Like everyone, I enjoy the convenience that comes with online shopping. Instead of venturing from shop to shop, looking for what I need, I log on and quickly make a purchase. It’s quick, easy and straightforward. There’s no traffic to worry about, no queues, and no packed shopping centres. This is all doable because ecommerce has disrupted traditional business models, paving the way for a new way of shopping.
With the development of technology – something that’s constantly changing, giving ecommerce an even stronger platform – ecommerce has been able to solidify itself as a major disruptor of business models across various industries. Its impact is significant and undeniable. You only have to search for a product online, and you will immediately see how many ecommerce businesses there are. It’s fundamentally changed the way businesses operate. It’s also changed how customers interact with products and services. Now, ecommerce is the norm, and that’s unlikely to change.
Online Shopping is Impacting Traditional Retail Business
A lot of people don’t make the link between online shopping and traditional retail businesses, assuming that they are two very different entities. They are in some ways, but online shopping has actually had a profound impact on brick-and-mortar businesses.
The convenience of online shopping has changed consumer preferences. They now want to shop from the comfort of their homes, knowing how easy it is. This has resulted in decreased foot traffic in physical retail stores, and reduced sales. With more customers preferring to shop online, traditional retail businesses are losing out. This has led to the closure of many in-person stores or, at the very least, a decrease in their profitability.
Online marketplaces, such as Amazon and eBay, have become key players in the ecommerce world. They offer a vast selection of products, competitive pricing and fast delivery, something that a lot of traditional retail businesses struggle to compete with. Now that customers can easily compare prices online, traditional retailers will miss out unless they adjust their prices accordingly.
Ecommerce Has Undeniable Benefits
There are a lot of benefits of ecommerce, most of which are advantageous to customers. For example, online shops collect a lot of customer data. This enables them to personalise marketing and targeted promotions, giving customers a much more bespoke shopping experience. In order to also do this, traditional retailers have to invest in data analytics and technology, which isn’t always possible.
Ecommerce allows businesses to reach customers anywhere in the world. There are no geographical limitations, which makes growing a customer base and reaching new markets a breeze. This isn’t the case for traditional businesses, which are very much limited to local customers and the local area. Online stores are available 24/7. This provides customers with the flexibility to shop at any time that suits them. This also increases sales opportunities, as businesses aren’t limited by time zones or standard shopping hours.
Running an online store tends to be a lot more affordable than a traditional retail business. The online overheads rarely match those needed to maintain a physical retail presence. Escommerce eliminates a lot of expenses associated with renting or owning a physical store, such as utilities and staff. With ecommerce, a lot can be automated.
With so many benefits of ecommerce, it’s understandable why businesses and customers alike are embracing the online world.
The Dark Side of Ecommerce
As is the case with anything, there are some downsides and drawbacks to ecommerce. Everything about ecommerce relies on the exchange of personal and financial information. Security breaches, data theft and hacking attempts can compromise customer data. If this happens, someone’s trust in online shopping can dwindle.
Unlike traditional business models, ecommerce lacks any in-person interaction between customers and sales staff. There are some customers that prefer a more hands-on experiences before making a purchase. This is something that’s hard to replicate online. The closest ecommerce businesses have got so far is using live chat software, allowing customers to ask questions throughout the shopping experience.
There are some businesses that have taken advantage of the growth of ecommerce by selling low quality products. Customers could be hesitant to buy products online due to concerns about the quality or authenticity of products, especially if they have been burned in the past. The inability to physically inspect products before purchase can put some consumers off.
The Potential Implications for Brick-and-Mortar Businesses
As I’m sure you can guess, the growing reliance on ecommerce has the potential to impact brick-and-mortar businesses in a big way. Ask any of the smaller high street shops, they are sure to tell you that sales are being lost to online retailers. Though there’s always going to be a place for high street shops and large shopping malls – after all, there is something enjoyable about browsing a shop, and it’s just not the same experience online – a growing number of people are buying online. Unless brick-and-mortar businesses embrace ecommerce, they run the risk of being left behind.
I won’t go into what brick-and-mortar businesses can do to embrace ecommerce now, but it’s given me a great idea for a future blog.
