In 2010, the ecommerce industry in the UK was worth £60bn; fast-forward to 2016 and its value has more than doubled to £133bn. Turn to the high street and there have been contrasting changes, with 14-15 physical stores closing a day.
As our consumer culture is firmly locked into anywhere-anytime purchasing, it’s important to examine why businesses are solely turning to ecommerce rather than the available physical stores of bricks and mortar.
While the growth of the ecommerce industry has swept the nation, many SMEs prefer to take an online-only method to their commerce. A simple benefit, such as access to the wider market attracts many small businesses that opt for an online-only approach.
Russell Godfrey, head of marketing at BLOC Eyewear furthers this, by outlining how methods of online marketing have helped them understand previously inaccessible customers. “BLOC products have been ordered from all corners of the world including Hawaii, Israel, and most commonly Australia,” he said.
“We eventually start to see trends appearing out of each country, thus shaping our international strategy”.
In using online services to widen the net, the potential for profitable growth has significantly increased for BLOC, whilst an insight into their customers desires and needs have been acquired.
Additionally, the 24/7 online consumer culture has undoubtedly contributed to businesses deciding to solely trade online. Andrew James an ecommerce kitchen and homeware brand based in Durham, states that a significant proportion of its sales occur after 5pm on weekdays.
Despite, some physical stores extending hours beyond the normalised 9am-6pm, the majority of bricks and mortar shops have limited trading hours, thus hindering potential economic profitability. Combine this notion with the 41m 16-75 year olds owning a smart device, companies like Jules B have witnessed the changes in convenience of people’s online shopping habits.
“With tools such as Google shopping and affiliate channels like Amazon, online shoppers are simply comparing the price of products, with them buying from the cheapest or most trusted brand”, said Emma Burke, online editor.
One of the most obvious and arguably significant reasons behind conducting business online is the reduction of financial overheads. Daniel Footwear’s head of ecommerce Mark Buxton recognises the little economic costs in relation to staff of running their website.
“We have a small team of dedicated staff that run the website day in day out. Although our 19 physical stores provide a significant amount of our revenue, it takes significantly more staff to keep these going, plus the property costs that they encompass,” he said.
Although at first glance it appears that ecommerce stores come at barely any stringent costs, there is a need to consider the additional expenditure of warehouse and delivery fees related to an online store.
Despite it seeming to be plain sailing for those with an online store, Google’s monopolisation of the online marketplace has resulted in an extreme competitiveness within the ecommerce industry. It’s essential that businesses place a heavy importance into their on-site digital marketing components such as SEO and PPC.
Phil Harrison of Westbrook Cycles knows how significant SEO is in today’s ecommerce climate. “With the large amount of cycle shops out there we know we have to appear as high up the search engines as we possibly can,” he detailed.
“Optimising our website has certainly benefitted our website, particularly in comparison to other retailers our size.”
For those less technologically savvy, this may be challenging with the more traditional face-to-face selling proving to be much easier to master.
Overall consumer-facing businesses need to modernise to remain competitive in this cutthroat retail milieu. Although physical stores still hold a strong relevance on the high street, the need to trade effectively online has never been more important.
Businesses that have opted for an omni-channel approach, must strike an economic and physical efficiency based equilibrium, whilst those who look to conduct business online, can focus more scrupulously on directing people to their site.
Seb Burchell is outreach executive at Visualsoft