Companies Continue to Embrace e-Commerce
E-commerce sales spiked during the pandemic, when lockdowns forced people to shop from home. By the end of the second quarter of 2020, e-commerce retail sales hit a record 16% of total sales in the U.S., according to the Census Bureau.* But the trend toward buying online had been steadily growing well before COVID-19. In the ten years before the pandemic hit, the share of retail sales from shoppers online more than tripled.*
The rapid growth in online commerce is not surprising, given the obvious benefits. For the consumer, buying remotely is more convenient and often offers greater product choice. And for businesses, going online can lower operating costs, vastly increase market reach and availability, and offer better customer support at a lower cost.
Accepting these market realities, an increasing number of existing businesses that had sold “in person” only are considering adding online distribution.
If your business falls into this category, we suggest the following as important steps to guide the transition:
Step 1: First and foremost, most companies find that some sort of cyber presence is necessary. Depending on your market and resources, you have a choice to distribute through an existing third-party sales platform, such as Amazon or, alternatively, you can build your own sales-enabled website. If you choose the latter option, your website should be considered your digital storefront and should mimic the experience that your customers would have in your physical store, including customer service options like chat features and product ratings and recommendations. The website should also make buying your product easy and worry free. There are several e-commerce platforms available to businesses to provide all the functionality an online business needs to transact business.
Step 2: Next, consider how to get customers to your site. Digital marketing has become increasingly sophisticated in recent years, and engaging specialists in this area is often beneficial. Key initiatives to take include optimizing your site for Search Engine Optimization (SEO) so the right internet users get to your site (based on key words used), targeted advertising through Google Ads, as well as on social media platforms, participating in online events and discussions to increase exposure and awareness, and possibly considering influencer marketing.
Step 3: Finally, your fulfillment capability must be able to perform flawlessly. It’s critical to get the right products to the right customers in the expected time frame, as well as to be able to accommodate returns and exchanges in a seamless and timely fashion. Luckily, there are also several companies available to e-businesses of various sizes to provide these services.
Expanding into e-commerce can keep your business competitive and result in significant growth and marketplace expansion. As you design your e-commerce strategy and line up the resources you’ll need to make it successful, we at Washington Trust are here to help.
*E-Commerce Retail Sales as a Percentage of Total Sales, FRED Economic Data, St. Louis Fed, May 19, 2022.
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