Top 7 Opportunities In Online Sales is a presentation on eCommerce trends that increasingly present a growth opportunity to businesses of all sizes.
The Changing Retail (Consumer) Landscape
The first of the Top 7 Opportunities In Online Sales is the changing landscape; the simple fact that consumer behavior is changing in favor of online sales.
51% of Americans now prefer to shop online. The number goes up to 56% of Gen-Xers, and 67% for Millennials.
The current annual growth rate for online sales is 14%.*
Think about this: Black Friday and Cyber Monday no longer mark the start of the holiday shopping season.
Instead, shopping holidays are now part of an entire shopping season that kicks off in late October early November.
We now call that Cyber-November.
The reason? eCommerce. This is not a fad. These are solid trends.
What can you do about it? Get serious about eCommerce.
The easiest and most cost-effective way to capitalize on this opportunity is using one of the many Software as a Service (SaaS) ecommerce platforms available to any size business.
Some of the top benefits of SaaS eCommerce
- Lower total cost of ownership – With their lower total cost of ownership, SaaS ecommerce platforms can cost up to 75% less than self-hosted solutions.
- Business app integrations – With the multitude of business app integrations, their robust APIs make it easy to integrate with your preferred applications like CRMs, order management systems, email marketing, tax tools, and shipping and fulfillment systems.
- Customization – Contrary to common misconceptions, modern SaaS is very flexible, allowing customization of top-notch responsive themes, and using popular coding languages.
- Back-end scalability – SaaS platforms take care of managing, maintaining and adding hosting resources as needed.
- Time to market – SaaS-based stores are up to 50% faster to deploy than self-hosted websites, saving merchants. Simply design, test, and deploy. No need to select or implement infrastructure. SaaS can get your selling online tonight.
- Security & compliance – With a SaaS platform, updates, maintenance and PCI (PCI DSS Payment Card Industry Data Security Standard) compliance are covered for the merchant.
Major Retail Trends
The second of the Top 7 Opportunities In Online Sales is the combination of trends in retail.
Decline of Traditional Retail
We are seeing the decline on traditional retail, with many of the most famous brands in retail now gone, or seriously endangered. This is an opportunity for online retailers, and even small brick-and-mortars, to differentiate with online sales.
We can see that in the move toward Vertical Integration, another trend in retail.
A big opportunity lies in companies that Design, Produce, and Sell directly to the consumer. Many major brands already do it. For example: Apple, Microsoft, Nike. But also smaller brands that have grown thanks to vertical integration, like Warby Parker, Bonobos, and Toms Shoes.
One way of doing Vertical Integration is by using a White Label manufacturer. Here, a product designer partners with a manufacturer that produces the goods. The brand owner offers a direct sales channel by setting up an online store.
On-Demand Vertical Integration takes the idea further by partnering with an on-demand producer. These are producer with the capability of producing small numbers of your products ,reducing inventory costs and freeing cash flow.
Some examples of on-demand providers are:
• Shapeways, which produces 3D printing.
• Ponoko, which makes laser-cut products.
• Zazzle, Cafe Press, Tee-spring, and Printful all produce many apparel and promotional items. Printful even integrates with your online sales channels to automatically fulfill orders.
Another major retail trend is Location Independence. The idea is that nowadays we can design products in one location, produce somewhere else, sell directly online, and fulfill remotely. One can even outsource customer service
Yet another major trend in retail is Indie Brand Aggregation.
This consists of curating independent manufacturers or brands under a single eCommerce brand or store.
One can curate products under a single “aggregator” brand store and take care of fulfillment for them. Another option is to curate products from drop-shipping partners. Upon receiving order, the drop-shipping partner fulfills the order.
In the conversation of Indie Brand it’s worth pointing out one can BE the Indie Brand. This goes back to Vertical Integration: If you own design and manufacturing, become a retailer and distributor by creating a direct sales channel through your online store and other marketplaces (Think Etsy, Amazon, Social Media).
The last of the major retail trends is Subscription Retail.
“the majority of shoppers seek to fulfill two basic needs: social connection and convenience.”
– Robbie Kellman Baxter, The Membership Economy
From services to products, being subscribed no longer has that “ickyness” factor it used to have.
Some examples of successful subscription retail businesses:
- Dollar Shave Club, sell razors and other personal grooming products
- Honest Company offer an easy, disposable diaper subscription
- Blue Apron delivers weekly pre-portioned meals.
- Stitch Fix and Trunk club deliver personally styled apparel
- Birchbox delivers makeup and other beauty related products
How can yo succeed in subscription retail? Find a gap in the market that competitors in same vertical have ignored, go Upmarket or Downmarket. In short, find a niche. There’s bound to be an untapped niche you can serve
Other tips for success in subscription retail?
- Make Unboxing an Experience. Create a pleasing package-opening experience, and have users create content showing them opening your product.
- Find the Shops that failed and try to learn from their mistakes, or imagine a better way to do it.
- Enable gifting. Create a checkout experience that allows shipping to a different address, include a message, maybe even get gift-wrapping
The third of the Top 7 Opportunities In Online Sales is the availability and expectation of an Omni-channel.
“The consumer doesn’t see a difference between an online store, a physical store, and interacting with a company on Facebook; he’s dealing with a whole brand and not just its parts.”
– Charles Desjardins, Absolunet
What this means is you are expected to have your online presence not just in your store, but also marketplaces like Amazon, eBay, Etsy, and Google Shopping. Most of these are available as an integration through most SaaS.
