Discover the many benefits eCommerce has to offer, whether you’re a large or small business. It’s time to unlock your business’ full potential. Specifically, this article highlights the benefits as well as challenges of running an eCommerce business. Moreover, there are benefits of eCommerce for both your business and your customers. Also, discover the similarities and benefits of operating both an online and traditional “brick and mortar” business.
How eCommerce Works?
eCommerce is all about taking advantage of the internet to purchase and sell products and services. Specifically, it includes activities from online shopping to digital payments and digital marketing. So with eCommerce, customers can shop from the comfort of their own home, anytime, anywhere. Moreover, businesses can also reach a wider audience than ever before. For more detail explanation of what eCommerce is and how it works, see SC Tech Insights’ The Meaning Of eCommerce – Its Where Technology Empowers The Marketplace
“The spread of computers and the internet will put jobs in two categories: people who tell computers what to do, and people who are told by computers what to do.”Marc Andreessen
The Meaning Of eCommerce – Its Where Technology Empowers The Marketplace. Marketers will confuse you in a minute on the meaning of eCommerce. Do not lose hope, the answers to your eCommerce questions are in this article. Click here to find out what eCommerce is, an explanation of various business models (B2B, B2C, etc.), and 9 ways eCommerce will empower your existing or new business.
Also, eCommerce continues to expand and evolve. Now, both small and large businesses are no longer limited to selling just on their web site. Specifically, see below on all the ways businesses can do eCommerce online.
1. eCommerce Platforms and Shopping Cart Software.
Most businesses use some type of shopping cart software to sell online. Also, more and more these shopping cart vendors are now full-featured eCommerce platforms that provide services from web hosting to order fulfillment. Examples of eCommerce platform service providers include: Shopify, Magento, Woocommerce, BigCommerce, and more
2. Online Marketplaces.
These are now large companies where their primary service is to provide an online marketplace for businesses to sell online. Examples of online marketplaces include Amazon, Flipkart, Myntra, Ajio and many more.
3. Social Media.
Also, there are social media companies that in addition provide an online marketplace for businesses to sell products. Examples include Facebook, Instagram and Pinterest.
See eShopBox’s 7 reasons why traditional businesses should switch to ecommerce for more information on different platforms that businesses can use to sell their products as well as the benefits of eCommerce.
The Benefits of eCommerce For Your Customers.
eCommerce benefits customers by providing them with convenience and flexibility. For instance, customers can shop anytime, anywhere, and they can even compare prices of different products quickly and easily. Additionally, customers can easily track their orders and get updates on shipping and delivery times. For specifics, see below for how consumers benefit from eCommerce and shopping online.
“You are cruising along, and then technology changes. You have to adapt.”Marc Andreessen
1. Saves Money.
eCommerce allows customers to save money by eliminating the need to waste gas driving to physical stores to purchase a product. Additionally, shoppers can more easily compare prices from different retailers and find the best deals available. Lastly, prices are usually less online as there is less overhead for retailers and, thus they pass on their savings to customers.
2. More Convenient Shopping Experience.
eCommerce also provides customers with the freedom to shop anytime, anywhere, making it easier to fit shopping into their busy schedules. For instance, conveniences include in-store pickup, online orders, enabling many payment methods, and a wide range of shipping options. Also, customers save time as they can simply search online and find what they need in a matter of minutes.
3. More Product Selection / More Choice.
eCommerce also offers customers more product selection than traditional brick-and-mortar stores. Online businesses can offer more products because online selling is more flexible and costs less. For example, businesses can offer digital products (e-books, audiobooks, software), drop ship (no inventory), white label (re-packaging / branding existing product), private label (use a contracted manufacturer), or provide subscription services (recurring orders like meal prep services, fashion boxes, or health and grooming products). Obviously, this is a win/win situation for both online businesses and customers.
4. More Detail Product Information and Independent Product Reviews.
Finally, eCommerce also provides customers with more detailed product information and independent product reviews. For instance, customers can read detailed descriptions of products before making a purchase, as well as read reviews from other customers who have already purchased the product. Thus, this gives customers more confidence in their purchases and helps them find items that are right for their needs.
“If you’re the village blacksmith and a model T comes along, you better become a mechanic.”Marc Andreessen
Benefits of eCommerce to Your Business.
Also, eCommerce offers numerous benefits to businesses as well. That is why millions of businesses and entrepreneurs are starting up eCommerce businesses. Specifically, it eliminates the need for physical stores and reduces overhead costs. Additionally, businesses can reach a larger audience and gain access to valuable customer data. To list, see below for the 8 ways eCommerce will help your business.
1. Lower Startup Costs.
An eCommerce web site is going to cost a lot less than a traditional “brick and mortar” store. Even with the additional cost of shipping, an eCommerce business has smaller staffing requirements, less building space needs, and lower inventory carrying costs to name a few.
2. Sell Any Time, Anywhere, To Anybody.
eCommerce platforms are fully automated where a business can sell any time, anywhere. Additionally with eCommerce, there are no geographic barriers or closing hours for your business.
3. Unlimited Opportunities To Promote Your Brand.
An eCommerce web site gives your business a way to share your vision, maintain transparency with customers by stating your policies, and earn the trust of your shoppers. Further, you have more opportunities to tell your brand’s story, increase your business reputation, and market strategically.
Also, there are countless ways to promote your brand to include leveraging eCommerce platform resources and using a web developer to create and expand your branding. Lastly you not only have unlimited opportunities to market your business, you also can do this a lot cheaper than a traditional storefront.
