E-Commerce Business Simplified – A Definitive Guide
E-commerce businesses have taken the business world by storm. Nobody can undermine the importance of online buying and selling when it has a prediction to garner a surprisingly high sales volume of $4.3 trillion in 2020.
So, with the ever-changing technology and business trends, e-commerce is going to be the next big thing. The competition is crazy, with the world having over 2 billion digital buyers. Among these buyers, 51% are making purchases on their smartphones.
So, a quick general question here: Is it a good idea not to adopt e-commerce?
For some, it might depend. However, if you have a product to sell that you could just as well showcase online, the simplest and most accurate answer would be a big *NO*.
So, what we intend to do here is to introduce you to the nitty-gritty of e-commerce today. That would include (but won’t be limited to) the following:
- What is e-commerce?
- How does it work?
- How can it benefit a common man or even a business person?
- What are the best practices for handling an e-commerce business?
Without further ado, let’s see what we are offering.
Not that you don’t know what e-commerce is, but a refresher never hurts.
According to Shopify, ‘E-commerce or electronic commerce is the buying and selling of goods/services achieved through the internet.‘
So, in a nutshell, E-commerce covers online transactions that involve buying and selling.
Here’s an important point to understand:
The term is different from E-business because e-business covers all aspects of operating an online business, not only the transactions.
For those of you, even with the slightest business understanding, the 4 divisions of e-commerce won’t be alien. But let’s just revisit the categorization as well.
What are the four main types of e-business models – is our next question.
1. Business To Consumer (B2C): These are the online transactions that involve buying and selling from firms to consumers.
For example, You see a website with a product category of leather jackets. You order one for yourself. It is a B2C transaction in its simplest form.
2. Business To Business (B2B): These transactions occur through the internet, where a firm sells something to another firm.
For example, a retailer buys toys from an online wholesale business.
3. Consumer To Business (C2B): These transactions involve online service/product provision from consumer to a firm.
Take the example of an influencer who promotes a business’s offering on their social media accounts.
4. Consumer To Consumer (C2C): These transactions occur when a consumer buys something online from another consumer.
For example, eBay is an e-commerce platform where consumers list their products for other consumers, and an e-commerce transaction occurs successfully.
Now, let’s head back to our original topic and learn more about e-commerce.
The Ecommerce Process Flow
To better understand how e-commerce works, here is a detailed discussion of an e-commerce process flow.
An e-commerce transaction has three levels:
- The order placement
- Order processing
- And order shipping.
However, it is not as simple as it looks. There are multiple tiers in between each of these three simple levels.
Once an order gets placed on an e-store, the authenticity of the order is gauged.
If an order is genuine and credible, the order processing on the website starts. The order gets confirmed through calls in some cases, emails, and text messages in others.
The next step comprises the order processing at the backend (the warehouse).
If everything goes smoothly, the business conducts the final step of the shipment.
Now, it is vital to understand that the whole process is actually not a piece of cake, as it might appear to a buyer. There can be various hitches during the process. However, a satisfied customer is (as it should be) the priority of each business. Therefore, a hassle-free e-commerce process remains the cherished goal of a firm.
Now that we have covered the basic structure of e-commerce, another question arises here:
Why has e-commerce been such a thriving phenomenon when there were traditional ways of buying and selling present in the world? Did the conventional means not suffice business needs and sales objectives? Or is it the craving for more that brought about the need for e-commerce marketing and selling?
That is all the topic for the next section:
Online Shopping Vs. In-store Shopping
While the e-commerce stats are jaw-dropping, it still accounts only for 10% of total retail sales in the US.
I might look like I am changing my path of convincing you for online shopping being better; I am not! The fact is that there’s a lot of potential in the market. The truth never hides.
90% of the retail market can still convert to an online market. That’s the potential we marketers see online. The question, however, is – why should a business do it?
There are more than one reasons for it, and I’ll shed some light on each:
Why must a retail business go online as an e-commerce business? The Pros of E-commerce stores.
Because online stores:
- Save the time of both the business and the consumer.
- Involve less cost than the brick and mortar stores.
- Reach beyond borders through well organized online presence.
