12 benefits of an e-commerce

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There has never been a better time to start an e-commerce business. Online shopping has grown exponentially through the last decade, and it shows no signs of slowing down. Research performed by Statista shows that retail e-commerce sales in 2021 amounted to $4.9 trillion worldwide, a figure that is expected to increase by half its size during the coming years (source). It has been forecasted that by 2025 more than $7 trillion will be generated yearly by the electronic commerce industry.

What is e-commerce?

E-commerce is the practice of selling goods and services through online stores. E-commerce sites have become substantially popular in recent years due to the various advantages they offer compared to physical stores, both for the seller and the consumer.

What are the advantages of e-commerce over traditional retail?

The advantages of e-commerce include:

  1. Online businesses are cost-effective
  2. Selling around the clock
  3. International online presence
  4. Personalized customer service
  5. Flexible payment
  6. Motivate spontaneous sales
  7. Create return customers
  8. Electronic commerce creates data
  9. Fast buying process
  10. Increase scalability
  11. Boost organic growth
  12. Mobile e-commerce

1. Online businesses are cost-effective

Many costs associated with running physical stores can be mitigated by moving a business to the Internet. A brick-and-mortar store has to invest in-store signs, paraphernalia, interior design, equipment, bulk inventory, and many other key factors for its success. Furthermore, thousands of dollars must be spent renting a physical space.

The costs of running e-commerce sites are considerably lower than those of a traditional business. Besides saving money on rent, online retailers don’t need to print out physical signs or invest in any other ornamental structure. The wares of online stores don’t need to be on-site at the moment of a purchase and office space becomes redundant since e-commerce models allow employees to work remotely.

E-commerce businesses can also reduce costs by optimizing manpower. Nobody has to stock shelves or scan barcodes on an online store. The lack of physical wares and cash registers also means that break-ins and petty theft are not an issue, so an online business can also save money that would be spent on security measures. Businesses can choose to pocket these expenses or repurpose the money to strengthen their marketing strategies, generating new growth opportunities.

2. Selling around the clock

It is incredibly hard to find an open retail store at 3 a.m. on a Sunday. Thankfully, e-commerce sites paint a whole different picture. Online stores are open 24 hours a day, 7 days a week, without the need for clerks and managers to be awake. Thanks to online shopping, night owls can browse products and purchase at their own pace, at their preferred time of day.

Being perpetually open for business means that customers who would otherwise go to a store on the next day have a chance to buy a product earlier, just as their itch kicks in. It also gives people who work odd hours to acquire their favorite items without having to make drastic changes to their schedules.

3. Online presence at an international scale

E-commerce models give businesses a competitive edge on a global scale. The worldwide adoption of trendy products such as blue jeans and pop music is proof that there’s a customer eager to acquire the latest commodities on every corner of the earth. International sales are a great way to reach new markets and demographics, boost exponential growth, and improve brand recognition.

Back in the days of the silk road, it could take a merchant at least 4 years to go from Europe to China and back. However, in 2022, one can expect an express shipment of products from China to arrive at a warehouse anywhere on the planet between 7 and 14 business days. It has never been easier to do business internationally.

4. Personalized customer service

One of the main e-commerce advantages is the ability to create a personalized customer experience. You can charm your clients from the moment they reach your landing page all the way to the purchase confirmation email with the help of web design and automation. If you have a well-developed e-commerce site, your customers will be enticed by your offers without you having to lift a finger.

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5. Flexible payment methods

The customer experience can be further personalized with the addition of flexible payment options. There is a much lower chance for a customer to drop a purchase if they have the freedom to choose how they will pay for it. While many clients find using a credit and debit card extremely convenient, others prefer alternative payment options.

For example, an e-commerce site built on Prestashop can accept payment from a variety of sources:

  • Credit and debit cards
  • Paypal
  • Amazon pay
  • REDSYS card payment
  • Stripe official
  • Viva Wallet Standard Checkout
  • Bitcoin and other cryptocurrencies
  • Cash on delivery
  • Card on delivery
  • Digital wallets and other local payment methods

6. Motivate spontaneous sales

People browsing e-commerce sites are more inclined to make an unplanned purchase than those visiting physical stores. A poll conducted by creditcards.com reports that 4 out of 5 millennial consumers admit to having made an impulse purchase while using an online shopping platform (source).

