The Evolution of Ecommerce Series is presented by Litle & Co., the payment processing and intelligence platform that drives more efficient and profitable relationships between consumers and the digital brands they’ve come to love.
The number of consumers making purchases online continues to increase. This year, American online retail sales are projected to reach $224.2 billion. It is the new wave of commerce and, depending on the industry, ecommerce represents either an opportunity for big profit or a death knell for the brick-and-mortar business. The landscape is changing, and businesses must adapt to survive. What follows are five ecommerce trends that illustrate the direction that online shopping is headed, as well as some insight and strategies that will allow businesses and consumers to better navigate the uncertain seas of web-based retail.
1. Unusual or Commoditized Products
The success of Etsy and self-promoted artists who sell their work online can be attributed to the fact that it is difficult to find similar work anywhere else. These products compete on individuality and aesthetics more than price. In fact, attempting to compete on price is generally not recommended, considering the time and skills necessary to create individual works. Far more important is establishing a brand and reputation for quality that will, in turn, drive demand.
At the other end of the spectrum, there are commoditized items, such as consumer electronics, mainstream tools and other equipment. Individuals generally will have less success selling commoditized items online, even though they are some of the most popular online purchases; consumers prefer major retailers like Amazon when buying these items online. However, some individuals or small businesses have found success through affiliations with major retailers. Lifeproof, a line of waterproof and shock-resistant iPhone cases, aligned itself with Best Buy for this very reason, and it was able to penetrate the mainstream audience, whereas before it was simply a niche product.
2. Third-Party Ecommerce Site Providers
To meet the need of creating a functional and attractive ecommerce site, third-party ecommerce providers offer the simplicity of site setup and maintenance on their end to entice businesses. Currently, the two most popular ecommerce site providers are Volusion and Shopify. Volusion does not charge transaction fees on items sold; instead, it offers a simple, tiered monthly plan. Volusion also provides a site coach for its “Gold Level” members and a 14-day free trial.
Shopify charges a transaction fee for all but its “Unlimited” memberships, but allows for sales through Amazon, and offers SSL certification at no additional fee. Shopify is predicting that its merchant clients are on track to double their combined sales this year compared to last year.
It would take an article in itself to fully compare the benefits of these (and other popular ecommerce site providers), but suffice it to say they both offer options for businesses that do not wish to manage the technical aspects of their ecommerce storefront.
3. The “Mom and Pop” Effect
The traditional “mom and pop” stores of yesteryear grow more rare as stiff competition from chain stores increases. However, in the digital realm, the smaller, personalized stores can — and do — have success. Chris Andrasick, CEO of Tacit Knowledge, believes that the mom-and-pop advantage extends beyond customer loyalty, and that there is in fact a logistical advantage, as well. Andrasick says, “Smaller stores aren’t saddled with anachronistic organizational structures that segment a business by channel, such as store, catalog or digital.”
There are even a few companies catering to the moms and pops of the web, giving them the tools to compete with the big guys. SumAll is one such company, providing data analytics to small- to medium-sized online businesses. The metrics from SumAll show online retailers the real-time metrics that are having the biggest impact on their bottom line.
Static marketing is dead, and businesses of any size have to be creative to cut through the clutter. For ecommerce, a new technique is “remarketing” — using multiple touches to generate continued interest in the product. If you’ve ever noticed that ads appearing on pages you visit online are extremely reflective of your interests, you’ve experienced remarketing. “When a potential customer visits a website and then leaves without making a purchase, companies can ‘follow’ them on the Internet,” says Melissa Chelist, owner of Storkgifts, an online children’s store. “Ads and offers will appear on other pages the potential customer is viewing.”
The danger with this type of marketing is the penchant for users to become annoyed due to the “creepy” nature of ads following them around. However, if they were on the fence about an item, the ads can sway the consumer to make the purchase.
Mobile devices are fast becoming the preferred method of accessing the web. According to Think Mobile with Google:
- 81% of smartphone users access the Internet on their mobile devices.
- 59% use the Internet on their phones while waiting.
For this reason, ecommerce sites that are mobile optimized, or that have a streamlined mobile application, will get more sales. Punit Shah of My Trio Rings, an ecommerce jewelry provider, reiterates this point: “Interestingly enough, a lot of our customers have easier access to the Internet from their smartphones than from a computer. Even more intriguing is that the average transaction price from mobile sales is 12% higher than on desktop computer-based sales.”
However, there is a “dark side” for physical stores when it comes to mobile devices. Joshua Milne, of ecommerce solution provider Vendio, says, “The biggest challenge for brick-and-mortar stores is the growth of ‘showrooming.’ For example, Target lost some suppliers because they were not receiving favorable pricing in the stores. Customers would go to Target, check out the price and then use their mobile device to see if they could find cheaper prices online.” However, this is yet another example of the benefit of a strong mobile presence, particularly if a business is able to compete on both price and value.
Ecommerce will continue to advance and evolve, and many of these trends may shift or become obsolete. One thing that remains constant is the need to build a loyal following by competing on value and providing quality customer service. Staying on top of ecommerce trends will give businesses a distinct advantage when it comes to interacting and communicating with customers.
View the full article from Mashable.com - http://mashable.com/2012/07/10/ecommerce-trends/