An investment in eCommerce – Is it worth it?
The short answer is yes - here’s why.
In February 2022, we surveyed local businesses to inquire about how they fared during the Covid pandemic and to ask what they saw as their most pressing challenges, both today and moving forward.
A quick recap:
The pandemic had a significant impact on sales for businesses locally and nationwide. Without the ability to fully utilize an in-person retail presence, a large percentage of businesses have experienced a rise in and expansion of their eCommerce activity or have taken steps to introduce their own online presence.
According to the businesses we surveyed, 34% stated that they derived 26% or more of their sales from eCommerce. Furthermore, a quarter of businesses saw their sales via eCommerce increase by more than 25% during the pandemic. Seventy-one percent of surveyed businesses said that since the pandemic, customers have increased their use of eCommerce to buy from them, and 54% believe that customers are using eCommerce more and physical locations less. These behaviors are causing a significant number of businesses to pivot and address their ability to conduct businesses electronically. Thirty-seven percent of our respondents indicated that as they begin addressing technology-related issues in 2022, they will make investment in eCommerce a priority.
The local and regional experience mirrors what is happening nationally. Outside of our survey, eCommerce sales in the US have increased by more than 50% since 2019, representing 13.2% of all retail sales in 2021. (census.gov). Online sales are expected to reach 22% of global retail sales by 2023, a number which is expected to increase.
The practical effects of eCommerce
Two Hands Paperie, a stationary store in Boulder, Colorado, was among the small businesses that invested heavily in eCommerce during the pandemic. They doubled down on their eCommerce strategy with curbside pickup, online orders, and a warehouse to store products for online shipping. This strategy kept them afloat during the worst months of the pandemic, and though store sales decreased, their total sales exceeded those of pre-pandemic, with a 700 percent increase in online sales. (NBC News)
Closer to home, The Chef’s Garden, which emphasizes traditional farming methods and innovative technologies to deliver vegetables, herbs, and microgreens to some of the biggest names in the food industry, adjusted to the drop off in sales due to restaurant closures during the shutdown by launching an eCommerce initiative targeting at-home consumers, (jobsohio.com.) Roads, Rivers and Trails, an outdoor clothing outfitter located in Milford, Ohio, bolstered its eCommerce presence during the lockdown and saw revenues grow by 24% in 2020 and 48% in 2021, (Cincinnatimagazine.com.) Honey and Abernathy, in downtown Delaware, sells soaps, bath products, teas and honey. When store traffic virtually disappeared in 2019 and 2020, the store increased emphasis on eCommerce and now ships most of its products to customers both locally and regionally, (WCMHTV4.)
Larger business also reaped the benefits of eCommerce. Kent Water Sports in New London, Ohio, operates 10 facilities in the U.S. and one in China and serves both big box and mom and pop stores. Demand for their products soared following the shutdown. The company updated its online ordering and payments processes for its partners, using Microsoft Dynamics 365 Commerce to unify its B2B software and systems. Partners and sales reps, both, found the system easier to use than the old ERP system and sales skyrocketed.
Online storefronts are increasingly becoming the place where customers want to do business. And expanding your eCommerce presence is essential in giving customers who may not be able or inclined to visit a storefront the options to shop locally and support local businesses online.
What does eCommerce offer you?
Since an eCommerce store is centered online, it offers a low-cost model to sales. There is no need to invest in real estate or hire a vast sales workforce, and so a business will benefit from lower operational costs. And with the technology solutions available today, an eCommerce storefront is easier to set up and run than a brick and mortar equivalent.
eCommerce brings other benefits:
Greater ability to target customers – locally, nationally or internationally.
Easier marketing, using targeted digital advertising, search engines, and social media platforms allows you to target customers more efficiently.
More information on your customers means you can quickly change your offers, identify what products are selling, retarget for additional sales, and personalize the shopping or ordering experience.
Greater operational efficiency, including inventory management, returns and delivery.
Faster go-to-market times means it’s easier to scale.
The ability to complement brick and mortar or traditional sales or distribution outlets.
Many of these benefits also apply to larger, B2B companies, where process efficiency and increased sales are the primary goals. Your online store is the only thing capable of working 24 hours a day – think of it as an extension of your sales team.
How do you get started in eCommerce?
Let’s assume that you have decided that you need an eCommerce presence: Your customers demand it, you believe it can bring new opportunity, or the business world as you know it has been flipped on its head by a global force beyond your control, like a pandemic. You need an online storefront and the most important place to begin is with your website – the first place you introduce your product or service to a prospective online customer.
You’ll first want to settle on the platform for your website. While it’s perfectly possible to host your own, for many small businesses it may be easier to choose an eCommerce platform to do it for you. An eCommerce platform is a software enabling you to manage your online store – this includes website design, accounting, inventory management, sales, and payments. Some of the most popular are BigCommerce, Shopify, and Squarespace, which all offer you site templates to make the design and build process easier and your site quicker to launch.
Once you’ve chosen a platform, your goal should be to design a website that presents your company and product favorably. Customers should understand quickly what it is you sell, why it’s a good option, and have access to any relevant details and specifications of the product they need to make a purchase decision. Your website should also:
Be easy to navigate
Provide product descriptions, photos or videos
Encourage and provide product reviews
Provide an easy check-out or ordering process, including order tracking
Provide customer service options, such as Live Chat or, at minimum, phone numbers to reach a live person and a contact form that customers can submit
Encourage visitors to opt in for future emails
For larger companies, especially those focused on B2B, similar packaged solutions are available. We’ve already mentioned Microsoft’s Dynamics 365 Commerce, and solutions like OSF Digital’s QuickStart, which promises a four-week timeline, can build a new online distribution channel for business, including the digitalization of the ordering process, website design, procurement, and reporting processes.
