Since its introduction into the ever-growing internet, e-commerce has been affecting the way businesses operate since day one. In recent years, online shopping has exploded, with about 79% of consumers in the U.S. shopping online in 2017. But this modern innovation may be having many effects, both direct and indirect, on the way companies are forced to do business today.
The Amazon Effect
Selling products online isn’t exactly new nowadays; since the internet was first created, people have been using it to advance their business interests. Small businesses using online sales have been able to reach more people than ever, giving them the opportunity to grow. However, this has not been without its challenges. E-commerce giant Amazon has complicated operations for small businesses by setting an expectation among consumers that many small businesses cannot compete with. Amazon, and its many international counterparts like Alibaba and Lazada, deliver within a matter of days of receiving an order, even occasionally being able to provide same-day delivery. Many smaller companies struggle to match this turn-around time, causing consumers to be driven away from them and towards these larger companies.
E-commerce and the changing expectations surrounding online shopping have been impacting nearly every industry selling online. While many people still see the benefits of shopping in person, such as being able to try on clothing before buying, products that don’t require shopping in-person are seeing significant reductions in in-store sales. For example, only 3.1% of skateboard sales occur in sporting goods stores nowadays, with many of the hobby’s enthusiasts purchasing boards online. For classic brick-and-mortar stores, this can lead to financial trouble fairly quickly.
Not Just For-Profit
E-commerce and digital purchases haven’t just affected the for-profit world; charitable giving and non-profit organizations have also been seeing massive shifts. People are donating in far different ways today than they historically have due to the creation and popularization of crowdfunding, a type of fundraising that exists almost exclusively online. Being able to donate more easily has changed the way people give; 17% of crowdfunding donations are made on mobile devices, showing that a significant amount of people are more willing to donate if they’re able to do so quickly while on the go.
How To Thrive In An Online World
As e-commerce continues to grow and change, many small businesses and organizations will struggle under the expectations set by corporate giants. In order to compete in a market where consumers expect as much as same-day turn-around and delivery times, businesses will need to work even harder to stay afloat and speed up operations. For businesses that can handle the additional workload and associated expenses, expanding to sell to multiple countries may afford some companies an opportunity to succeed.
However, small businesses may have some certain advantages over larger companies; local companies and family-owned businesses have a personal connection that many major online retailers don’t have. For businesses looking to take advantage of this, promotional events can do a lot for your brand awareness. Approximately 79% of consumers researched a brand after receiving a promotional product. Focusing on having a personal presence can give your company a local edge that fosters brand loyalty and customer retention.
E-commerce and the pressure of online retail can cause many businesses significant problems, despite the technological advancements that make selling to more people possible. As the internet continues to grow and foster new types of customer interaction, it remains to be seen just how businesses will be affected in the years to come.