4. Streamline Your Business Operations.
There are many eCommerce platforms where you can leverage their resources to manage your inventory, orders, customers, sales channels, plan & implement marketing strategies.
“I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.”Jeff Bezos
5. Strengthen Your Customer Relations.
An eCommerce site enables your customers to see the details of the product or services you are selling. You have more ways to communicate with your customers to include online chat to resolve customer queries and strengthen your relationship with your customers.
6. Both Reach New Prospective Buyers.
Also, eCommerce analytics tools enable you to reach more potential customers. Specifically, you can collect consumer data including their demographics that can be used for targeted marketing. Also, you can better understand your customers and use online marketing tools to reach them. Besides online marketing tools, you will be able to reach a new, growing class on shoppers, the online shopper. More and more consumers are continuously buying good and services online. So if you are not online, you are missing out on an entire class of customers.
7. Scale Quickly.
With a traditional storefront, you are limited with the number of customers you can have in your store at any one time. So if you start getting more customers, your store gets too crowded and you end up turning away customers. With eCommerce, a significant increase in customers is not usually an issue. Worst case, you will need to upgrade your web site and possibly supplement your order fulfillment operations with a third party provider.
8. Gain Visibility Over Your Business.
The internet and the associated software you use is an opportunity for your business to get visibility over your business operations. Specifically, most eCommerce operations are fully automated giving you access to detailed data about every order transaction. This offers opportunities for you to both be proactive when order exceptions occur and to do post-analysis of your operations. Now you have detailed transaction data about how customers interact with your web site, order fulfillment processing, delivery information, and customer service operations.
“Today’s leading real-world retailer, Wal-Mart, uses software to power its logistics and distribution capabilities, which it has used to crush its competition.”Marc Andreessen
eCommerce Business Challenges.
While eCommerce offers numerous benefits, there are also some drawbacks. One of the biggest disadvantages is the potential for fraud and online security threats. For specifics, see below for the disadvantages of eCommerce and shopping online.
1. Longer Lead Times For Customers To Get Their Product.
For eCommerce businesses, customers typically have to wait longer to receive their product due to the time required for shipping and delivery. This can be frustrating for customers, especially if they’re expecting their product to arrive sooner.
2. It Can Be Impersonal.
In a traditional brick and mortar store, customers have the opportunity to get to know the business and the people behind it. With an eCommerce business, it can be difficult to connect with customers in the same way. Businesses must look for creative ways to engage with their customers and build relationships.
3. More Competition.
For an online business, it can be difficult to stand out and attract customers. Businesses must be creative and find ways to differentiate themselves from their competitors. Now on the other hand, you may have more competition, but you also have more potential customers.
“A very large percentage of economic activity is shifting online and it makes sense that there are more services that are going to charge. It also means there are going to be more people willing to pay.”Marc Andreessen
4. Higher Shipping And Delivery Challenges.
Businesses must account for the cost of shipping and delivery, which can be significant. For more details on shipping costs, see SC Tech Insights’ Package Delivery – See How To Stop Surging Costs And Make Your Customers Happy.
5. Online Security Issues.
Online security is a major concern for eCommerce businesses. Businesses must make sure that customers’ personal information is secure, and that payment transactions are safe. Additionally, businesses must ensure that their website is protected from potential hackers. Lastly, you need to be vigilant against fraud. This includes phishing attacks as well as fraudulent purchases.
6. More Dependence On Technology.
eCommerce businesses are dependent on technology for their operations. Businesses must have the necessary infrastructure to handle transactions, process orders, and manage customer data. This can be a challenge for businesses that don’t have the expertise or resources to manage their technology needs.
Similarities With Traditional Businesses And Benefits of eCommerce Hybrid Model.
While eCommerce and traditional businesses are different, they also have many similarities. Both types of businesses require product development, marketing, and customer service. Additionally, both types of businesses can benefit from using a hybrid model, which combines the best of both worlds. A hybrid model offers the convenience of eCommerce, while still providing the personal touch of traditional businesses. To list, below are four similarities between a traditional storefront and a website:
- First impression. Both a website and a storefront give customers their first impression of a brand. This is what helps customers decide to purchase from your business.
- Extensive Market Research. Both types of businesses rely heavily on market research. Without it, they cannot identify their target audience’s needs and desires.
- Marketing Platforms. Ecommerce businesses and physical stores use the same marketing strategies and tools to promote their products. Nowadays, businesses of all kinds use social media platforms and email marketing to attract new customers.
- Incentives. Customers of both physical and online stores appreciate incentives such as promotions, sales, and discounts. Obviously, this is the key to success in both types of businesses.
“In short, software is eating the world.”Marc Andreessen
For more information of the benefits of eCommerce, see Bitbag’s Benefits Of eCommerce, TheBalanceMoney’s Advantages Of eCommerce, CloudTalk’s Benefits Of eCommerce For Customers and Businesses, Builderfly’s What is the Purpose of eCommerce Website?, and Investopedia’s eCommerce.
For more articles from Supply Chain Tech Insights, see our supply chains topics section.
Greetings! As an independent supply chain tech expert with 30+ years of hands-on experience, I take great pleasure in providing actionable insights to logistics leaders. My background includes implementing 100s of innovative solutions using emerging technologies and a data-centric development approach. I have also provided business intelligence (BI) solutions for 1,000s of shippers. For more about me, click here.