights into the purchasing process and paving the way for marketing opportunities (such as abandoned cart emails) to nudge customers who may be on the fence about purchasing.
No longer online store vs. brick and mortar
Brick-and-mortar stores shouldn’t be pitted against eCommerce, making businesses feel like they needed to choose one channel over the other. Omnichannel brings these channels together, creating a seamless experience for customers by allowing them to choose how to interact with a retailer, and giving retailers more options for building relationships with customers.
“We’re seeing that online experiences are less of a replacement for in-person interactions, but more of a complement to them,” says Megan Karande, Product Marketing Manager for Square for Retail.
Having both options satisfies the needs of a broader customer base. Most retailers have both customers who would prefer to order everything online and others who prefer to see something in person before they buy. Then there are some customers who don’t have a preference. Even so, they want both options so they can shop according to their own schedule.
As retailers expand to online channels, they have the opportunity to connect the online and offline experience, resulting in increased sales, repeat customers, and the ability to provide customers with the experience they want, where they want it.
How to start an online store
To get started selling online, you’ll need to create an eCommerce website or online ordering page, list products, set up payments, and set up your online business operations (such as order fulfillment, shipping, sales tax, and more). Square Online has everything you need for eCommerce, so you can get up and running quickly and easily.
Take secure payments
You’ll want to accept payments securely online right away, minimizing any friction for the customer. With Square credit card processing, you can accept all major cards and get deposits as fast as the next business day.
Keep inventory in sync
“Invest the time to digitize your business by cataloging your inventory in a digital system (with high-quality photographs of each item),” Rusenko advises. “It’s an upfront investment, but it sets you up to sell on a variety of platforms.” Once you’re set up to go online, you want to make sure that your inventory is in sync across channels so that you don’t accidentally sell items that are out of stock. Square Online works together with Square Point of Sale and Square Dashboard to automatically sync online and in-person orders, items, and inventory. Keep from overselling inventory between multiple locations, and easily track fulfillment and shipping.
Think about your eCommerce needs
Think about what kind of features you need for the stage your business is currently in, and where you want to be in the next couple of years. You can choose from plans that come with increasingly advanced features, like a real-time shipping rate calculator, integrated shipping labels, abandoned cart emails for customers, gifting options, connect a custom domain, analytics and insights, and more. As your business grows and has more needs, there are more robust plans to meet those needs.
Customize your website
You want to create a website that reflects your brand and makes sense for your business, whether you’re a retailer, restaurateur, professional services provider, or are a multi-hyphenate. The online store builder offers flexible designs to create the ideal layout for your business. You can choose colors, fonts, and layout elements that make the most sense for retail, restaurants, and services. The designs have also been optimized for mobile viewing since a lot of online shopping is conducted on consumers’ phones.
Shift strategy to include all sales channels
Having an omnichannel strategy for a business creates a seamless shopping experience for customers, whether that’s on their mobile device or computer, or in person. Creating an online store can also open up omnichannel marketing opportunities, giving you more ways to promote your business across multiple channels, and giving shoppers more ways and choices to find and buy from you. This is the future of commerce. Even if you didn’t start selling online during the pandemic, it isn’t too late to start.
Moving your business online doesn’t have to be all or nothing. “Simply starting somewhere allows you to sell in new ways now that customers’ buying journeys have become less straightforward,” says Karande. “It’s about figuring out what works for your business, and what makes it easier for you to sell in new channels moving forward.”
Ready to take the next step toward growing your eCommerce business? Explore how Square Online can help you launch quickly and start selling today.