While Amazon is huge in the online retail business, there is still plenty of room for smaller online retailers as long as they make themselves stand out in such a competitive marketplace.
With online retail giants like Amazon dominating the marketplace, e-commerce is an industry that remains strong and is continuously growing. The e-commerce industry in the U.S. grew by 15.6 percent in 2016 to a value of $394.86 billion and reportedly makes up 42 percent of all retail growth, leaving plenty of room for competition.
Trends to Look For in E-Commerce
We’ve seen everywhere that e-commerce is on the rise and that brick-and-mortar stores may no longer stand a chance. Experts point to many different trends in both technology and society that have led to the rise of online transactions.
One trend is product bundling, which allows customers to bundle multiple items into one purchase. The bundle is often discounted at a rate of around 10 percent. In previous years, bundling has been marketed as a great sales tool — however, we didn’t see its true growth and rise until last year. Bundling also allows a company to increase sales while decreasing inventory levels.
Other trends we’ve seen include new shipping methods and cross-border partnerships. More developments that e-commerce businesses should be aware of in the coming year to stay competitive are listed below.
1. Move Quickly
One of the strategies a business must adopt if they wish to be competitive in the e-commerce industry is to act quickly in response to market movements. This means they need to be attentive when opportunities present themselves and when other companies make changes, like when they exit the market or remove certain products.
It is also important to remember that online, it is easier to test specific products and take opportunities which physical companies may not be able to.
2. Innovate on Customer Experience
Make it personal — that is one of the bottom lines for e-commerce industries. Innovating how to present the best customer service includes connecting with customers on a more personal level. This may mean providing them with tools and engaging them in ways physical stores may not be able to.
Without a sales associate available to help them, it is important for companies to originate other ways they can present excellent customer service and engagement.
3. Adapt to New Technologies
Adapting to new technology in e-commerce incorporates artificial intelligence and virtual reality. There are numerous examples of online retailers taking advantage of AI and VR. Original Stitch, a tailoring startup, is using AI to measure a customer’s clothing and replicate the measurements without the customer having to take measurements themselves. The company then ensures they make a clothing item that best fits the customer.
Using advanced technologies is something many stores are not able to do as well as online retailers.
Another method is to take advantage of mobile commerce. It is reported that by 2020, smartphones and mobile devices will account for over three-quarters of e-commerce transactions. This means online companies need to adapt to mobile devices, such as accommodating mobile payments and app-based services.
4. Use Advanced Analytics
Online companies need to take advantage of the advanced analytics they are given through website tracking technology. This is something brick-and-mortar stores have no chance of being able to do, so it is important for e-commerce companies to use this to their advantage.
Retailers can also track a customer’s journey throughout their website and gather data on where they are going and what they are looking at. All of this data is then compiled to generate insight into customer behavior on the site and how each product does with the average customer.
5. Personalize the Experience
Personalization goes along with using the advanced analytics website services provide. The customer data gathered from websites generates insight into what works and what doesn’t.
This may take the form of catering to a customer’s geolocation or sending them specific push notifications. A report by Wharton researchers states 35 percent of Amazon’s sales come from recommendations that appear on the site after a customer has viewed a specific product. Recommendations are an excellent personalization tool online companies should use effectively.
Use the Tools Available
There are so many tools available to e-commerce companies that are not available to brick-and-mortar companies. While e-commerce companies use these tools to compete against physical stores, they also need to use them smartly to compete with other online retailers.
Personalization and customer service tactics are key to retaining and gaining customers. Consistently using these tools and enhancing them will allow e-commerce to provide superior customer service so many online shoppers are looking for.