Ecommerce is act of buying and selling goods and services online.
Pretty simple right?
There’s actually a little bit more to it than that, there’s different types of ecommerce, like B2B (business-to-business) and there’s different platforms and payment processors. We’ll address these in more detail shortly.
But first, why should you care about ecommerce?
The short answer – it’s a massive part of the economy – and it gives businesses reach that they wouldn’t have otherwise.
Just to give you an idea – the global ecommerce market is projected to reach $18.71 trillion dollars by the end of 2024.
Further research by Statista expects a compound annual growth rate of 15% over the next 9 years.
Simply put, these are staggering numbers.
This means if you have a business already, or you’re looking to start a new business, selling online is mandatory. Not doing so is a massive disservice – you’re leaving money on the table – and we don’t want to do that!
Ecommerce: Key points
- Ecommerce levels the paying field allowing anyone to start selling online
- You can use third party platforms such as Amazon, Walmart or Ebay, or you can transact through your own website where you run your own ecommerce store
- Ecommerce means running a business – there are factors you need to keep in mind if you want to be successful
- Building an ecommerce strategy will drastically improve your chances of success
Why Ecommerce Matters
Ecommerce matters because selling online has fundamentally changed the way we, as a society, do business.
Now, instead of your local shop, you can shop from anyway you have an internet connection. This provides enormous convenience and access to a vast selection of products and services that you normally would have to phone about, see in the paper or a magazine, or notice at the store.
Low-cost ecommerce tools available to the masses now give anyone the ability to create an online store. It used to be a barrier to entry and only corporations with large revenue and marketing budgets could afford to build an ecommerce store.
Today, you can bootstrap an ecommerce store, use an ecommerce website builder, or service, utilize a dropshipping strategy where you hold no inventory, and be up-and-running in a couple hours.
But just you can be up-and-running quickly, doesn’t mean you’ll be successful. There’s things you need to consider first – and it’s a good idea to develop a strategy. Keep reading and we’ll show you where to start.
Ecommerce Overview
There are ten main pillars of ecommerce. Let’s review the main categories before we dive in:
- Ecommerce platform
- Web design and user experience (UX)
- Product information and images
- Payment processing
- Shipping and fulfillment
- Customer service
- Marketing and promotion
- Analytics and reporting
- Security
- Legal and regulatory compliance
Ecommerce Platform
This is the software that powers your online store and allows you to manage products, inventory, orders, and payments. Popular platforms are Shopify and WooCommerce.
Check out our Shopify Review where we go in-depth to determine the pros and cons, strengths and weeknesses of the platfrom, and much more.
When choosing an ecommerce platform, make sure you choose one that is reliable, scalable, and easy to use. Other things to consider are your specific business needs, such as the number of products you sell, the features you need, and your budget.
Web design and user experience (UX)
The design and user experience of your online store play a crucial role in converting visitors into customers. Your website should be easy to navigate, visually appealing, and optimized for mobile devices.
You’ll want to use high-quality images and videos to showcase your products and make sure the website loads quickly and is easy to use on all devices.
Product Information and Images
High-quality product information and images are essential for showcasing your products and persuading potential customers to make a purchase. Make sure your product descriptions are accurate, informative, and engaging, and use high-resolution images to showcase your products in their best light.
If possible, consider using videos to demonstrate your products and their features. This can be a video from the manufacturer, or it can be a video done by yourself using the product – it depends on what type of online store you have.
Payment Processing
You need to provide customers with a variety of secure and convenient payment options, such as credit cards, debit cards, PayPal, and digital wallets. Make sure your checkout process is simple and straightforward to minimize cart abandonment.
Shipping and Fulfillment
Customers expect fast and reliable shipping, so it’s important to have a well-defined shipping policy and a reliable fulfillment process in place. Consider offering multiple shipping options and tracking information to keep customers informed about the status of their orders.
Customer Service
Excellent customer service is crucial for building customer loyalty and trust. Make sure you have a dedicated customer service team that is responsive, helpful, and knowledgeable. Offer multiple channels for customers to contact you, such as email, phone, and live chat.
Marketing and Promotion
To attract customers to your online store, you need to implement effective marketing and promotional strategies. This may include:
- Search engine optimization (SEO)
- Pay-per-click (PPC) advertising
- Social media marketing
- Email marketing
- Content marketing
It’s important to track your marketing campaigns to see what’s working and what’s not.
Data Analytics and Personalization
Ecommerce businesses are leveraging data analytics to gain insights into customer behavior, preferences, and trends, enabling them to personalize shopping experiences and improve conversion rates.
Security
Protecting your customers’ personal and financial information is of utmost importance. Make sure your website is secure and that you comply with all relevant data protection regulations. Consider investing in a security certificate (SSL) to encrypt data transmitted between your website and customers’ browsers.
The majority of platforms such as Shopify provide SSL so you don’t need to worry about it – one of the benefits of their service.
Legal and Regulatory Compliance
Depending on your location and the products or services you sell, you may need to comply with certain laws and regulations. Make sure you understand and comply with all applicable laws, such as consumer protection laws, data protection laws, and tax laws.
12 Steps to Creating an Ecommerce Strategy
It’s important to create an ecommerce strategy in order to maximize your chances of success. These are the steps that need to be taken:
- Know your customers: Understand their needs and wants.
