As we ride the technology wave, the eCommerce scene is always on the move! We are all unreservedly loving the convenience of online shopping, and the possibilities for creating business seem limitless. But, as with anything, there are likely to be a few hurdles to clear along the way. In this article, we're going to dive into the nitty-gritty of running a successful eCommerce business.
From ingenious eCommerce examples that have made a mark, to innovative eCommerce ideas that might just spark your next big venture - we'll navigate you to the top eCommerce platforms and solutions that can push your business into the ever-changing digital space.
İlayda Birol
Introduction to eCommerce
E-commerce has come a long way in the realm of the digital economy, and the UK is one of the biggest hubs! eCommerce has become an unstoppable force, transforming the way we shop, sell, and experience businesses.
If we explain this in simple terms - eCommerce enables transactions to occur electronically, allowing consumers and businesses to engage in commercial activities without the need for physical interactions.
With eCommerce, customers can browse and purchase products without leaving their homes, and businesses can expand their market presence beyond geographical boundaries. In talking about eCommerce, t's important to note that various models come into the picture, including:
1) Business-to-Customer (B2C): Where businesses interact and sell their products and services directly to customers.
Example: A retail store.
2) Business-to-Business (B2B): In B2B eCommerce, businesses conduct transactions with other businesses.
Example: Purchase of raw materials, components, or services required for their operations.
3) Consumer-to-Consumer (C2C): C2C eCommerce facilitates transactions between individual consumers.
Example: Online marketplaces and platforms that enable people to buy and sell second-hand items.
4) Consumer-to-Business (C2B): In C2B eCommerce, consumers offer products or services to businesses.
Example: Freelancing platforms where individuals provide services to companies or brands.
5) Business-to-Government (B2G): These are the transactions between businesses and government entities.
Example: Government procurement processes and digital services provided by the government.
Gouri Choubey
Future of eCommerce in the UK and Globally
The United Kingdom stands proudly as the world's fourth-largest eCommerce market, poised to achieve an impressive revenue of US$141,115.2 million by the year 2023, surpassing Germany in its prominence.
Looking ahead, this thriving digital landscape is projected to experience a compound annual growth rate of 7.8%, reaching a remarkable market volume of US$190,274.5 million by 2027.
The UK eCommerce market is projected to experience a significant 8.3% growth in 2023, contributing to the overall global growth rate of 9.6% for the same year. Just like in the United Kingdom, eCommerce sales worldwide are expected to continue their upward trend in the coming years.
This gives a lot of scope to aspiring eCommerce business owners to get their foot in the door of the industry.
İlayda Birol
Great Opportunities in eCommerce
If you are planning to take on the eCommerce business adventure, these opportunities are sure to push your growth to new heights.
Scope of going digital
E-commerce has experienced amazing growth lately, but it still covers only 11.9% of total retail sales. However, 20.8% of retail purchases are expected in 2023, where e-commerce sales are supposed to increase as well. This means that your customers are shifting online, so you can sell more and earn more!
The global eCommerce market is expected to total $6.3 trillion in 2023.
This is a whopping number! One great advantage of an eCommerce business is that you have an online platform to sell your products and services, regardless of where you are located. As long as a business has a running and user-friendly website, customers can locate you from the other side of the world in a jiffy. This opportunity gives you a chance to expand your horizon and explore international markets - without having to travel to a new country.
eCommerce Automation
As the enchanting world of technology keeps evolving, you can plan on tossing out manual order fulfilment in the warehouse. E-commerce has given rise to more online merchants, eliminating the need for middlemen, physical stores or big warehouse space. All they need to do is maintain a website that's up-to-date with the latest technology.
Businesses can explore innovative solutions like augmented reality for virtual try-ons or chatbots for enhanced customer support, enhancing the overall shopping experience.
Niche Markets
Niche markets are the delightful gems waiting to be discovered – a place where you can don your creativity cap and cater to the most unusual and specialised needs. From vegan cupcakes enhanced with nootropics to sportswear for pets, niche markets offer endless opportunities for innovation.
Your niche customers aren't just regular buyers, but you can always convert them into loyal customers. By focusing on specific products or services, businesses can attract passionate and dedicated customers, to create a loyal customer base.
Data-driven results
Your eCommerce platform brings a treasure trove of valuable analytics and reporting tools, revealing a wealth of information just waiting to be explored.
With these tools at your fingertips, you become an expert in understanding customer behaviour, diving into the depths of their preferences, shopping habits, and desires. Armed with this knowledge, you can craft personalised experiences and stay ahead of the competition.
Common Challenges in eCommerce & Strategies to Overcome Challenges
As we venture into the e-commerce land, some hurdles test the spirit of even the bravest digital entrepreneurs. So what are these challenges and how are they solved? Let's explore!
#1: Finding a Unique Selling Proposition
Amidst this bustling marketplace, standing out becomes pretty tough.
Your USP holds the key to setting your business apart from all others. However, with so many offerings and competitors, it becomes a challenge to find a truly unique angle that sets your business apart.
Experts say that defining a compelling USP goes beyond mere marketing buzzwords; it should build a bond with customers. Yet, many businesses struggle to define this unique essence, causing their identities to blur with all the others in this vast digital realm.
Additionally, the market needs are ever-changing - and so, keeping up with the shifting desires and needs of customers requires constant vigilance and adaptability.
Solution?
To tackle the challenge of finding a unique selling proposition (USP), businesses must undertake a journey of self-discovery and customer understanding.
- Conducting in-depth market research and customer surveys can unveil hidden gems that set their brand apart.
- Emphasising the core values and mission that resonate with their target audience can form the foundation of a compelling USP.
- Regularly monitoring market trends and customer feedback helps in staying relevant and adapting to evolving needs.
