Benefits of eCommerce for Small Business Owners
For the majority of small businesses, reaching a large group of people is a daunting challenge. Due to the cost and effort involved to implement marketing strategies and physically expand into foreign territories, the success of many SMEs is prematurely hindered while some are driven out of business during the early stages. Financial constraints and lack of manpower contribute to this problem and also feed off itself in turn creating a vicious cycle of decline.
However, this dilemma is not without a solution. eCommerce for SMEs is a viable business model that could allow businesses to reach a vast audience with a fraction of the cost it typically involves in the case of traditional businesses to reach ¼ of that audience or even less.
eCommerce is generally defined as buying and selling products online and it involves the transfer of money and data to execute these transactions. On an eCommerce site, products and services are usually presented to customers in a wide variety of ways thanks to the limitless scalability offered by eCommerce. Customers have the freedom to deepen their knowledge about the product through research. Since most small eCommerce businesses were pretty nimble and offered quick delivery, consumers around the world took to small eCommerce businesses. Just as eCommerce benefits consumers, it benefits businesses too.
eCommerce came to the fore during the Covid-19 pandemic. As nationwide lockdowns closed down territories, eCommerce offered a convenient way to conduct business on a virtual platform without having to leave one’s home. eCommerce continued to grow even after the pandemic ceased, thanks to its appeal to consumers from all age groups. Now, it is bigger than ever before and it is no exaggeration to say that the future of business is intrinsically connected to eCommerce. This is good news for SMEs provided that eCommerce is an ideal platform for SMEs to conduct business. And here are some of the benefits that SMEs can glean from eCommerce.
Benefits of eCommerce for Small Businesses
eCommerce came to the fore during the lockdown imposed due to the Covid-19 pandemic. Even relatively small or micro-sized businesses that were already engaged in or were quick to embrace eCommerce enjoyed a clear advantage over bigger and more established players that had shied away from eCommerce. As people became increasingly reliant on the businesses in their immediate locality if they had an active eCommerce operation and were extra rewarded. On an eCommerce site, products and services are usually presented to the customers in a wide variety thanks to the limitless scalability offered by eCommerce. Customers have the freedom to deepen their knowledge about the product through research. Since most small eCommerce businesses were pretty nimble and offered quick delivery, consumers around the world took to small eCommerce businesses. Just as eCommerce benefits consumers, it benefits businesses likewise.
Almost every activity done in a physical store is carried out in a virtual space when it comes to eCommerce platforms. This significantly reduces the cost involved in the day-to-day activities of a physical store. For example, this cuts off the wages paid to the managers and the staff. It will also take the rental pressure off the shop owners’ hands while also negating the costs related to renovations, store management and maintenance. In addition, eCommerce allows SMEs to access foreign markets without spending money on building a brick-and-mortar store in a foreign territory. Thanks to eCommerce, SMEs can expand to any country in the world without ever having to set foot in the chosen country to set up the store or to engage with the customers. All it takes is a strategically localised eCommerce platform that can entice customers and retain them.
However, this is not to say that eCommerce does not involve any cost at all. eCommerce does involve certain costs, yet, in comparison to the cost involved in setting up physical stores across countries, the cost related to eCommerce is significantly lesser. For example, the cost incurred by setting up the website or the online shop on an eCommerce platform is much lesser than the cost incurred by the building, management, and maintenance of a physical store located in a foreign country.
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Better marketing for affordable prices
eCommerce offers better and more effective marketing channels for affordable prices and SMEs can utilise them to increase their visibility and revenue. As visual-based channels, eCommerce platforms allow SMEs to present their products and services in an attractive manner. With the help of advertising tools available on many eCommerce platforms, SMEs can drive their sales through digital marketing initiatives. They can also make use of insight tools that allow them to analyse customer behaviour. Insights gained through such tools can be used to design marketing strategies that are better designed and aimed at their potential customers. Customer buying analytics usually offered by eCommerce platforms include insight relating to the number of clicks on a particular product, bounce rate, shopping cart abandonment statistics, products that are frequently purchased together, average time spent shopping, number of pages viewed etc.
Search Engine Traffic
A related and highly significant aspect of eCommerce marketing is Search Engine Traffic. Getting ranked on top of the search engine result pages for the right keywords will simply result in continual sales for any online business, backed, of course, by such factors as price, quality, and after-sales service as well.
This can be considered a great achievement for small businesses since this puts them in competition with the bigger players. But, it has to be noted that this is not that similar to social media traffic where the online store is a topic of conversation that is of immediate interest to people at any given time. The internet has practically democratised commenting on or reviewing a product or service. Sometimes, a business can be one good review away from its breakthrough or one bad review away from getting driven out of business. Therefore, internet traffic is an important factor that can be potentially advantageous for a small eCommerce business as long as they know how to leverage it.
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Yet another benefit eCommerce offers to SMEs is better visibility. The internet is a vast open space not bound by geographical borders. Any startup that operates successfully on the internet is quite likely to gain international recognition due to this reason. Thanks to social media platforms and other online channels, SMEs operating on eCommerce sites can increase their visibility easily. There are instances where eCommerce ventures that started small at a local base ended up going global contributing to many industries and economies in a significant way.
