How to Build A Successful Ecommerce Business
There are an estimated 12 – 24 million eCommerce sites operating, how do you build a successful Ecommerce Business with new sites launching daily?
E-commerce has proven to be more convenient and more resilient than brick and mortar commerce. Unlike many industries hit by the pandemic, e-commerce customers in the U.S. spent $219 billion more, with sales exceeding 103 percent in 2020.
The industry’s value crossed $5 trillion at the start of 2022, and it’s expected to reach $11 trillion by 2025. With this rapid growth comes increased competition. Reports indicate that the e-commerce world sees 12 to 24 million e-commerce sites springing up daily. This means that e-commerce consumers globally are spoilt for choice. So, your business has to be unique to make a mark on your customers.
Here are a few tips to help you build a successful Ecommerce business.
Think Like A Real Store
The notion that e-commerce platforms have replaced brick-and-mortar ones is not entirely true.
More consumers are going online for their groceries and other shopping needs mainly because of convenience. The skyrocketing e-commerce numbers during the COVID-19 lockdown are enough proof. However, not too much has changed regarding the management side of things.
As an e-commerce entrepreneur, you need to prioritize essential management functions like warehousing. If you store goods in your warehouse without applying best warehousing practices, you may face several challenges, from spoils to late order fulfillment.
Even as you take shopping digital with your platform, it’s crucial to think like you’re running a storefront. Invest in efficient warehouse labeling mechanisms and technologies using radio frequency identification (RFID) or electronic shelf labels. They come with higher cost savings, delivery quality, and customer satisfaction guarantee.
Surveys show that the world has over 2 billion online shoppers. With Amazon and other giants becoming a mainstay in the space, you’ll need more than just another e-commerce website to be successful. For this reason, differentiating your e-commerce business from the competition has become critical for many rising e-commerce founders. There are various tried and tested ways to differentiate a company from its competition. This includes price, brand, audience, etc.
Many founders have overlooked audience differentiation, but it’s crucial to note that shoppers have unique needs. Understanding the threats and opportunities associated with different audience segments can be a great way to gain a foothold over a specific segment.
For instance, you can develop your e-commerce website around persons with disabilities (PWDs) and special needs. PWDs make up 15 percent of the world’s population, and in the United States, they number about 61 million. As an e-commerce business owner, you may miss out on a ton of traffic if your searches and social posts direct PWD customers to an unfriendly website.
Use A.I. To Personalize Your Business
An article on Forbes reveals that about 70 percent of online customers feel frustrated if a company’s platform or communication has nothing to do with them. How do you personalize a platform to its users’ needs, considering that the users could be accessing the platform from multiple locations worldwide?
At a glance, that looks like no easy task. Still, you’ll have an easier run personalizing product displays, user experience, and every part of your e-commerce business if you deploy data-driven technologies like artificial intelligence (A.I.).
Artificial intelligence has gained ground on many e-commerce platforms, with many experts heralding it to be the future of e-commerce. A.I. helps brands to scan huge data volumes, turning them into deep learning algorithms that help to understand shopping patterns like what customers buy and when they buy them. These AI-fuelled predictive algorithms are transforming e-commerce businesses by offering helpful recommendations to shoppers.
For instance, your e-commerce platform can intuitively suggest potholders and oven mitts to customers after they add an oven to their cart. This level of convenience saves users time and the stress of searching for each item. Also, the impact of personalization on revenues can’t be understated. Studies show that product upselling and cross-selling account for 35 percent of Amazon’s overall revenues.
Unsurprisingly, A.I. technologies, from chatbots to product recommendation algorithms, are expected to manage 80 percent of all customer interactions without humans.
Leverage Third Parties And Existing Services
According to numerous sources, about 90 percent of e-commerce startup businesses fail within 120 days. A huge part of this alarming rate can be attributed to inexperienced management.
Starting an e-commerce business can be all fun until you realize the amount of money you burn through wrong decisions and inefficiencies. One common mistake of nascent e-commerce startups is building a fancy website from scratch when they can leverage platforms like Shopify.
Thankfully, the e-commerce industry has become a hotspot for many of these services. You can find at least one service for every business function, from inventory management to customer service. Building platforms can be capital intensive, especially if you’re not already into technology. Outsourcing can also be another way for e-commerce platforms to reduce operational costs and expose their businesses to effective and upscaling decisions.
Make Your Website Mobile-Friendly
According to Statista, more than half of global internet traffic comes from mobile devices. Nearly 83 percent of the global population own at least one smartphone. These numbers are expected to increase as mobile phone technologies and internet proliferation rates increase worldwide.
For this reason, it pays to optimize your e-commerce business for mobile devices if you want it to remain relevant to modern consumers.
Mobile phone proliferation rates keep increasing worldwide. About 83 percent of the world’s population own at least one smartphone. According to Statista, more than half of global internet traffic comes from mobile devices. Therefore, you’ll lose out on a ton of traffic if you don’t optimize your e-commerce website with a mobile-friendly user interface.
Reward Loyal Customers
E-commerce customers will transition from leads to repetitive customers as you grow. As much as you attract new customers, ensure that you have a robust customer retention system. Return customers constitute 11 percent of the total e-commerce customer base, yet they contribute about 22 percent of the entire revenue companies receive from customers.
Customer loyalty programs can be a seamless way to retain loyal customers. Many companies have realized the impact of return customers on profitability. Unsurprisingly, U.S. Brand Activation Marketing Forecast shows that companies spend over $2 billion annually on giveaways.
Generally, the e-commerce economy is experiencing rapid growth, making it attractive for new and established brands. However, building a successful Ecommerce business can be daunting. Beyond these tips, it’s crucial to stay on top of the industry’s trends to help you build a successful e-commerce business.