We all know what e-commerce is, as consumers, because 96% of us – as Americans – have made an online purchase, and 80% of us have done that in the last year. There are millions of stores to choose from, and we can find whatever product or service we want, with the help of Google.
There are currently 3.7 billion people accessing the internet now, worldwide, growing 934% between 2000 and 2017. All of these users are potential consumers for internet goods and services.
What does this mean to the small business? Just this: Where there are consumers, there is opportunity. In fact, it is now possible for the smallest of businesses to offer their goods and services to these billions of consumers, no matter where they are, and to be successful doing it. It is truly the globalization of commerce, where a local, mom-and-pop store selling an innovative product has as much chance of selling to a far-away customer as a larger retailer.
The E-Commerce Economy: Amazing Opportunity
When we talk about e-commerce, we’re not just talking about putting up a website and making sure your phone number is correct. It’s more than that; it’s the ability to actually sell online, with customers being able to place orders in your online store, and to receive goods and services.
What does it take to take advantage of the opportunity? Less than you’d think, in some ways.
- An e-commerce site. You can open your own store, using the very popular Shopify platform, for as little as $29 a month. You can use one of their many templates to create the site, which have all the details worked out for you, and upload your product or service list via an Excel spreadsheet.
- Make sure you’re found. “Being found” is half of the holy grail of e-commerce. They have to find you when they go searching for you.
- “Being found” starts with you understanding and defining where you fit in the search engine world. What do you want to be found for? What phrases do people use to find you? Which phrases are more specific, but less competitive, and therefore easier to rank for?
- Advertising online is another way to be found – you can experiment for as little as $20 a day, and you can use tools like SpyFu to see exactly what phrases and ads are working for your competition.
- Social media can play an enormous role in you being found, if your potential customers are using social media to interact with each other. You need to treat it as a daily, ongoing conversation with your potential buyers, in order for it to pay off for you.
- Create content that not only sells, but informs. People certainly do buy products and services on impulse, but they also look for solutions to problems and research possible solutions long before they make an actual purchase. In this age, when any question can be answered online, the companies that answer those questions – whether a purchase is the result or not – are more likely to make the sale when the customer decides to buy.
- Make it easy for them to buy from you. “Conversion” is the other half of the holy grail – once they come to your e-commerce site, your products have to be well-organized and categorized; thoroughly described; and the actual buying process has to be smooth as silk. That’s one of the reasons to use a popular e-commerce platform like Shopify, which incorporates so many of the “standard” shopping conventions that customers are used to.
- Understand the supply chain and master logistics. E-commerce allows people to buy online, any time of day or night, from anywhere. They expect fast shipping and reasonable shipping rates (or free shipping). These needs are increasingly being met by shipping and distribution/wholesale companies who can hold inventory and ship it faster – and cost-effectively – to nearby customers. Of course, any business can take advantage of this convenience, making it less of a competitive advantage; thanks to these companies and the dominance of fast-shipping Amazon, customers have come to expect this standard of service.
The E-Commerce Economy: A Wealth of Data and Better Decisions
One of the benefits of joining the e-commerce economy is that it gives you a window into your buying audience, in a way that just isn’t possible with normal brick-and-mortar sales. Customers leave trails which are analyzed and made sense of by many companies, including Google. Google is your friend in the e-commerce economy; the data Google makes available via Google Trends, Google Analytics, and Google Search Console boggles the mind, but also serves as an excellent decision-making tool. Shopify also provides statistics – such as the product that is being viewed the most (time to offer it on sale!) and customers who abandoned their shopping carts (who may even appreciate a gentle reminder to revisit your site).
Sellers have never had this much data, and this much opportunity.
Here are some other stats that help define the e-commerce economy, and its opportunity:
- 96% of Americans have made an online purchase in their lifetime.
- 95% of Americans shop online at least yearly.
- 80% of Americans shop online at least monthly.
- 30% of Americans shop online at least weekly.
- 5% of Americans shop online daily.
- 51% of Americans prefer to shop online
- Ecommerce is growing 23% year-over-year, yet 46% of American small businesses do not have a website
- 67% of Millennials and 56% of Gen Xers prefer to shop on online rather than in-store.
- Millennials and Gen Xers spend nearly 50% as much time shopping online each week (six hours) than their older counterparts (four hours).
- Nearly half (49%) of parents stated that they cannot live without online shopping.
- Men reported spending 28% more online than women during the past year.
- Men and women both report spending 5 hours per week shopping online.
- Americans spend 64% of their shopping budget in-store, and 36% online
E-commerce and Mobile: A whole new world
E-commerce has been with us for some time, but now everyone has a smartphone, and many people are using those phones to shop. Per Google:
- 82% consult their phones on purchase they’re about to make in a store
- 90% say they’ve used their phone to make progress toward a long-term goal or multi-step process while out and about
- Mobile search will generate 73 billion calls in 2018, up from 30 billion in 2013
E-Commerce Economy: Where the Money Is
Back in the 1800’s, they built railroads across the U.S., to connect cities and towns. The towns that aggressively embraced the concept of the railroads thrived; the others became ghost towns.
The ghost town syndrome is, predictably, happening again; brick-and-mortar stores are closing as customers increasingly shop online. In 2017, J.C. Penney will be closing 138 stores; Radio Shack will be closing 552 stores; Payless shoes is shuttering 400 to 500 stores; and Office Depot is closing 100 stores.
According to Customer Think:
As the physical store continues to migrate online, consumers are accessing the shopping experience via mobile devices. Even when consumers are actually shopping in a brick-and-mortar store, they are increasingly willing to turn to their smartphones to compare prices, get further product information, and find out if a competing store nearby has a better offer. In addition, not to be satisfied with any sort of dominant status quo, online retailers continue to increase the pressure on brick-and-mortar retail with such attractive offers as free shipping or same-day/next-day delivery.
The marketplace – the place where money is paid for goods and services – has moved from the mall to the palms of billions of customers. The companies that understand and meet those customers – and sell the way those customers now want to buy – will be the winners in the e-commerce economy.