Importance of eCommerce for Business
As the Internet becomes entrenched in our daily lives, the adoption of e-commerce continues to grow, and businesses are trying to use it to the fullest. The eCommerce market is continuously expanding and actively developing every year, but in 2020 it broke all the records. One of the responses of COVID that businesses are experiencing now is massive overnight changes to people’s shopping behaviors. This article will pay closer attention to the challenges and benefits of eCommerce for companies and customers.
The digital economy is gaining momentum every month: about 8 billion people live on our planet, and 7 billion devices are connected to the Internet. Experts predict an increase of internet connections to 50 billion devices for 2022. E-commerce now accounts for a significant portion of the global financial market.
Various electronic devices can provide eCommerce; in this regard, it is divided into the following types:
- M-commerce (Mobile Commerce) - commerce using mobile services.
- T-commerce (Television Commerce) - commerce using interactive digital television.
- V-commerce (Voice commerce) - automated transactions on the Internet carried out
through voice portals on the computer or telephone through voice commands. Voice
portals such as brokerage systems can control home devices over the Internet.
- U-commerce (Universal commerce) - the ability to conduct business with an
electronic device at any time.
- D-commerce (dynamic commerce) - dynamic pricing allows sellers to achieve the
highest transparency of transactions and conduct electronic transactions on the most favorable terms.
How quarantine made everyone go online
Due to the coronavirus outbreak, many businesses were forced to move their businesses online. In the current situation, this is the best choice they could make. E-commerce is one of the most reliable sales channels in times of crisis all over the world. With the help of the Internet, it is possible not only to buy food and essential products but also to order all kinds of services like delivering goods, repairs, cleaning, etc. Even the businesses that worked only offline understood the need to diversify risks. The large shopping centers went online and created their marketplaces.
Let’s see how quarantine influenced eCommerce businesses in different countries:
China: In 2020, China regained its leading status in international online trade. In the first quarter of 2020, cross-border sellers’ income grew by 25% year on year. Many businesses managed to avoid large sales losses, as they managed to buy the goods before the Chinese New Year celebrations. In the second quarter, the Chinese e- commerce market began to recover.
The USA and Great Britain: Online retailers from the United States and the United Kingdom reported an overall year increase of 53% in 2020. Since the beginning of the COVID-19 pandemic, they reported significant sales growth, especially for goods that are considered necessary or that customers could use at home.
Korea: The Korean e-commerce industry in 2020 increased sales by 45% compared to the last year. However, due to the pandemic’s impact, Korean sellers were forced to fight strict border controls throughout Southeast Asia. It has led to a 50% decrease in sales in the region.
Europe: The number of online sellers, compared to last year, increased in Spain by 30%, in France - by 13%, in Italy - by 85%. Many experts claim that the future of European e-commerce after COVID-19 will recover and prosper.
India: In recent years, international online commerce in India has grown steadily. However, due to the influence of coronavirus, the second quarter of the year is less optimistic. The isolation of 1.3 billion people and severe disruptions in supply chains have led to the termination of Amazon and Flipkart services in India.
The benefits of eCommerce for businesses
The opportunity of selling online resulted in more businesses earning more and growing successfully. Like any other business strategy, eCommerce opens up enormous possibilities for businesses. Among the main ones are:
- A business can expand its marketplace to national and international markets with minimal investment. A company can easily find more customers, better suppliers, and suitable business partners around the world;
- It helps business reduce the cost of creating a process, distributing, receiving, and managing paper-based information by digitalization;
- It improves a company's image;
- It helps a business improve customer experience;
- It simplifies business processes and makes them faster and more efficient;
- It reduces paperwork;
- It increases the productivity of the company;
- Advanced analytics integration into other business programs (ERP, PIM,
Procurement, CRM, etc.) provides a holistic view of all business processes;
- eCommerce marketplaces are visual channels, allowing sellers to show off their
- It allows sellers to compare the products using tools online;
- eCommerce marketplaces provide multiple payment modes that can include cash
on delivery, a card on delivery, UPI (Unified Payments Interface), net banking, as well as pay-later credit facility;
Challenges of eCommerce for businesses
- eCommerce is highly competitive;
- Customers can’t try before they buy;
- Sometimes businesses can’t cope with the fast response to customer inquiries;
- Companies need to ship their products on their own;
- Physical retails sill more popular than online;
- Low level of security and protection against fraud (along with the growth of eCommerce markets, the number of cybercriminals grows too);
- There is a certain distrust of eCommerce among customers that are sometimes not accustomed to new methods and technologies. Also, it can appear due to the lack of clear or truthful description of the goods or services characteristics;
Perspectives of technologies for eCommerce
Technology helps businesses to learn more about customers and personalize their marketing messages. The AI-based algorithms study the profiles of existing and potential customers on LinkedIn and collect many data for future advertising campaigns (email and pop-up messages, advertising, and SMS).
Chatbots and bots-helpers are also actively used in various business areas: with their help, customers can make online purchases, book tickets, get advice, personalized offers, etc. They are great for sales and service: chatbots automate contact centers and operators and earn customers’ commitment and loyalty.
Here are just a few examples of popular bots:
eBay and Nike chatbots can recognize keywords (product type, color, material, price, etc.) from the request and use these tags to select the ideal option for the customer;
Sephora and Kik bots are virtual consultants for a cosmetics store: they conduct surveys among customers, analyze their preferences, give advice on makeup, and more;
Aerie and H&M consulting bots help choose customers’ clothes, offer them photos of goods or ready-made looks, analyze their preferences, and offer them products in a similar style.
Visual search is another example of technology trends that continues to grow in the world of commerce. Visual search can be implemented in the chatbot for the additional convenience of the user. Modern smartphones already have built-in image recognition algorithms, which gives many opportunities as they can be used in business.
According to surveys, 40% of customers would like to see the product before buying, and 35% of companies admitted that their customers do not want to come into contact with real consultants.
Augmented (AR) and Virtual Reality (VR) are great options for businesses if they’re going to showcase the product to customers. For example, Ikea and Amazon use AR to help customers estimate whether they will fit into their interior and make a purchase decision.
What UppLabs can offer for eCommerce businesses
Our contribution as an e-commerce development and consulting agency is aimed to bring influential business launches with the use of the right technology stack. UppLabs is also experienced in giving the business a new start by re-platforming profitably or growing into an omnichannel venture.
We are proficient in such e-commerce software platforms as:
- BigCommerce Platform
- Shopify eCommerce platform
- Volusion eCommerce platform
- 3dcart eCommerce Platform
- BigCartel eCommerce Platform