Ecommerce penetration is growing progressively and at an ever increasing pace. More than 85% of the world’s population with access to the internet is already shopping online. The average global spending amounts to as much as 22% of disposable income across the board. B2C ecommerce sales in the United States alone totaled a record $304.19 billion in 2014, a year over year increase of 15.4%. Although the figures for 2015 aren’t in yet, there is more than a good chance that the trend has continued and will see us through this year as well.
Consumer insight has been the buzzword since big data made a big splash back in 2007. Today, consumer insight means everything from purchasing habits, trends, consumer response to marketing campaigns and the whole 9 yards. Consumer insight can therefore be best described as an ongoing case study of how your customers respond to you and vice versa.
Business intelligence and how we understand what we need to deliver has come a long way since the early days of ecommerce. Gone are the days when predicting customer behavior was all about taking random stabs in the dark, trying to figure out the next trend. What we had back then can only be described as a mostly inefficient ecommerce machinery at best. Fast forward half a decade and we are well into an age where data driven decisions are valued above all else. The fundamental tendency of data being more accurate than human intuition in a wide variety of situations is what makes data driven decisions the better option on the table. As far as ecommerce is concerned, big data is not just a buzzword that we need to take a passive glance at. Given how every soul across sectors have been touting it as the ultimate tool to drive growth, we should do well to take a closer look at it and what it can do for ecommerce.
Ecommerce is not just about receiving orders online and fulfilling them. From procurement, order management to logistic chains – the number of moving parts involved is staggering to say the least. Over and above, ecommerce is at its very heart, a business all about taking orders from a customer and sending them the product(s) they need and want. For the seller, that process begins even before the customer places an order with him. It begins with a strategic analysis of market trends, carefully figuring out what the customer base would be looking for in the coming days, procuring the goods and maintaining an inventory which can cover the orders when they do begin to come in.
In the previous article we talked about how some factors such as development and deployment timelines, budget and competition affect both standalone web stores and multi vendor marketplaces. We saw that although web stores offer an unparallel degree of control over how you manage your ecommerce business, it fails to provide you the ease of operation marketplaces can. On one hand, you can customize your own store to any extent you wish with a library of developer supported plug-ins, a multi vendor marketplace takes the pain of micromanagement away and leaves you free to concentrate on selling your products which is the whole point of an ecommerce business. However, the differences don’t end at that as there are 3 other major points we must discuss before you can declare yourself reasonably well informed enough to choose which path to follow on the way to set up your online venture.
Now we have read enough trade articles, news reports and marketing blogs to know that millennials are THE market segment that any B2C venture should be targeting right now. I have to agree with each and every one of them too. The numbers say it all. They are larger than the Baby Boomer generation – one of the most economically prolific segments in history, and at least three times larger than Generation X. Add to that the fact that the average millennial’s purchasing power which totals to $1.3 trillion annually far exceeds that of the preceding Generation Y which capped out at a nominal $600 billion per annum.
According to a report by Internetretailer.com, online marketplaces are set to grow at a rate of 25% worldwide in 2015. Consumer seems to be increasingly migrating towards online marketplaces and as far as the current trends are concerned 38% of online shoppers in the US began their product searches on Amazon compared to 11% through search engines like Google. Another interesting piece of information is that 90% of online sellers in the US and UK sell through online marketplaces like Amazon. However, building a marketplace is no easy task. There are certain things you have to keep in mind before you leap into such a highly competitive environment. To say the least, it’s a minefield and it’d be a good idea to step lightly and avoid getting blown up.
When we were working on building our service end site DualCube, we had a really small team with only 3 or 4 people working on and off on building the site between working on client projects. After the job was done, it of course fell on me to maintain the site along with all the peripheral work like moderation and optimization. All things being equal, site load speeds are very important when it comes to retaining visitors and reducing bounce rates. As such, I used to spend a lot of time working on that and then, one fine morning, I made the terrible mistake of deleting a key database while trying to clean up some unused tables. In one fell swoop, months of work disappeared without a trace. Try as I may, I was only able to recover 35% of the lost data from our archives. As is the case with most grievous mistakes, it turned out to be a lesson in disguise which taught me much about data backup and plug-ins for WordPress which could do that for me.