Simply having an online store is not enough when orders are pouring in and the internet becomes the only reliable distribution channel. That is why for 2021 managers often announced investment in e-commerce. What can they improve?
A report published at the beginning of the pandemic by Forrester Research forecast that spending on sales-supporting technologies at American companies would rise by 4 per cent year on year. The research agency indicated that e-commerce was already being invested in not only by retail companies but by manufacturers themselves - seeking easier, direct access to customers.
Those estimates turned out to be too cautious. During lockdown, huge numbers of companies sold mainly online - often for the first time - sometimes struggling to handle the increased demand. To sustain it, expanding online sales infrastructure becomes essential. A SearchNode survey from late 2020 conducted among e-commerce department managers shows that as many as 78 per cent of them plan to increase spending on digital solutions in 2021.
Experts from merce.com assess where the money flowing into the e-commerce sector can and should go
1. Improving site UX
Improving site UX
According to BigCommerce analyses for store owners using the platform, improving user experience on the store page will be the most important area of investment - pointed to by as many as two-thirds of sellers. Many of them are novice e-business creators who started with a simple store that they now want to expand. However, plenty of large companies also have e-store sites reminiscent of the internet we remember from 10 years ago.
- E-commerce could once afford opaque store pages requiring tedious clicking. They mainly attracted users for whom buying cheaply was what mattered. Now new customers are arriving in their millions. They want shopping to happen almost by itself, preferably on a smartphone. More and more often we also encounter users who care that the store is something more than a clickable catalogue and includes, for example, a car configurator, a convenient comparison feature for two phones that look identical at first glance, or intuitively suggests a live chat option with a consultant who will help with the purchase - notes Paweł Szewczyk, vice-president of the management board of merce.com
2. Logistics and warehouse management
Logistics and warehouse management
As with UX, growing competition between sellers means that delivery time - still acceptable to customers a few years ago - is now judged to be too long. A reliable way to shorten parcel delivery time is to expand the "hard" infrastructure - launching more warehouse space in the area where a company operates, so that the final customer is as close as possible to the warehouse shelf from which their order sets off. This is confirmed by information coming from the logistics industry indicating that demand for warehouse space for e-commerce has been growing rapidly in recent months.
Key e-commerce investments: the areas companies will spend money on
Logistics, however, is not only warehouses and a fleet of delivery vehicles, but also the art of managing the resources one has. A good IT system can use "soft" solutions to raise efficiency in this area. An example of such an approach may be the growing popularity of shipping from a physical store (ship from store) or customer pickup at the store (curbside pickup).
3. Omnichannel sales
Omnichannel sales
Omnichannel had been one of the industry buzzwords for several years, but only the pandemic made companies realise how important having multiple sales channels is for all aspects of their sales activity.
Channels no longer simply divide into online and offline. Within electronic distribution, an ordinary e-store, sales through an app or on a marketplace can operate. We also have hybrids of online and offline solutions, e.g. ordering home delivery of clothing in a size we could not find in a physical store, or a discount coupon for app users that they can also use in stores. That is why implementing an omnichannel strategy that creates synergy in sales is often an urgent task.
4. Integrations with marketplaces
Integrations with marketplaces
Globally, already in 2019 more than half - according to eToro as much as 57 per cent - of the value of online sales passed through marketplace-type services. The markets most dominated by them are the USA and China. This may indicate that in a few years a Polish manufacturer wanting to reach customers online will be forced to operate on Allegro, Amazon and similar places, because that is mainly where online purchases will be made.
Often marketplace services do not go to war with online stores at all, but invite sellers into their ecosystem, offering tools for automatically listing products there and for promotion in prominent places. To use them conveniently requires a not always simple integration of systems, which may, however, pay off in the future.
5. Analytics and conversion optimisation
Free tools such as Google Analytics allow you to find out, for example, how buyers reach the store and which products they search for most often in it. What works for online micro-businesses or companies that have only just launched an e-commerce department turns out to be insufficient when you want to base your distribution on the internet. It then becomes necessary to buy an advanced analytics system or build your own. Such a tool will make it possible to discover where customers heading to checkout are "getting lost" and to improve conversion.
- Better analytics in an online store will lead us to the top of the list of recommended investments, namely improving user experience. If, for example, we detect that a significant proportion abandon purchases at the moment of choosing the delivery option, this may be a sign that our logistics are lagging and buyers are not finding an attractive option for themselves. None of the planned e-commerce investments should be carried out in isolation from the other elements of online sales, so it is good to carry out a professional audit before starting investment in order to assess in which areas we have fallen behind the competition - advises Paweł Szewczyk of merce.com.
Summary
The report shows that the investment priorities in e-commerce for 2021 are improving UX, logistics, omnichannel sales, integrations with marketplaces and analytics. As many as 78 per cent of managers plan to increase spending on digital solutions, and two-thirds of sellers focus on user experience. It is worth emphasising that in 2019 marketplaces accounted for 57 per cent of global online sales, which forces companies to integrate with these platforms. Experts recommend a holistic approach, starting with an audit, in order to compete effectively in the digital world.