- Provide the convenience of shopping from home to the consumer.
But, as a rule of thumb, nothing in this world is completely good (or bad, for that matter). These are the advantages of e-commerce over in-store shopping, but there are downsides as well.
The Cons of E-commerce stores.
- Lack of tangibility.
- Returns and exchange can be tiresome.
- Shipping costs can be higher than the price of going to a store.
- Shipping costs for some of the low-cost products are actually not justifiable for both the business and consumers.
So, while the pros of e-commerce establish it as the preferred mode of business compared to the traditional sales model, the cons might point otherwise. However, when you draw a comparison, figuring out what holds more weight would help you make the right decision.
Now that we have seen the e-commerce fundamentals, we will now dive deeper into how e-commerce websites work.
The next section will be a technical discussion aimed at the business owners to improve their e-stores. So, hang in there, pals!
E-Commerce Website Checklist: What Must An E-Commerce Website Have?
Before we head to the checklist, can you define an e-store?
An e-store is a place where you see, like, and order a product and where the e-commerce transaction occurs.
The next important question: What should an e-commerce store look like?
Let’s make an analogy here:
An e-commerce website is the equivalent of a brick and mortar store in the virtual world of the internet.
Now think about it:
You are roaming around in a market. You might have a complete shopping list in hand, your cell phone, or on your mind, or you might just be window-shopping. There comes a huge departmental store you decide to enter. Gosh! It does not have a precise aisle spacing. Looking for what you need (or do not need) is going to be a difficult job here. The products are hard to find.
You keep on roaming here and there, but you face trouble getting the desired items.
What would be your immediate response?
You exit the store almost right away.
Will you go to the store again?
The same is the case with an unorganized e-commerce architecture of your website. It can get frustrating if it is complicated for a visitor.
In this section, we will see some web designing tips that go well with e-commerce website architecture.
Here we go:
1. A User-Friendly E-Commerce Website Structure To Ensure Increased Dwell Time:
Website architecture has two dimensions. They are crucial for any type of website architecture, but for e-commerce website architecture, both of them should be handled with precision to ensure dwell time that leads to sales. The two of them are:
- Information architecture – It is the layout of content on a website that leads to easy navigation.
- Technical architecture – It is the functional architecture of a website that creates a hierarchy of product categories.
Both of these dimensions are handled by technical staff. So make sure you hire great minds to get your customers hooked.
2. Creating Visual Content That Can Help The Visitor Better Understand The Product(s):
Gone are the days of product listing page designs with single image and bullet point descriptions.
The digital customer is getting smart. You are not his only option. Therefore, he demands more from each one of you. He demands visually appealing content through which he can gain the imaginary experience of the product sitting at home. He doesn’t have time or the stamina to go from site to site or back to Google to understand a product or service better. Therefore, he’d like to have all the possible information right on your website.
To keep a visitor hooked, make sure that the product category page has it all arranged simplistically with product photographs from every possible angle. A 3D image is another option customers appreciate. Videos are yet another way to offer an e-commerce product to the visitor. Small review clips or a product guide can help the user to understand the product better.
3. Forming An E-Commerce Homepage That Resonates With The Customers:
A homepage is the backbone of an e-commerce website. It needs to be visually appealing, as well as valuable to the visitor.
According to a study at Sweor, a visitor makes the first impression of a website only in 2.6 seconds.
A fun fact here is that the user doesn’t see the whole webpage to make an impression, but only a particular area on the page catches his attention. My guess would be the area above the fold – something he gets to see first.
E-commerce Homepage Best Practices:
There are many ways to keep an e-commerce homepage relevant for the visitor. Let’s look at a few best practices:
- A short and concise call-to-action would get better attention and would make the visitor want to take your desired action.
- Designing a homepage that links well to all the product categories helps increase the number of conversions.
- Leaving enough white space leaves a pleasant impact on the eyes. They also help improve the readability and understanding of the product/service.
- Animated top bars, slide shows above the fold, and pop-ups would get better traction.
- You should clearly establish your value proposition and mention the benefits that the users would experience from your product or service.
- A few general reviews about the overall business on the homepage would make for great convincing content.
