What’s the new normal for commerce?
A few years ago, it was predicted that e-commerce would overtake the traditional business over time, but no one could have predicted that this change would come very soon. The worldwide pandemic has caused this change mainly out of necessity when consumers are stuck inside their homes and have no choice but to rely on digital and online services for their basic needs and even more.
Despite the economic struggle that everybody has faced, people have consumed and purchased more compared to pre-pandemic. The convenience and accessibility of stores online made purchases quick and easy despite many restrictions. Aside from fulfilling their basic needs, consumers turn to online shopping to cure their boredom inside their homes. In fact, according to a survey conducted by PYMENTS, 36% of U.S. consumers are now buying retail goods online.
Because of this change in consumer behavior, businesses shifted their focus on online platforms and exerted more of their marketing and advertising budget towards online ads and creating websites to provide what their customers need. Aside from that, physical stores have to close down because of a decrease in foot traffic as well as government restrictions in their respective localities.
Reassessing how they conduct business concerning the current situation, businesses realize that the new normal for businesses is e-commerce.
To successfully shift to this new normal for businesses requires an understanding of the new needs of consumers which means diving into the digital or online platform. There are 4 common platforms that businesses have to jump into to keep up with the new normal for commerce:
- Advertisement
- Website
Facebook has been around for quite a long time but it has always been seen as a social media platform to connect to friends and relatives around the globe, but businesses have seen the potential of this popular social media platform to sell and advertise their products.
Because of the existing demographic within the Facebook community, it has a great potential to widen your business’s reach. Facebook also has developed plenty of tools that could help your business achieve its marketing goals.
Much like Facebook, Instagram started as a social media platform that focuses on images. Nowadays businesses have made use of Instagram as an e-commerce platform. Because of the nature of the platform that focuses on images, featuring products and services becomes easy and natural.
Instagram has also tool integrations that help businesses sell their products over the platform. Engagement and brand awareness is even made easier in this app with the help of social media influencer marketing.
Advertisement
Ads are present all over the internet and very useful for different objectives or goals. Paid adshare helps you target potential customers to warm them up and raise brand awareness, or target existing customers to encourage them to make a purchase.
Website
Having a website is very helpful for businesses that have plenty of variety of products and services. Website is a good platform to draw customers to shop and learn more about your brand. Social media pages and websites go hand in hand to present your business well to your online audiences.
How to Thrive in the New Normal
With the new normal, the expectation that has since proven true for the most part is a drastic change in the behavior of shoppers. Online sellers now have a golden opportunity to change the landscape and make a serious dent on the $5 trillion US retail industry.
Around 90% of consumers stated that their online shopping increased during the pandemic, according to Deal Aid. Therefore, it’s more important than ever for online businesses to get their act together in this new business landscape.
Here are three of the most important principles you should follow for e-commerce success:
Nurture Your Top Customers
The Pareto principle, also known as the 80/20 rule, states that 80% of results come from 20% of effort. The same can be said about business, wherein 80% of sales usually come from 20% of your customers. They’re your top customers, and you should nurture them and give them your best.
It costs five times more to attract new customers than to retain existing customers. Therefore, most of your effort should go to nurturing your top customers who give you repeat business. It’s not to say that you should stop putting money into advertising and marketing, but it shouldn’t be your biggest expense.
Take a close look at your business and find areas you can improve that will please your loyal customers. Improve your customer service, create VIP loyalty programs, give occasional discounts, and so on. You get to increase your revenue through repeat business and keep your top customers happy. They may then spread the word and refer new customers to your business.
Manage And Forecast Cash Flow
It’s now more important than ever to manage and forecast your cash flow accurately. Due to a harsh time like the COVID-19 pandemic, businesses need extra funds as a buffer in case of weak sales. They need to know when they have enough money to reinvest in the business or take out in the form of owner distribution. Even when the online retail business has been booming lately, a contingency is both necessary and prudent.
The thing with e-commerce businesses is that they can undergo periods of high growth and still go broke due to being unable to pay the bills. When you get too enthusiastic and order a lot of inventory, only to end up either selling them really slowly or barely selling at all, that can definitely make your cash flow go the other way.
Cash flow is all about timing, foresight, accurate budgeting, and anticipating money crunches. You have to be able to see what’s coming from far away in order to be able to make decisions before you’re in the thick of a crisis. Having a line of credit and an alternative source of funds can help you stem the tide of an emergency. You need to be able to make accurate forecasts of revenue and expenses, and you must be able to convert receivables into cash on demand. Also, you should possess enough capital to pay off the really big expenses, as well as order more inventory.
Cash management is a fundamental skill for any business. After all, cash is your business’ oxygen.
Ensure Smooth Deliveries
Around 80% of shoppers want more “buy online, pickup in-store” (BOPIS) services and curbside pickups. They like the option of being able to transport their purchases to maintain the physical integrity of the product. Meanwhile, 90% of shoppers prefer home delivery over visiting a store. This is according to a September 2020 survey by Manhattan Associates, which was taken in the middle of the pandemic.
Making the shipping of products as problem-free as possible is critical to achieving success as an online business. If there’s ever a poorly done delivery, 84% of shoppers have stated that they will likely not buy from that business ever again. Meanwhile, 98% of shoppers say that the delivery service impacts their brand loyalty, which lends to much of the success of big businesses like Amazon and Walmart. This is according to a 2020 study by Retail TouchPoints, also done in the midst of the pandemic.
However, that’s all a handful to deal with. All the operations, logistics, and shipping that goes into an efficient and profitable online business can get really complicated and tedious. With all the delivery delays due to restrictions resulting from the COVID-19 pandemic, focusing on making preparation and fulfillment quicker and more efficient is key to shorter turnaround times. Being able to make up time that accounts for all the time that courier companies take to do their job can help customers have to wait less.
There are now a growing number of fulfillment service providers that help businesses minimize the need for managing deliveries, which can help make more time for other aspects like marketing and sales. Dropshipping, packaging, and forwarding services can help online retailers guarantee smooth and fast delivery to customers.