Potential customers find the vibrant colors and web design of online businesses extremely alluring which improves marketing efforts. Moreover, an e-commerce site can convince a customer to make an impulse purchase by showcasing limited product quantities, offering free shipping and discounts, or by placing countdown timers for sales and exclusive products.

7. Create return customers

One of the most profitable benefits of e-commerce models is the capacity to create ads that directly target customers who have shown interest in your store. The convenience and simplicity of online shopping can be coupled with perks and incentives so that, whenever customers go back to your store, they feel comfortable and eager to spend.

A loyal customer base is extremely important for the success of a business. Not only are return customers expected to buy more and more often, but they can also run part of your marketing strategy for you by recommending your brand to their friends and family. Together with good online marketing efforts, loyal customers can guarantee your business will have an ever-growing audience.

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8. Electronic commerce generates data

Data has become one of the most valuable commodities on the planet, so much so that it is now called “the new oil” by many economists. From preventing traffic jams to discovering new life-saving drugs, data has a myriad of potential uses. One of the key benefits of interacting with customers in an online ecosystem is that you can gather valuable insights into their opinions and behavior. 

Data can help you gain a better understanding of the needs and desires of your customer base. Performing an analysis of customer behavior can provide a business with data it can use to market itself more effectively. Data can also help businesses foresee changes in customer trends and other patterns that affect profitability and brand loyalty.

Capitalizing on a trend just as it begins to develop can generate substantial value and profits for a business. For example, Amazon noticed the rising popularity of video streaming and decided to launch Twitch, an interactive live-streaming service that boasted 2.84 million active users and made over $2 billion in revenue in 2021.

9. Process a large number of orders

There are no checkout lines on e-commerce sites. Customers of online stores do not have to queue to buy products, and automatic checkout processes make buying online fast and convenient. While a brick-and-mortar store’s sales are limited by the amount of inventory it can keep in stock, an online business can offer potential customers products it can then ship from a separate location.

10. Increase scalability

The growth of physical stores is restricted by the finite space of their premises. Stores that wish to expand their operations must first renovate their spaces or move to a bigger location, becoming subject to fees that can amount to thousands of dollars. If a physical store wishes to undertake revamping operations then it must also stop doing business until renovations have been completed.

In contrast, online stores can rapidly scale their operations with strategically planned marketing efforts. New products can automatically be offered to potential customers by simply adding their information to the site. Since there is no physical limit to the amount of product an online business can offer, that means that supply can be increased without having to worry about demand in the short term.

11. Boost organic growth

E-commerce sites can use creative content solutions to drive traffic towards their site organically. From e-commerce blogging to generating video content that is relevant to your users, there are many innovative strategies a business can leverage to catch its customers’ attention. Content generated for an e-commerce website can also include retargeting ads and other monetization practices able to generate a revenue stream independent from a business’s usual operations.

The content a business generates must resonate with the expectations of consumers. For example, if a store specializes in coffee and coffee-based products, its content should be geared towards enhancing its users’ experience with coffee. A video showcasing the best way to prepare a latte can drive traffic from coffee enthusiasts and show the customer base how to gain better enjoyment out of a product.

12. Mobile e-commerce

The smartphone has revolutionized the way we work, play, watch the news, socialize, and much more. Since e-commerce can be done from any device that can connect to the Internet, the widespread adoption of smartphones means that clients are using them for their online shopping needs.

By using a mobile device, customers can browse online stores from the comfort of their homes, during their leisure time or whenever is most convenient for them. This gives online businesses a competitive edge, especially since the practice of showrooming is becoming prevalent among younger generations. Showrooming is the practice of consumers going to physical stores to preview products, then going to an e-commerce site to purchase them. Even though this presents a threat to the world of physical retail, it opens up a world of opportunity for the online shopping world.

The reasons why customers decide to go showrooming speak directly to the benefits of electronic commerce. Reduced overhead costs make products sold online cheaper, plus stock availability means that if an item is out of stock, a customer is more likely to go buy it online instead of waiting for a restocking. Moreover, online businesses ship products directly to customers’ homes, a much-appreciated convenience for many.

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