Remember, when it comes to designing, the latest trend and the point to remember is *Less is more*.
4. Detail Orientation In Creating Product Categories On The Website:
Everyone visiting your website might not bump into the homepage. Therefore, the E-commerce product category page design is as vital as a homepage.
Make sure to have a well-organized product category page. It should not confuse the visitor while navigating.
The categories and sub-categories should be well defined so as not to frustrate the visitor. The breadcrumbs should be able to make a visitor’s current position clear. Nobody likes to get lost in a maze.
Now that we have seen the website areas that need attention, we will move forward to the next part. Let’s talk about e-commerce strategies now.
7 E-Commerce Strategies That Lead To Better Sales
If you are already working with or towards creating an e-commerce store, you must have an e-commerce business model in place. I know you have worked hard for the implementation of an e-commerce business plan. There’s blood, and then there’s sweat involved in the process to get there, and you did not hesitate to shed any. So, how come you are still stuck?
Your website is under-performing. You have no clue what might be wrong or how to get around it.
So, what to do?
We’d say adapt some current e-commerce strategies.
You can set the e-commerce giant Amazon as a benchmark of the e-commerce strategy you pick or a local e-commerce strategy that works for you.
Let’s see what we have up our sleeves to offer.
1. Market Your Website Through User-Generated Content
Word of mouth is a critical element in achieving brand awareness. According to a stat, 92% of the people believe in the suggestions provided by their friends and family.
With rapid technological advancements, WOM has also changed shape. Companies strive to gather reviews from their customers and make them public on their website. 90% of the consumers read an online review before visiting a business.
What purpose does it serve?
Well, reviews, either written or visual, create a sense of credibility towards the brand.
Feedback drives growth, and it must be a part of your e-commerce business strategy.
2. Adapt A Thorough Social Media Presence By Taking Up An Integrated Approach
Social media is a hard fact of this world. Ignoring its importance can lead you to face serious repercussions. Social media giants such as Facebook, Instagram, and Twitter should be your focus to reach customers with massive customer bases.
You can use the advertising tools available on these platforms. E-commerce social media marketing is a trending phenomenon that includes many ways to enhance the business.
Social media influencers are also a great way to reach your target customers.
Targeted social media campaigns such as e-commerce video marketing can open up new avenues for your e-commerce marketing plan.
3. Take Advertising Seriously
No matter how much you dislike spending on advertising, a well-crafted advertising plan does work wonders for meeting your e-commerce goals. Why am I making this statement? Because stats say so.
According to eMarketer, the worldwide digital ad expenditure will be 375$ billion in 2021.
Taking the facts into consideration, businesses must take advertising seriously as a part of their e-commerce business strategy. Or they should prepare for their doomsday right ahead.
4. Implement Product Filtering Options On Your Website To Give A Better User Experience
When you provide the option of filtered searches to the users, you allow them to customize their search.
Well, that’s the kind of pampering visitors are usually looking for. Isn’t it better to get a targeted search result rather than skimming through irrelevant product categories?
Demographic filters can be a game-changer for your e-store. Compare it to a brick and mortar store.
Suppose you own a bakery where a customer enters and asks you for a cake that can have either buttercream frosting or a chocolate ganache frosting. It can have either a vanilla sponge or a chocolate sponge.
He doesn’t give you a pinpointed taste preference.
Now put the customer at your place. Think in terms of him visiting a website that offers too many options from which he can choose.
Filters make choosing easy. So, implementing them is a great e-commerce strategy.
5. Make Sure That Your Website Doesn’t Take Ages To Load
Website loading speed is a factor that clearly goes unnoticed by many e-store owners.
But, this is how it must not be.
Why? Because a 3-second delay in a page loading time – when your website loads in 5 seconds instead of 2 seconds – increases the bounce rate by 29%.
The web page speed optimization is a technical phenomenon, but it is crucial for e-commerce website optimization.
It may require you to hire an e-commerce optimization expert. But trust me, it will have a positive impact on the performance of your e-store.
6. Build An Efficient Email Marketing System That Continuously Works To Reach Potential Clients
E-commerce email marketing automation is a must-have system upgrade when you’re operating in a highly competitive virtual space. According to research, targeted email marketing campaigns can increase revenues as high as 760%.