While you’re expanding to other channels, consider Social Commerce. You can now sell directly in, or through, Facebook, Pinterest, Twitter, and Instagram
Multi channel also means Mobile Commerce. Mobile Commerce is not just about mobile responsive websites – which are a must. Think also of your mobile as a Point-Of-Sale, and integral part of your store. There are many ways to enable mobile commerce, including Square, PayPal Here, Clover, Capital One’s Spark Pay, and many others.
As your work on the Omni-channel, think in terms of Unified Commerce, not silos. For example: Shoppers using their smartphones while in your brick and mortar store. Users thinking of the store as showroom.
Omni-channel literally means everywhere.
The fourth of the Top 7 Opportunities In Online Sales is the growth in importance of the Customer Experience
“The fastest growing companies are comparing the cost per acquired customer to the lifetime value of customers, rather than just looking at the immediate return from the customer’s initial purchase.”
– Corey Pierson, Custora
For better Customer Experience, think in terms of Customer Lifecycle Management. Know your customer and cater to where they are in the lifecycle.
It’s never been as easy to achieve customer loyalty, so get ready to make an investment in CRMs, Email Marketing, eGift cards, Wish lists, Recommendations, Cross-selling/Up-selling. Bundling and personalization.
For Customer Segmentation, you have the amazing demographics and psychographics information available to you in your Google AdWords, Facebook Ads, and other analytics tools.
Automating is caring. Chatbots allow a concierge approach to customer care: from consulting, to taking orders, from a private app, to a simple Facebook Messenger integration.
The improvement of the Customer Experience is also closely tied to the end of cash (this time, for real). That means the modern, minimalist store is equipped to accept mobile and credit card payments, but no actual hard currency, same as online.
The Uber-ization of Shipping allows many stores to operate out of smaller spaces, which serve as showrooms, fitting rooms, or drop-off or pick-up points. Customers order the product they want after having seen it and touched it. Fulfillment happens elsewhere, maybe by a third-party.
Pay attention to what’s next in Customer Experience:
- Drones. Big companies are already using or involved in the use of drone tech for business. It shouldn’t take long for these to become available to us all.
- Beacons –These have have actually been around since about 2014, and allow a one-way communication based on proximity.
- Augmented & Virtual reality promise virtual testing rooms and shopping carts, taking the Customer Experience even further.
Number five of the Top 7 Opportunities In Online Sales is Big Data becoming available to small and medium businesses.
Small and medium merchants can not automatically update pictures, descriptions, price comparisons and a wealth of data about products simply by accessing large databases. Good descriptions and information mean more sales!
Merchants can also use predictive analysis to better understand consumers’ purchasing habits, preferences, and, yes, even their next purchases, based on the behavior of other customers with similar profiles. Data is widely available, find the information within it.
Number six of the Top 7 Opportunities In Online Sales is Inbound Marketing Content and Social Marketing continue to be the biggest differentiator between success and failure online.
Small and medium stores can focus their content on a small niche, really show off their personality, and stand out from the competition. In a way, being small to medium size is an unfair advantage.
Conversion Rate Optimization
Finally, number seven of the Top 7 Opportunities In Online Sales is Conversion Rate Optimization
“Most retailers are focusing on traffic generation, not conversion rate optimization, which is where most of the potential lies.”
– Neil Patel, Quicksprout
The main reason Conversion Rate Optimization is a huge opportunity for eCommerce is that it’s vastly untapped. As a way of example, on a store that currently has 1.42% conversion rate on sales of about $65,000 per year, a 1% increase in conversions almost doubles revenue. How do you improve your conversion rate?
FIRST, understand the current issues with your online channels and your audience. The best way is to study usability and analytics.
THEN, build a robust, mobile-first website, with great information architecture, content, and best practices in user experience. A good Information Architecture makes it easy to navigate and find products. Quality Content means professional images and great descriptions.
Implement a good Pricing structure, coupon codes, and if possible, free shipping.
Get an optimized, single-page checkout for your online store.
Implement trust-building factors like Live Chat and Product reviews & testimonials.
Make sure website design focuses on “The Next Step”, paying attention to buttons like “Options”, “Add to Cart”, and “Checkout”. Reduce the number of Calls-To-Action. Use good spelling.
Conversion Optimization is not a set-it-and-forget-it tactic, but an ongoing effort. Measure, make changes accordingly, and iterate as needed.
Retargeting & Re-marketing
Another Conversion Optimization tactics is using Retargeting. This is when your brand serves an ad to someone who has previously visited your website. Pixel-based retargeting is probably the most common type of retargeting.
Re-marketing is the tactic that tries to bring a prospect back and convert to a paying customer. The most common form of re-marketing is abandoned cart recovery. This is where one send a series of email to someone who left the store, enticing them to come back and buy. Re-marketing is available through most top SaaS online store platforms.
Top 7 Opportunities In Online Sales
These are the guiding trends that can drive a successful e-commerce business and digital marketing plan:
- The Changing Retail (Consumer) Landscape
- Retail Trends
- The Omni-channel
- Customer Experience
- Big Data
- Inbound Marketing
- Conversion Rate Optimization
The Bottom Line
If you’re not big box, you’re actually at an advantage in your local market, and the potential to expand nationally, even globally.
We’re rooting for you,
*As of publication date a new report by Internet Retailer shows growth at 16%.