#2: Economic challenges
Fluctuating market conditions and unexpected events can mean a rocky road ahead.
Economic challenges can arise from various sources, such as changes in
- consumer spending patterns
- shifts in market trends
- or global economic downturns.
For eCommerce businesses, which often rely heavily on digital transactions and customer engagement, external economic factors can significantly impact their revenue and growth prospects.
Solution?
Amidst economic challenges, eCommerce businesses need to be tough and adaptable. They can navigate these rough waters by diversifying their products and exploring fresh markets, creating a safety net during uncertain times.
- Build a devoted customer base through top-notch customer service and personalised experiences that can shield against swings in consumer spending.
- Additionally, keep a keen eye on market trends and economic indicators to make proactive strategy tweaks.
#3: Currency Exchange in International Business
Receiving payments from customers abroad can be like a puzzle, as you must carefully understand the intricacies of currency exchange. Fluctuating rates, transaction costs, and potential profit fluctuations are often considered a challenge by e-commerce business owners.
The exchange rate between their currency and your home currency seems to have a mind of its own, which keeps fluctuating. And of course, you can't convert every international payment into your local currency - as conversion costs and transaction fees can be quite expensive. These pesky rates can affect your profits.
These unnecessary costs, may flutter around and influence your overall profits, and may often end up in frustration.
Solution?
Look to payment service providers like wamo (that’s us!). Alternative financial and payments service platforms offer competitive exchange rates and transparent fee structures, empowering businesses to navigate the currency maze more easily and affordably.
For example, if you are based in the UK and running your business in the USA, Australia or any other country that deals with a different currency than yours, then these platforms can make life much easier. In the UK, the currency is the British Pound (GBP), but in the USA, it's the US Dollar (USD), and in Australia, it's the Australian Dollar (AUD).
Each currency has its own value and fluctuates rapidly. Converting every customer payment into your local currency becomes very complex. Plus, conversion costs can take up a big chunk of profits. By collaborating with these platforms you can integrate currency exchange into their eCommerce website.
This way -your customer simply buys your products and services in their currency, while you will be receiving payments in your local currencies automatically.
This also enhances customer experience, streamlines payments, and reduces currency exchange complexities.
#4: Cart Abandonment
In the realm of eCommerce, "cart abandonment" looms large. When a customer adds items to their virtual shopping cart but leaves the website without completing the purchase, it creates a lost opportunity for the business. Here are some common frustrations that e-commerce businesses face:
- It directly results in lost sales
- Identifying the specific pain points or obstacles that deter customers from completing their purchases can be complex, requiring careful analysis and constant optimization.
- Better and faster checkout process offered by competitors
Solution?
Begin by conducting a thorough audit of your checkout flow. Now, you can also hire experts to do the same. But do bear in mind - avoid relying on friends or family for this task; seek the assistance of unbiased testers who possess no prior knowledge of your business.
As these testers "order" something from your site, ask them to share their feedback on the process.
- Was the checkout journey smooth and seamless?
- Did it spark joy?
- Was the checkout process a trustworthy experience for the tester?
- Did the visuals align seamlessly with the rest of your website?
If not, try this!
Reduce the amount of information they need to put into the website, scale back the size of forms, or trim the number of steps needed to check out.
Call upon live chat tools or automated chatbots to appear helpful, guiding users past any troublesome friction points.
If it still does not work, craft an intelligent email marketing approach to reclaim lost customers. Target them with attractive offers and discounts on the very items they once contemplated purchasing, pushing them back into your realm of products.
İlayda Birol
#5: Social Challenges
In the ever-changing landscape of eCommerce, social challenges have emerged like intriguing riddles to be solved. One of the most potent potions troubling customers is the concern over privacy and the safeguarding of personal information.
The first thing any business should consider is that - consumers take their personal information very seriously.
Additionally, there are certain cultural differences which come into play as well. Unlike traditional merchants who easily tailored their language and marketing charms to resonate with their audience, online sellers must now balance these cultural nuances as well - which can be quite challenging if a business is running in different markets.
Solution?
eCommerce businesses should prioritise transparency and data protection.
- One such thing is the implementation of robust privacy policies and clearly communicating how customer data is used to instil confidence in shoppers.
- Adapting marketing messages and cultural nuances to resonate with each target audience builds strong connections and promotes a sense of inclusivity.
- Invest in multilingual support and customer service. It bridges language barriers and strengthens relationships with international customers.
- Embrace your social responsibility initiatives and align with causes that matter to customers - this can enhance the brand's appeal and create a sense of community.
#6: Voice search
With markets blooming and thriving, experts predict a surge in demand for voice-driven user experiences. No surprise there!
This tool is proven quite handy for customers, here's why: voice search queries occur while people are on the move, walking or driving, or when they are exploring new places and businesses.
However, for new business owners, understanding user intent becomes tough, as voice queries often adopt a more conversational and casual tone. This can lead to misinterpretations and disturb the results.
Solution?
The search engine has advanced dramatically! They strive to comprehend the context of a user's search, making the interaction feel more human and more authentic.
These search engine algorithms use concept matches and synonyms to enhance the user experience.
To enjoy the full potential of this technology, vary your terminology by including more synonyms for keywords and phrases.
By doing so, one can cover all ways a question may be asked, making your presence felt amidst the diverse realm of voice search queries.
In a nutshell, the eCommerce world offers its fair share of challenges and exciting opportunities for entrepreneurs and businesses of all kinds. To stay ahead in this ever-changing landscape, it's crucial to keep learning, embrace innovation, and prioritise customer value. By being proactive in addressing challenges and making the most of opportunities, businesses can flourish in the dynamic digital space of eCommerce!
