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Sector Spotlight: ECommerce

Since the COVID 19 lockdown, consumers have been embracing online retail.

The fallout from COVID 19 will dramatically change consumers shopping habits; despite shops now reopening, customers may prefer to shop online to avoid large crowds and queues.  

In the past, the over 40s have been reluctant to shop online; however, lockdown and social distancing rules have encouraged this new demographic of shoppers to engage with ecommerce sites. This is great news for the sector, as this demographic’s consumer spending amounted to roughly £800 per week in 2019

Overview 

The UK has the largest ecommerce market in Europe and the third largest globally. The biggest online retailer is Amazon UK – accounting for 30% of all ecommerce sales in 2019 – followed by eBay UK, Sainsbury’s, Tesco, Asda and John Lewis. 

eCommerce

In 2019, 82% of UK households made ecommerce purchases, achieving the highest online shopping

penetration rate in the country in the last 11 years. Clothing and sports items were the two most popular online purchases.

The US and Germany hold the highest conversion rates; ecommerce websites in the UK have an average conversion rate of 1.88%. Sales on mobile phones are expected to overtake desktop sales by 2023; in 2018, 38% of sales were mobile. 

In 2018, the UK’s ecommerce revenue amounted to £688 billion, a strong increase in the previous year. Wholesale and manufacturing were the two best-performing sectors, generating the highest ecommerce sales throughout the year. 

Routes of entry

It is hard to compete with retail giant Amazon who not only offer next day delivery but also have competitively priced products, a customer support team and a wealth of consumer reviews to help shoppers make informed purchases.  

As the saying goes, if you can’t beat them, join them! In addition to your self-hosted ecommerce website, try selling your products on Amazon and eBay too. You will have to pay a fee to the host website, but it could help you entice more customers.

ecommerce

You will need to choose an ecommerce platform, such as Shopify, Squarespace or Wix. Spend time researching which platform you find the most user-friendly and determine which ecommerce functionalities you want to include on your website.

The ecommerce market is ever-expanding, and websites are forecast to account for 53% of retail sales in 10 years, up from about a fifth at present. This growth may be even quicker, as more people were forced to shop online through the lockdown.  

Create a seamless shopping experience for your visitors to encourage them to make a purchase. If you don’t have the necessary tech skills to develop your website, consider attending a training course or hire a web designer to make it look professional. 

You need to have active and engaging Instagram and Facebook posts; social media is seen as the most likely channel to boost ecommerce sales. Make sure you interact with followers and be unique, interesting and include visually stimulating imagery.  

Perks of an online business

You will have a wealth of data at your fingertips such as how many visitors you are getting to your site, their browsing patterns, an insight into key customer groups, etc. Study this data so you can tailor your products and services to maximise revenue.

ecommerce

You can attract a broader customer base when you’re selling online compared to a bricks and mortar business. Improve your customer retention by learning more about their purchase history and customize your marketing campaigns to encourage repeat business. 

Acquiring customer email addresses is a big perk for any ecommerce business, as it means you can keep in contact with your previous customers and build a marketing database. You can also send offers, discount codes and promotions to your regulars.

A big perk of owning a web business is the convenience of being able to work from anywhere; setting up a home office will suit entrepreneurs with family commitments. Plus, your overheads will be considerably less than if you were renting or buying a premise.



Krystena Griffin

About the author

Krystena Griffin writes for all titles in the Dynamis stable including BusinessesForSale.com, FranchiseSales.com and PropertySales.com as well as other industry publications.

@Be_TheBoss

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