Now, this is what you’d call a mind-boggling increase indeed.
Automated email marketing systems enable businesses to target their customers through drip campaigns. They can schedule the emails and have a broadcasting pattern whenever there’s a need for an email marketing campaign.
7. Keep Testing Your Website Performance
This one is the last e-commerce business strategy, but it is the most important one on the list.
All the efforts to achieve a thriving e-commerce platform can go in vain if the performance is not quantified timely.
Therefore, all your campaigns should be tested time and again for their efficiency. If a certain approach doesn’t suit your e-commerce business, leave it and adopt another one.
E-commerce digital marketing requires continuous trial and error. One sock fitting all is too old-fashioned even in the real world. There’s not a single fit-for-everyone approach while running an e-commerce platform. So, keep trying – testing, analyzing, optimizing, repeating – until you achieve your goals.
There is no set pattern to any of these categories, and you may suit your business needs. However, rest assured, not implementing is your loss, and implementing is a significant gain.
Talking of gain, let’s move to what else offers gains:
E-commerce Site SEO
Search engine optimization of an e-commerce business is as important as is that for any other business. Let’s discuss some crucial aspects of SEO of an E-commerce store:
But before we get into SEO, you must understand some important KPIs. KPIs direct the route of a process. Let’s begin the discussion with e-commerce KPIs.
6 Most Important E-Commerce KPIs
KPIs or key performance indicators help gauge the success rate of your strategy and business. They are quantifiable metrics that can actually be a combination of more than one metric. Here’s are what marketers refer to as the most critical KPIs for an e-commerce store:
1. Cart abandonment rate
Cart abandonment rate is the percentage of people who have added a product/s to their cart to those who have not continued purchasing.
Keeping a check on your cart abandonment ratio helps track if something is not right, leading to increased abandonment of a particular product. This also helps retarget people that have shown interest in your product but haven’t purchased it.
2. Cost per customer acquisition
Customer acquisition cost is the cost you have to spend to get a customer. You calculate this cost by dividing your total ad spend by the number of acquired customers using that spend.
This is an important KPI as it helps you set a reasonable customer acquisition target based on your available financial resources.
3. Conversion rate
Conversion rate is the ratio of people converting for a process by the total number of people showing interest in that process. For instance, your new product’s conversion rate would be the number of visitors that have purchased that product by the total number of people on that product page.
Conversion rate is amongst the most critical KPIs in e-commerce as it helps determine your product’s conversion success. Based on this value, you can optimize your process for improved results.
4. Return on Ad spend
Return on Ad Spend or ROAS is the amount you earn as revenue from investing each dollar on your ads. As an important KPI, ROAS determines your overall profit rates; therefore, it holds a prestigious position in metrics useful in e-commerce.
5. Average order value
AOV or average order value is the average revenue worth of each order. Since each customer would spend a different amount on your site, AOV is calculated by dividing the total revenue by all your customers by the total number of customers.
6. Customer lifetime value
Each customer places an order of different worth. Some customers purchase more often than others. The more a customer spends on your e-commerce site, the more his purchases contribute to the profits, and the more becomes his worth for your business – aka his lifetime value.
Keeping an accurate track of this metric would help you understand your investments’ success rate and the retention rate of your clients as well.
5 Best E-commerce SEO Tips To Increase Organic Traffic
Search engine optimization remains the core goal of any website. Search engine optimization is the ability of a website to rank higher on a SERP organically. So, ranking well organically is an SEO objective that also drives relevant, high-quality traffic to your e-commerce site.
SEO is divided into three main types that are:
- On-page SEO- Optimization of individual web pages to get organic traffic.
- Off-page SEO- The optimization of internal and external links of a website.
- Technical SEO- Technical SEO is the optimization of your website for crawling and indexing in the search engine.
We will discuss a mix of all the types of SEO techniques mentioned above for a successful e-commerce business.
Let’s get started with our E-commerce SEO checklist:
1. Searching E-Commerce Keywords That Can Drive Traffic
Keywords are the lifeblood of all the content for an e-commerce website. Highly competitive keywords are hard to rank for, but a strong e-commerce content strategy can solve this problem.