- Set goals: What do you want to achieve with your online store?
- Research the market: See what others are doing and what’s working.
- Choose an ecommerce platform: This is the software that will power your online store.
- Create a unique value proposition: What makes your store different and better than the competition?
- Design a user-friendly website: Make it easy for customers to find what they’re looking for.
- Develop a content marketing strategy: Create valuable content that will attract and engage your target audience.
- Implement SEO strategies: Help people find your website when they search online.
- Use social media and email marketing: Connect with customers and promote your products.
- Offer a variety of secure payment options: Make it easy for customers to buy from you.
- Provide excellent customer service: Respond to inquiries quickly and resolve issues promptly.
- Monitor your results and make adjustments: Track your progress and make changes as needed.
The Future of Ecommerce
There are a number of hot topics in ecommerce, but a few really stand out right now: artificial intelligence (AI) and machine learning (ML), voice commerce and augmented Reality (AR) and virtual reality (VR).
Artificial Intelligence (AI) and Machine Learning (ML)
AI and ML are transforming the ecommerce landscape in a number of ways:
- Personalized Shopping Experiences: AI and ML algorithms can analyze customer data to create personalized shopping experiences. For example, they can recommend products based on a customer’s past purchases, browsing history, and demographics.
- Improved Product Recommendations: AI and ML algorithms can also be used to improve product recommendations. By analyzing customer data and product reviews, these algorithms can identify products that are likely to be of interest to a particular customer.
- Enhanced Customer Service: AI-powered chatbots and virtual assistants can provide 24/7 customer service, answering customer questions and resolving issues quickly and efficiently.
Voice Commerce
Voice commerce, which involves making purchases using voice commands, is becoming increasingly popular thanks to the rise of voice assistants like Amazon Echo and Google Home. To capitalize on this trend, ecommerce businesses can:
- Optimize their websites for voice search: This involves using natural language keywords and phrases in product descriptions and other website content.
- Develop voice-activated apps: Businesses can develop voice-activated apps that allow customers to search for products, add items to their shopping carts, and make purchases using voice commands.
- Partner with voice commerce platforms: Ecommerce businesses can also partner with voice commerce platforms like Amazon Alexa and Google Assistant to make their products and services available to voice shoppers.
Augmented Reality (AR) and Virtual Reality (VR)
AR and VR technologies are being used to create immersive shopping experiences that allow customers to virtually try on products or explore products in a 3D environment. This can be especially useful for products that are difficult to visualize, such as furniture or clothing.
- Virtual Try-On: AR technology can be used to allow customers to virtually try on products, such as clothing, shoes, and accessories. This can help customers make more informed purchasing decisions and reduce the likelihood of returns.
- 3D Product Visualization: VR technology can be used to create 3D product visualizations that allow customers to explore products in a realistic and immersive way. This can be especially useful for products that are complex or have multiple features.
FAQs
What are the 3 types of ecommerce?
- B2C: Business-to-Consumer. The sale of goods or services from one business to another.
- B2B: Business-to-Business. The sale of goods or services from a business directly to individual consumers.
- C2C: Consumer-to-Consumer. The sale of goods or services from one consumer to another.
What is an example of ecommerce?
An example of ecommerce is when a consumer buys a pair of shoes from an online retailer such as Amazon.
What is the most common type of ecommerce?
B2C ecommerce accounts for the majority of the global ecommerce market, with a share of around 80-85%. This means that for every $1 spent on ecommerce, $0.80-$0.85 is spent on B2C transactions.
What are the benefits of ecommerce?
If you’re a consumer, you have a wider selection of products, a more convenient (and potentially personalized) shopping experience, and lower prices.
If you’re a business, you have access to more potential customers, reduced costs, ability to scale, and data and analytics to help improve your marketing and customer service efforts.
How profitable is ecommerce?
Generally speaking, you could expect to see 10 – 20% profit. However, the profitability will depend on the industry you’re in and how your business is set-up. For example, if you hold inventory, your costs will be higher than if you dropship and don’t hold any inventory. If you sell a digital product or service, and your overhead is low, you may have profit margins that are dramatically higher.
Is it hard to do ecommerce?
The difficulty of doing ecommerce depends on a number of factors, such as your experience, the niche you choose, and the resources you have available. However, with the right tools and resources, it is possible for anyone to start an ecommerce business.
One of the biggest challenges of ecommerce is getting started. You need to choose a niche, find a supplier, create a website, and set up a payment processing system. This can be a lot of work, especially if you are new to ecommerce.
However, there are a number of resources available to help you get started. For example, there are many ecommerce platforms that make it easy to create an online store. There are also many suppliers that offer dropshipping services, which means that you do not have to carry any inventory.
Once you have overcome the initial challenges of getting started, running an ecommerce business can be relatively easy. However, there are a number of ongoing challenges that you need to be aware of. For example, you need to keep up with the latest ecommerce trends, manage your inventory, and provide excellent customer service.
Conclusion
You should now have a clear picture of what ecommerce is, the primary components that make up ecommerce, the high-level steps to take to create an ecommerce strategy, as well as where ecommerce is going in the future.
Remember, ecommerce is a dynamic arena. Things are always changing – sometimes fast. It’s a good idea to stay on top of the latest trends and be up-to-date so you can maximize your revenue.