Within a decade, the business atmosphere has experienced a drastic evolution. The rise in the use of the internet and advancement in technology has forced businesses to explore the online space, augmenting e-Commerce, or completely departing from the traditional retail model of business. E-Commerce refers to the buying and selling of goods and services over the internet.
The rise in popularity of e-commerce is attributable to several factors that give it an upper hand over traditional retail. According to Saigon Technology, a top custom software development companies in Vietnam, here are the top 5 reasons:
1. Elimination of geographical limitation
Establishing digital presence results in your brand being visible and accessible from anywhere in the world. Picture this, if you have a physical store, only a select group of people residing close to the store location can notice your brand and access your services. But things are different in the e-commerce world. Clients from any part of the world can access your store, check out your products and services and proceed to purchase items from you.
Elimination of geographical boundaries comes with several other benefits for businesses. Beyond setting the stage for brands to increase sales, it also sets them at a vantage position to streamline operations by adopting emerging technologies such as Artificial Intelligence and Blockchain, among others. Through these, retail businesses can significantly boost their competitive advantage by seamlessly offering personalized services to clients across vast geographical regions.
The elimination of geographical limitations also links to increased brand visibility. Unlike traditional retail, e-commerce can generate massive organic traffic. The rise in popularity and preference on the use of smartphones means people can access your website with ease through search engines. With proper search engine optimization, the chances of improving your ranking on the search results increase, translating to increased visibility and, consequently, conversion of sales.
2. Operate 24/7
Typically, a physical store has defined hours during which they can serve clients. This means visitors have to physically visit the store to make their purchase within stipulated times. What that translates to is, customers with inflexible schedules cannot access your goods and services. Further, one has to invest their time to get to the store physically.
E-commerce is different and better in the sense that it gives businesses the power to function round the clock. Shoppers from all time zones can get onto the online store and shop at any time. Of course, this points back to the aspect of improved brand visibility. However, it also translates to convenience on the side of the customer.
Through the adoption of features such as AI-powered Chatbots, clients can access customer support 24/7. Blockchain technology, on the other hand, allows them to make secure payments for the goods and services they purchase. These highlight the fact that there exist technological tools that allow you to offer maximum customer satisfaction in your service delivery, regardless of the time.
3. Cost-effectiveness
One of the major advantages of e-commerce over physical retail stores is the reduced cost of running the business. This is achieved from various fronts. Firstly, advertising costs are significantly lower for online stores compared to physical stores. Instead of relying on traditional mainstream media advertising platforms, e-commerce stores can rely on paid adverts on social media whose costs are much lower but have a wider reach and conversion rate.
The other fronts are related to the reduced cost implications of maintaining human and real estate resources required to maintain a physical store. The virtual cart, automated checkout, billing, and payments, coupled with automated inventory management, eliminate the need to have employees to handle these tasks.
4. Ability to collect customer data for insightful analytics
Businesses are increasingly in need of gathering and utilizing data to make informed business decisions. E-commerce allows businesses to collect a wide array of customer data that provides a good overview of business performance. Data on the most purchased product, most viewed product, customer reviews, etc. can give insightful information on areas of strengths and weaknesses of the business and how it can be future-proofed.
Further, the ability to collect a comprehensive compendium of data means businesses can adopt data-driven disruptive technologies such as Artificial Intelligence and Internet of Things.
5. Increase capacity to process orders
With e-commerce, the biggest challenge is establishing strong and effective frameworks for handling the logistics of order deliveries. With an efficient framework in place, businesses can scale up the number of orders they process than the number of orders one would process when in a brick-and-mortar store.
Another aspect of increasing capacity is the ability to offer a wider variety of products, especially those that complement the primary products your brand deals in. This creates room for boosting sales, increasing revenue and optimizing profits.
Final Thoughts
The traditional model of running businesses remains dominant in today’s world. However, e-commerce has proven effective in providing businesses the stepping-stone to get to the next level. If you are already running a traditional retail business model, adopting a hybrid option where you maintain both the physical stores and an e-commerce store could help you rip from both ends.