Even for e-commerce websites, keyword stuffing is not a good idea.
There are many paid and unpaid keyword research tools available that can lead you to craft your e-commerce content better.
2. Using The Keywords In An Optimized Manner To Rank Better On SERP.
There’s a science behind using keywords. You cannot just throw them in your content here and there. Primary keywords are sensitive and should preferably be used in:
- The topic/title
- Your first hundred words
- The meta-description
- Your H1 tags
- Alt-texts of the images used
- Subsequent H2, H3 tags
- The last hundred words.
Using the primary keyword in this manner increases a web page’s visibility on the SERP. However, the point to keep in mind here is not to force keywords on your visitors. Even following the placement strategy should be natural.
3. Optimizing The Website For Mobile Users
The best SEO approach is to develop a mobile e-commerce app that resolves the problem of a mobile-friendly user interface. However, a mobile app can be expensive.
So, what you need to do is to check your website for mobile-friendliness and loading speed.
Google provides tools for checking your website’s ease of use on mobiles.
4. Creating Unique Meta-Descriptions For All The Web Pages
Meta-descriptions are a 50-160 character long summary of what the webpage contains. It should be precise and optimized for the keywords you are targeting for the web page.
To get each page better visible on SERPs, make individual meta-descriptions for all the web pages.
5. Optimizing The URLs For Relevant Keywords
The URL of your web pages should contain the targeted keywords. SEO experts prefer not to use capitalized letters in the URLs. The pop-ups should also be optimized for the mobile interface of a website.
Now we will discuss some paid and free SEO tools that work wonders for e-commerce websites.
Free SEO Tools:
Google Analytics’ free version for small and medium businesses gives insights about the visitors of the website. You can track the number of visitors and their activity on the website through Google analytics.
Google Search Console
It is a free tool that monitors, maintains, and troubleshoots a site’s presence. It is basically a service that gives insights about how your website is doing in the Google crawlers.
Google Adwords Keyword Planner
It is a free tool that helps in researching keywords for your website.
Google Pagespeed Insights
As the name suggests, it is a tool that gives insights about the loading speed of a web page.
Paid SEO Tools:
Moz is an SEO tool that can give valuable insights regarding the digital marketing campaigns of your website.
SemRush is known for competitor profiling it does. It gives exact figures about how many websites are competing for similar keywords. These insights can lead you to craft your SEO strategy better.
Ahrefs helps find out content ideas and the competitive position of your website through different metrics.
If you want to dig deeper into Free and paid SEO tools, we have more to guide you:
So, here’s what we have learned today:
- What is an e-commerce business, and what is e-business?
- E-commerce process workflow, and the goals and the challenges of this workflow.
- A comparison between online and traditional shopping with the pros and cons of e-commerce
- A checklist of the top 5 factors an e-commerce website must possess.
- 7 strategies for improving sales of your e-commerce store.
- The most important KPIs e-commerce business owners track
- SEO tips for e-commerce stores to increase web traffic.
- Free and paid SEO tools to optimize your e-commerce store’s performance.
And that’s all for today.
So, what’s next?
Running an e-commerce business can be a painstaking task, but you can perform it viably with attention to details.
Conceiving an e-commerce business plan is one thing but making it operational is another. The e-commerce strategies can prove to be very challenging and tough to manage at times. However, there are examples of e-commerce businesses from around the Globe such as Amazon, WooCommerce, eBay, Alibaba, etc. that can be used as a benchmark for adopting e-commerce practices that ensure success.
So, if you’re already running an e-commerce business, just hang in there.
Keep updating your website for the new trends and keep in the race.
Meanwhile, are you looking for an eCommerce SEO company or other services of an e-commerce agency?
Feel free to reach out to Canz Marketing – a predominantly E-commerce marketing and development company. Our experts are actively indulged in various e-commerce services, ranging from eCommerce website development, SEO, marketing, and optimization. We are the certified best e-commerce SEO company that provides FREE e-commerce consulting and FREE eCommerce SEO audit.