More customer satisfaction, better customer retention
eCommerce entails greater customer satisfaction and subsequently, better customer retention. With eCommerce, customers can shop from the comfort of their homes and there are no time restrictions involved; this means no gas money, saved time, and no waiting in long lines. In addition, they can search for products on eCommerce sites easily and compare prices in no time. This saves them the trouble of going to multiple stores just to compare prices. Offering your customers multiple payment options also contributes to greater customer satisfaction. Another way of providing your customers with an enhanced shopping experience is to offer a simple and convenient checkout process. Usually, a one-page checkout works well with customers and significantly reduces cart abandonment at the last moment. Paired with competitive prices and great customer service, eCommerce will escalate customer satisfaction, thereby promoting greater customer advocacy and retention.
Easy management of customers, inventory and orders
With an eCommerce platform, it is surprisingly easy to manage and store customer data. Most eCommerce platforms have tools and features that help SMEs manage, categorise and store customer data. SMEs can use this data to device marketing plans and drive their product presentation. When it comes to inventory management, eCommerce platforms often indicate the availability and the number of products. And when a customer places an order, all it takes is a few clicks for SMEs to generate order invoices and other documents to manage and dispatch orders. This not only reduces the time and human labour required to complete administrative tasks but also allows SMEs to connect with their customers better and customise their services to entice customers.
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How to Start your eCommerce Journey
Identify what products and services to go with
Prior to beginning your eCommerce journey, you need to identify products and services that work with eCommerce. The trick here is to be strategic. Following the generic route and opting to sell pretty common products like jewellery and books might not be a wise decision for most SMEs; chances are, there are plenty of sellers addressing the needs of that industry. This is not to say that selling certain products online will not get you anywhere. Provided that SMEs pair their products with the right marketing and customer service, they most certainly will. However, as amateur SMEs enter the field, it is wiser to identify the trending products that do sell.
What will give you the edge in identifying products and services that are not commonly available but are in demand? Doing so significantly reduces the risk of failure and helps SMEs deal with competition. The drawback of selling commonly available products is that there are major players out there, meaning that SMEs will have to confront the competition they present. One way of navigating this is identifying specific products that appeal to a specific group of customers.
Identify your Market Locations
The next step is to identify the countries that you want to ship to. Most SMEs opt to ship to a limited number of countries or regions instead to all countries. The rule of thumb here is to conduct thorough research on potential countries. You have to take into consideration the customer base, competition (if any), and the legal landscape of the country, to name only a few. In terms of the customer base, you have to think about what they are receptive to, whether they will respond positively to your product, and what marketing strategies will entice them. When it comes to competition, you need to study your competition so that you can offer your customers something unique, something that they will not get from anywhere else. And with regard to the legal landscape, you need to be aware of import bans of the country, taxes, customers, and 3PL.
Set up your eCommerce platform
Next up is setting up your eCommerce platform. There are a couple of options to choose from here. For example, you can build a website that features your product or service. Or you can go with a third-party eCommerce market platform. One of the most important decisions SMEs have to make here is whether they should localise or a single site. Localising means that you create copies of the same website reflecting the language and culture of the relevant country. Single sitting refers to having a single website with software plugged in to translate the text on the website. Here, SMEs have to rely on automated translators to ensure uninterrupted communication with their customers. With localization, SMEs have to bear the cost of developing a website that resonates with the language and cultural nuances of the target community. However, though it costs a little more, the latter is used by many SMEs entering the eCommerce industry.
Focus on marketing
Now that you have your online store set up, the next most crucial step is to launch marketing strategies. Keep in mind that, in terms of eCommerce, it all comes down to how vigorous your marketing is. So, do your research, make use of all the tools, features, and insights offered to you by eCommerce, and design and implement marketing and promotional strategies that directly engage your target customer base.
Great customer service
One of the must-dos in eCommerce is providing your customers with great customer service. Do not forget that you are selling them something that they cannot touch and feel before the purchase has been made. And the only way to compensate for this lack of physical touch is to offer them great customer service through which they can engage with the seller and clarify any doubts they have. Setting up real-time chat services, offering hotlines and integrating social media such as WhatsApp and Messenger are some of the options you can explore in this regard. Also, don’t forget to use customer analytics to offer customised service to your customers. Always keep in mind that customer advocacy is the most effective marketing tool available for SMEs.
Mobile friendly and user-friendly store
When designing your website, make sure that you build it to be mobile and user-friendly. With the emergence of mobile commerce, the majority of online shoppers are purchasing on their mobiles, abandoning laptops, desktops, and even tablets at times. So, you need to make sure that the way you present your store to your customers is mobile-friendly. And being user-friendly is right up there with being mobile-friendly. No matter how well thought out and aesthetically pleasing your website is, it will not retain customers unless it is user-friendly.
Multiple payment options
Another point in your checklist for eCommerce is offering multiple payment options. While some customers prefer to pay when placing the order, some prefer to go with Cash on Delivery. The currency that you allow your customers to pay with also matters. In addition, customers consider whether they are allowed to pay using master visa cards prior to making the transaction. Another emerging feature relating to payment options in eCommerce is Buy Now, Pay Later (BNPL) which allows customers to pay in instalments. While it is sure to entice customers, keep in mind that there are certain risks involved as well. For example, the risk of default is a serious risk SMEs face when opting for BNPL.
Optimised check-out process
SMEs that have an optimised check-out process retain more customers that do not abandon their carts at the last minute. Having a single-page check-out process that does not make the transaction unnecessarily complicated encourages customers to go through with their transaction.
Focus on SEO
Another key point in eCommerce is having optimised SEO. SEO or Search Engine Optimization involves improving the visibility of your site. You can direct more traffic to your site by using SEO and it aids your site to rank on top of search results.