The pandemic was accompanied by an incremental increase in E-commerce. This was not a short-term blip; I believe we simply jumpstarted the inevitable. Therefore, we need to understand the strengths of E-commerce and maximize both the sales and marketing opportunities.
Let’s look at how E-commerce is changing the way consumers engage:
- E-commerce sales are now estimated to be about 30-35% of retail sales. Amazon has grown from $28 billion in 2010 to almost $600 billion in 2021. Google ads grew from $28 billion in 2010 to $147 billion in 2020.
- Other industries are also dramatically changing and shifting to digital systems. For example, according to Jamie Dimon from Chase, “From loans to payment systems to investing, they have done a great job in developing easy-to-use, intuitive, fast and smart products.”
- Retail is facing extensive challenges. Stores are closing and many companies are shutting down altogether. They are also facing higher expenses, decreased traffic, and require higher margins than E-commerce. Personally, trips to places like Lord and Taylor, Pennies, Sears, and K-Mart are now only memories.
These changes are creating significant opportunities for E-commerce. For example:
- E-commerce can be simpler and more efficient than regular retail. Delivery, security, and customer service have dramatically improved, which makes it a better experience.
- Prices are generally lower as E-commerce doesn’t have the inventory, personnel, logistics, and real estate costs of a brick and mortar store. Additionally, retailers with E-commerce are struggling to balance the costs and prices of two different strategies.
- Marketing for E-commerce can be quicker, more flexible, and less expensive than retail. You can quickly see results, test different programs, and compare different strategies with E-Commerce, and testing and comparisons are in their infancy.
- Both marketing and sales can provide you a customer or potential customer’s name, e-mail, what they bought, what they considered, and other information. These names can provide low-cost marketing information for years.
- Suppliers like Amazon and Google offer significant feedback and suggestions to improve performance and results.
- E-commerce offers a much wider range of products including varieties, colors, competition, and promotions. They have a one or a few distribution centers while retailers have to stock multiple stores.
- There are numerous marketing tools available including memberships, social media, e-mails, paid search, targeting, and follow up.
- There is greater product information available including instructions, directions, ratings, reviews, videos, etc.
- It can save time in terms of not going to a store, dealing with out of stocks and, most importantly, being available 24/7.
- E-commerce offers a special advantage of being able to market to broader audiences including international and, at the same time, customizing messages to the individual.
- A great opportunity for E-commerce is to improve search and information to better interact with consumers and provide a more personal experience. Research has shown that customers love personalized experiences, as it shows the business respects them enough to offer attention. It’s also proven to increase the customer conversion rate.
- E-commerce can be especially beneficial to small retailers who can specialize and cater to local customers and competition.
- E-commerce allows and encourages integration of sales, communication, branding, and marketing.
The potential growth of E-commerce is virtually unlimited. They key is spending the time to understand and take advantage of the opportunities. In particular, we need to better learn how to communicate with, market to, and provide assistance to the individual customer. Increasing efforts in communication, developing better E-commerce materials, and analyzing potential and results need as much attention as specific marketing efforts. Like most worthwhile endeavors, incorporating and/or improving your E-commerce offering may take some work and time to adjust, but the benefits can be a game changer for your business.