THE IMPORTANCE OF E-COMMERCE AND HOW IT HELPED GROW SME BUSINESSES THROUGHOUT 2020 & 2021
The Covid-19 pandemic has taken a devastating toll on both peoples professional and personal lives. The effects have led to businesses having to close doors to the public, some indefinitely. The closure of retail stores such as Arcadia Group and Debenhams has truly demonstrated the harshness of the current retail climate.
Now a number of businesses across all industries are remodelling their aims and objectives to focus on selling via E-commerce Websites. An article from Statista stated that in 2020, as high as 87 percent of UK households made online purchases within the preceding 12 months – Proving how essential E-commerce really is.
As the restrictions continue into 2021, there has never been a bigger opportunity to invest in a unique website with a focused digital strategy that assures an increase in online presence and consistent quality traffic to your site. You don’t need a big high street name to be successful online, a business of any size can benefit as proven by online giants such as Boohoo and ASOS.
These online retailers have grown rapidly, alike to E-commerce. Boohoo were founded in 2006, so has been in the market for some time – however it truly took off once going public in 2014. Their low cost clothing and fast delivery transformed them into an online powerhouse. Their takeover of another online fashion retailer Pretty Little Thing in 2017 truly showcased how much impact E-commerce has.
Without having a physical store, Boohoo were able to buy all digital assets of Debenhams in 2020 as they fell into admin. Debenhams late arrival to digital party proved to be a gain for the online retailer as Boohoo’s revenue increased 44% for the year of 2020.
2020 also showed us how much we rely on E-commerce, and as we move through 2021 the memo has not changed. It not only opens up new possibilities for businesses via sales, but also enables local businesses competing in Small and Medium Enterprise markets to uprise, grow and compete against large retailers, and win. However, failure to adapt to E-commerce can prove risky and costly.
Ultimately, the UK is now the world’s third-largest e-commerce market, with nearly £200 billion in sales in 2019 as quoted by Send cloud in Jan of 2020. With Covid this figure has increased greatly. Restrictions show no signs of stores reopening soon, so E-commerce is now of paramount importance to growth and survival of not just SME businesses, but larger retailers during this pandemic.
THE EVOLUTION OF E-COMMERCE
Ecommerce is defined as, the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions. These websites have existed for some time, gaining major popularity once powerhouses such as amazon and eBay showed its full extent.
Technology has since been adapted to suit a variety of industries, proving dividends for retail, restaurants and supermarkets to name a few. Over the year’s platforms have been developed in order to coherently help business display products, monitor stock levels, account for sales and ultimately represent businesses in the best possible light online.
E-commerce is so much more than buying and selling online nowadays, it has filled the void of public shopping and become the cornerstone of 2020/21 retail. Internet retail stated that there was a 129% in online shopping of April 2020 due to Coronavirus, the largest ever recorded. By then the majority of business had already made the transition from the high street to home, whether it was restaurants becoming eligible for takeaway or retailers moving to online sales.
VARIATIONS OF E-COMMERCE
Businesses have proven that size or market share does not affect E-commerce. Businesses of all sizes can generate revenue whilst receiving a high return on investment. Devoting time in secure online platforms and a simple customer purchasing journey can really help SME businesses compete with larger online retailers.
4 leading industries thrive from E-commerce, so it is important to correctly categorise your business in a specific in industry. These include:
- Business-to-consumer – This applies for the majority of E-commerce. A business sells a product direct to customer
- Business–to-Business – One business is selling directly to another business. Suppliers supply stock for stores for example.
- Consumer-to-business – Where a person of interest or a brand ambassador promotes a product in return for financial rewards.
- Consumer-to-consumer. Users who are not a part of a company, purchasing products online and selling to each other – like eBay
COVID-19 – THE CATALYST FOR THE INEVITABLE DECLINE OF THE HIGH STREET
To blame the high street’s decline on Covid-19 would be rash. It is no secret that it has been in constant struggle and the rise of e-commerce has contributed to that. Nevertheless a variety of ongoing factors as well as coronavirus have been the main source of problems for retailers like Debenhams and Arcadia Group.
To reiterate, the pandemic did not force these businesses into administration, but was essentially the last nail in the coffin. The rise in rents for town centres, an increase in bills and the general uprise in cost for operating a business have proven catastrophic for some. Bricks and mortar retailers are now unable to compete with online bargains and are just not attracting the number of visitors needed. A statistic from Press Release said that 61% of Brits are worried the high street will disappear completely in the next ten years due to the ever increasing number of big-name store closures.
With that being said, let’s look at one of the big name brands and their fall to administration.
CASE STUDY: ADMINISTRATION FOR ARCADIA GROUP
Arcadia Group Ltd was a British multinational retailing company, consisting of brands like Topman, Topshop, British Home Stores, Dorothy Perkins to name a few. All these brands had a large presence on the high street, and on November 30, 2020, the Retail Gazette stated that Arcadia Group ultimately collapsed into administration, affecting 13,000 jobs.
Arcadia Group never kept up with competitors online, and eventually payed the price. Although Arcadia stores had websites, they never truly invested the potential of E-commerce. When stores did close – it proved too much for Arcadia Group to survive.
Ironically, an online fashion giant named Boohoo have bought Arcadia brands such as Dorothy Perkins, Wallis and Burton out of administration in a £25.2 Million deal. Boohoo has bought the brands’ e-commerce and digital assets, without having a physical store!
This truly shows the power of E-commerce in the modern day, and the result of neglecting purchasing and selling online.
E-COMMERCE AND DIGITAL MARKETING
In a digital climate as prolific as this one, competition across all industries is fierce. In order to not only survive but thrive, a digital marketing strategy is needed. An array of digital strategies gives businesses an edge over competitors.
A dedicated and keyword focused SEO (Search Engine Optimisation) plan can really affect visibility online. A mixture of both off-page and on-page optimisation is sure to improve domain authority and placement amongst local SERPs.
PPC (Pay Per Click) Campaigns are proven to be effective for promoting new sales/products once an SEO campaign starts to arise. The use of location specific adverts and relevant keywords gives users a glimpse of your business products in convenient locations.
There may not be a more useful digital marketing tool than social media. The population have been confined to their homes for the majority of 2020, so more users have flocked to social media for entertainment & engagement. Since the start of the pandemic, mobile phone usage has risen with some users reporting a 180% increase of screen time. With more viewers on screen, it is important that businesses take advantage of this and post, share and display relevant content – to stay in touch with customers during the pandemic.
E-COMMERCE WEBSITE SOLUTIONS IN 2021
2021 looks to be another year of uncertainty for retailers, but one thing everybody knows for certain:
E-commerce is only growing in the future.
Local business owners are remaining operational this way. More businesses continue to utilise these websites fully and can start to benefit during the disastrous pandemic. Search4Local specialise in E-commerce website solutions, proven to reflect your business unique design and personality whilst building your digital presence . Contact 01792 732159 or firstname.lastname@example.org to start your digital success today.