future of ecommerce
The global demand for mobile commerce solutions has increased significantly due to the advancements in technology, such as artificial intelligence (AI) and machine learning (ML). Businesses are looking for a solution that can help them grow their business, build brand awareness and ultimately make more sales. It might be challenging, but it is worth the effort. In this article, you will learn how ecommerce helps small businesses to reach millions of clients around the globe. Before we get started, let us first look at what ecommerce is and why companies need ecommerce solutions.
What Is Ecommerce?
Ecommerce means purchasing and selling products or services over the internet. The concept is simple: buyers communicate with sellers through an online platform, which allows them to order products or services from anywhere. Consumers can shop on the web using any device like a tablet, smartphone or even a computer. At times, they are able to purchase products and services with cash. However, in most cases, consumers buy items directly from manufacturers. Some stores sell their goods through third-party websites. They are commonly known as retailers.
When shopping online, consumers can compare prices, product features and availability. While browsing online, customers can also browse different products and find one they like. Thus, they can try out several items and decide which one they want. After receiving the selection, these customers shop online through an interface provided by the retailer. Usually, the system will ask them to enter their billing information. This way, the store owner will receive the payment from the buyer’s account, without having to go into personal details or sign it. Therefore, consumers can easily access their inventory levels and view details, including delivery date and shipping address. When making payments, shoppers can pay through credit cards, PayPal, and net banking. Once they arrive at their destination, these customers can start taking delivery orders or pick up the item. Since online transactions are instant, customers can wait for their order to be delivered before ordering again. Although some retailers offer physical location support to allow customers to collect the items when they arrive home, it doesn’t apply to all businesses. Moreover, some retailers provide customer service only for orders made through the website. It may not be convenient to meet your needs in person. To reduce frustration, many retailers offer free returns and exchanges. For instance, Walmart offers an option for its customers who do not return an item to exchange it for another. Customers can use coupons or loyalty cards to save money. On top of that, there are other advantages of accepting digital payments. Some merchants offer discounts and rewards to loyal members, while others reward shoppers with points based on their purchases. As a result, digital transactions have become quite popular among consumers and business owners, considering their easy accessibility.
Advantages & Disadvantages
Now that you know what ecommerce is, let us take a closer look at its benefits for SMBs. Firstly, it is much easier to establish an online presence than offline. Online retailing allows entrepreneurs to create an engaging and interactive storefront that attracts potential customers. Secondly, online shopping provides greater flexibility in terms of working hours. Instead of spending an hour or two each day in front of a physical window, entrepreneurs can focus on generating revenue instead. Thirdly, a growing number of consumers prefer to shop online instead of visiting physical locations. Merchants often use virtual platforms to reach new market segments. Fourthly, although physical shops may have a limited set of products, people can access them through online portals. Fifthly, since modern smartphones come with applications and software, entrepreneurs can customize online shopping experience for customers. Sixthly, it enables direct communication with customers. No matter where they live or work, people are able to connect with brands through social media and messaging apps. Lastly, ecommerce helps to lower costs since customers don’t have to spend time travelling or parking lots.
Disadvantage 1: There are high initial expenses associated with entering the industry. Besides marketing products and developing promotional campaigns, the process requires hiring employees, opening stores, printing catalogues and implementing data management tools. Smaller businesses often lack funding, so they must rely on banks to accept commercial loans to finance expansion. A business loan can range between $25000 and $250000. Many businesses cannot secure bank financing due to unpredictable economic conditions. That may make starting up a problem-free venture a challenge. Second, sometimes customers change their minds about purchasing products and services. Sometimes clients will cancel or delay orders. Unfortunately, businesses don’t always get the right price for the products or services they want to sell. Finally, businesses must comply with legal standards related to taxes, health and safety, intellectual property and copyright. For example, if someone buys a product online, it becomes a commercial item and requires separate tax treatment.
Disadvantage 2: Another drawback of ecommerce is a loss of control over inventory and stock. Most brick-and-mortar stores have limits on how much inventory they can hold at a particular moment. If you run a smaller enterprise, there is less room to expand or replenish items. Also, once a client buys something, it may not be possible to return goods immediately. Even though online shoppers do not have to travel long distances, they still encounter challenges during shipment. Due to low stock levels and unpredictable traffic, they can feel shortchanged. Furthermore, small businesses have trouble getting enough funding for expansion. Depending on their financial situation, they may choose to adopt fintech solutions like crowdfunding, crowdfunding or P2P lending methods. Either way, they risk losing their business before things settle down and attract investors.
The Benefits of Implementing AI in Commerce
Businesses are increasingly using technologies like Artificial Intelligence (AI) and Machine Learning (ML) that help increase efficiencies in operations. These advancements improve speed, accuracy and consistency. Today, these technologies are widely integrated within ecommerce systems, improving efficiency.
· Using advanced analytics, AI algorithms learn about what people want, where they spend time and where they visit online. By processing large amounts of data, these programs help businesses to determine specific needs and behaviors, making future decisions faster and more effective. · Through predictive analytics, AI predicts consumer behavior and identifies trends and patterns. These techniques are useful because they give ecommerce retailers insights into how people spend, what they like and what they buy. Over time, the systems learn about past customers and better recommend products and services that fit their needs. With improved customer profiles, the company develops user experiences tailored to target market segments. These days, personalized recommendations enable users to shop in their own language and find exactly what they want, reducing confusion. For instance, when a shopper searches in Spanish, the search engine analyzes her language and sends relevant suggestions to similar keywords.
· Optimizing content and design is critical to attracting new audience segments. AI tools help brands attract potential customers who may be interested in related products. It can also identify trending topics and develop creative visuals that resonate with a certain type of audience.
• Chatbots solve customer problems and act in real-time. Unlike human agents, chatbots serve individuals 24/7. They usually answer questions and send automated responses. Users can communicate with chatbots via text or voice. Chatbots can help customers locate products and return to the shopping cart if needed. Additionally, they prevent fraud, increase transparency and enable faster transactions. Furthermore, chatbots can monitor customers’ actions and automatically respond to their requests. For instance, if an individual wants to renew his subscription on Amazon Prime, he can simply tell Amazon Echo. Siri answers everything, allowing the user to complete his orders in minutes. In contrast, a full-featured self-service checkout can happen in five to ten seconds.
· Automated Customer Service solutions like those offered by Square and LendingTree enable anyone to contact a merchant instantly. Chatbot providers like Drift, Thumbtack and Zendesk have created specialized modules designed specifically for small businesses. These modules, called “Bots,” automate routine tasks like responding to emails, checking social media pages and managing invoices. Bots can also initiate calls to support teams and respond to FAQs quickly.
· Personalization enables businesses to understand their customers better. Modern customer service bots can understand what types of messages worked best for each specific segment based on previous visits, preferences and actions. Based on data, they suggest suitable options, such as reordering, adding items and requesting additional payment information.
Wrap Up
All things considered, the advancement of ecommerce technologies has led to a positive evolution in the field of commerce. According to Statista, around 40% of U.S. adults use online channels as their primary source of online shopping. And according to McKinsey Global Institute, nearly 80 percent of businesses worldwide say their primary driver for their growth strategy is building customer loyalty through enhanced customer experience. Now that you know what ecommerce is, here is a step-by-step guide for setting up and running your ecommerce website or app.