Security is important to the customer – and your business!
Using an eCommerce platform also provides a basic level of security to transactions. One important best practice for security is to make sure your software is always up to date, and most eCommerce platforms will do this for you automatically. You’ll also want to keep backups of your data and remember the importance of strong passwords – the stronger the password you mandate for your customers and employees, the less likely it is there will be breaches. Be sure to prominently display the levels of security you provide on the website to reassure visitors.
Though your eCommerce storefront should have basic security measures in place, there are many others you can take at this stage to improve your appearance and build trust with your customers. It’s useful to consider switching your site to HTTPS hosting – this is an encrypted form of hosting, which further secures communication to and from your website and even helps increase it in SEO ranking. It’s always worthwhile to consider implementing additional authentication as well to make sure authorized users are the only ones able to login – two factor or multifactor authentication can provide the security you are looking for. (BigCommerce)
If you’d like to have a more specific checklist on security or learn more, check out our recent webinar with Scott Montgomery here.
Buying and selling – the basics
After these steps are taken care of, you’ll need to find a way to process your customers’ purchases. Some eCommerce platforms, such as Shopify and BigCommerce, offer a wide range of payment methods you can use. Outside of these, you can work through your bank – which offers merchant services or credit card processing – or directly through a merchant services provider. Though there’s no right or wrong answer, whatever you choose, it’s best to diversify your customer’s payment options to avoid any issues with an exclusively one-payment solution.
After you’ve processed payment, you need to decide on delivery. If you’re selling digital products, they can be offered as a download, but physical goods either need to be shipped or picked up in the store. In fact, there’s a growing interest in in-store pickup, with 68% of shoppers saying they’ve used this method of delivery and 47% saying they’ve done so to avoid shipping fees. Offering a mix of delivery options gives your customers the freedom to choose and increases your odds of making a sale. Also, it’s important to offer a generous returns policy on items. This is beginning an eCommerce standard, designed to off-set any perceived inconvenience to shopping online.
How do you enhance your eCommerce presence?
It’s not enough to have an eCommerce presence up and running – it must also be able to reach and appeal to your customers. There are a variety of ways to enhance your eCommerce presence to improve the visibility of your site and your customer retention.
In the digital space, begin with SEO, because its importance cannot be understated. SEO stands for search engine optimization, and your SEO ranking increases the visibility of your site when people search for related products or services in search engines like Google. Since search engines are where most people go to find products, this is a primary way of attracting new customers and traffic to your website. Though there are a wide array of SEO best practices that will need to be followed to promote your business to its full extent, some of the essentials are including keywords on the pages and in the titles in your website and boosting the loading speed and mobile friendliness of your site. Many eCommerce platforms will also offer SEO tools to improve your rankings. For more advanced techniques, look to local companies who specialize in website design and digital marketing.
Since making sure the web page loads quickly is so important to SEO, it’s essential to make sure you can handle the volume of eCommerce traffic you receive. This is the job of your web hosting solution, and modern web hosting companies – such as the ones you might choose as an eCommerce platform – make this easy, informing you of the volume of traffic and providing you the option to upgrade to a larger plan at any time.
Likewise, it’s important to optimize your store for mobile. Even outside of SEO, by 2025, it’s expected that mobile commerce sales will make up over 10% of US retail sales, and today 49% of people shop on their mobile phones. (Brizfeel) And a good mobile website also helps your customers – improving yours will enhance their experience on the site and lead to greater sales. Google reports that 62% of shoppers are less likely to make purchases from a brand following a negative mobile experience, so it’s very important that you do all you can to improve this avenue of access.
Beyond SEO, marketing is also an important step in letting customers know your online store is open and beginning to develop relationships with them. As a first step, be sure to provide visitors with a way to “opt in” and give you their emails to receive upcoming information or offers from you. For more aggressive marketing, you will want to use a variety of campaigns to boost your online presence, depending on what you think you’re lacking. Digital advertising can help promote your store when it’s getting started, and once you’ve got your customer base, you can use email and social media marketing to stay in touch with customers and provide them new offers. A great source for digital advertising and advice is the advertising department at your local radio or TV station. Larger stations have their own websites and digital marketing specialists who can advise on where best to advertise and in which way. Yes, there’s a cost to advertise, but the beauty of digital advertising is that you can set a budget upfront and pay only for the results you receive.
When the Census Bureau first tracked eCommerce in 1998, they reported it generated $5 billion in sales annually. In 2020, that number was $800 billion, boosted by a 43% growth boost from 2019, partly due to the pandemic. Similarly, B2B eCommerce is projected to represent 17% of all sales by 2023. Whether through necessity or perceived opportunity, establishing an effective eCommerce strategy can no longer be left on the backburner.
If you would like more information on resources to help with your strategy, reach out to a member of our Business Banking team or fill out the contact form located here.
The First Citizens National Bank is the 4th oldest national bank in the United States still operating under local leadership. It prides itself for its unique style of community banking, blending leading-edge technology and convenience with outstanding personal service, and access to experts who provide advice and tailored solutions to more complex financial questions. Founded in Wyandot County in 1860, the Bank operates thirteen banking and ATM locations in Wyandot, Hardin, Marion, and Delaware Counties, including branches in Powell, Marion, Delaware, and Upper Sandusky. The Bank is a trusted partner to local businesses in north and central Ohio. They understand the critical importance of business success to community and community health and are invested in providing content on topics that are of importance to success of local businesses.