Creating an online ecommerce business has never been easy. It is all the more difficult with the ever-increasing competition in the ecommerce market. Like any other business, there are many factors to consider while building an ecommerce business. The earliest form of ecommerce was introduced about 40 years ago. Till date, ecommerce business has witnessed countless growth with the evolving technologies, internet, and the extensive spread of businesses. There is a 23% hike in the ecommerce sales every year. Studies prove that by the end of 2021, there will be above 2.14 billion online shoppers. In this blog, we will be discussing everything you need to know about the success rate of ecommerce business.
What is a success rate for an ecommerce business?
Before diving into ecommerce success rate, let us define success rate. The success rate of any business can be defined as the total number of successful runs in a given time. However, what determines success varies from individuals to individuals as well as companies to companies. The ecommerce market shows about 80% failure rate as per studies. The major reason that decides the success or failure of the ecommerce business is a lack of proper understanding of the market and the requirements of the target audience.
What are the key business strategies for ecommerce success?
With the right use of data, an ecommerce business owner can make informed strategic decisions to get the success rate as desired. However not all collected data are useful; some may be wrong, or some may be incomplete. Even with acquiring the right data, it can be difficult creating effective business strategies. Let us now get into some key business strategies to get success in the ecommerce business.
Focus on the conversion rate
It is studied that only 2.86% of visitors actually convert to loyal ecommerce customers. Even a slight boost in the conversion rates can significantly impact the company’s revenue. Therefore, it becomes essential to focus on the conversion rate of your ecommerce business.
Work on abandoned cart recovery
Researches show that above 69% of online shoppers leave abandoned carts in their ecommerce websites. The probable reasons can be not using the right marketing strategies or tools, not optimizing the products, or not optimizing the checkout process. If you have not worked on any of the above, it is time you start working on it. The rate of abandoned carts will eventually zero down.
Many ecommerce giants suggest that every ecommerce business must be transparent with their charges, payment mode, and shipping mode. The reason being, many online shoppers find the products they like at their affordable price range. However, while checkout, they leave an abandoned cart due to the unexpected surge in the charges. As an online seller, you must keep your shoppers well-acknowledged of the prices you are charging including the taxes and delivery charges (if any).
What are the essential ecommerce success factors?
You already know about the ecommerce giants in the market such as Amazon, Flipkart, Walmart, eBay, and so on. All these ecommerce giants have made their way out to become successful among all the rest in the market. Indeed, there are a few success factors that when considered and practised well can promise a fruitful result to any ecommerce business. Below are some of the essential ecommerce success factors:
CAC or Customer Acquisition Cost is the cost incurred to business to acquire one customer including the marketing strategies. Although you are not spending much on marketing your products or services to a new customer, every new customer has a cost. If you are spending more on acquiring a customer than earning, clearly, you are at loss. However, if your CAC is low, you are already succeeding. Every ecommerce business aims for keeping the CAC as low as possible. Now, how low it should be, depends on your business margin, your competitors, and your company’s lifetime value.
Significant gross margins
As an ecommerce business, a healthy gross margin can help smooth the business to a greater extent. If you have considerable gross margins, you are keeping rooms for better possibilities, investments, and improved customer acquisition. When summing up all the costs incurred to your business, the overall charge must be kept as low as possible. It is vital to reduce the investment charge for any business. You can experiment with your product pricing by including highly-priced products with some really cheap ones. This can help you create a significant gross margin.
Personalized buying options
Another important factor in determining the success rate in the highly digital world is personalized buying options. It has the potential to boost your ecommerce success rate twice as compared to the traditional buying options. Studies show that more than 64% of the online population looks for personalized buying options. Localization is the best way to personalize buying options to satisfy your customers. Know your customer behaviour and offer them what they need before they look for it. This can significantly impact your success rate.
Multiple payment gateways
Different locations support different payment gateways or payment methods. If you are an online seller, you are aware the world is your audience and so should be your payment modes. Every online shopper, irrespective of their location, must be able to purchase products from your ecommerce website. Therefore, introducing multiple payment methods can boost your success rate significantly.
Quick checkout procedure
As mentioned above, along with optimizing your website, products, and categories, it is more than essential to optimize your website’s checkout procedure. Surveys show that online shoppers often leave their carts abandoned due to the complexity n the checkout process. If customers are leaving abandoned carts, you are failing in your ecommerce business even if you have put all your efforts in preparing your website. As online sellers, customer satisfaction must be of prime importance and therefore, it comes without saying, you must optimize your checkout procedure. The faster your checkout process is, the speedier they are coming back to purchase from your ecommerce website.
Now, you are well aware of what success rate of ecommerce business is, what the strategies to become successful are, and what factors are to be considered for it. Keeping an eye on these factors and practicing these strategies can help you know your ecommerce business health in the market and help you make necessary improvements if needed.