When you read the following list of advantages of ecommerce for businesses and customers, you will get the sense that ecommerce is the holy grail of retail. To see the other side of the coin, do not miss out on my article about the disadvantages of ecommerce
1. Overcome Geographical Limitations
Yagi Studio/Taxi Japan/Getty Images
If you have a physical store, you are limited by the geographical area that you can service. With an ecommerce website, the whole world is your playground. Additionally, the advent of mcommerce
, i.e., ecommerce on mobile devices, has dissolved every remaining limitation of geography.
2. Gain New Customers With Search Engine VisibilityPhysical retail is driven by branding and relationships. In addition to these two drivers, online retail is also driven by traffic from search engines. It is not unusual for customers to follow a link in search engine results, and land up on an ecommerce website that they have never heard of. This additional source of traffic can be the tipping point for some ecommerce businesses.
3. Lower Costs
One of the most tangible positives of ecommerce is the lowered cost. A part of these lowered costs could be passed on to customers in the form of discounted prices. Here are some of the ways that costs can be reduced with ecommerce:
- Advertising and Marketing
Organic search engine traffic, pay-per-click, and social media traffic are some of the advertising channels that can be cost-effective.
The automation of checkout, billing, payments, inventory management, and other operational processes, lowers the number of employees required to run an ecommerce setup.
- Real Estate
This one is a no-brainer. An ecommerce merchant does not need a prominent physical location.
4. Locate the Product QuickerIt is no longer about pushing a shopping cart to the correct aisle, or scouting for the desired product. On an ecommerce website, customers can click through intuitive navigation or use a search box to immediately narrow down their product search. Some websites remember customer preferences and shopping lists to facilitate repeat purchase.
5. Eliminate Travel Time and CostIt is not unusual for customers to travel long distances to reach their preferred physical store. Ecommerce allows them to visit the same store virtually, with a few mouse clicks.
6. Provide Comparison ShoppingEcommerce facilitates comparison shopping. There are several online services that allow customers to browse multiple ecommerce merchants and find the best prices.
7. Enable Deals, Bargains, Coupons, and Group BuyingThough there are physical equivalents to deals, bargains, coupons, and group buying, online shopping makes it much more convenient. For instance if a customer has a deep discount coupon for turkey at one physical store and toilet paper at another, she may find it infeasible to avail of both discounts. But the customer could do that online with a few mouse-clicks.
8. Provide Abundant InformationThere are limitations to the amount of information that can be displayed in a physical store. It is difficult to equip employees to respond to customers who require information across product lines. Ecommerce websites can make additional information easily available to customers. Most of this information is provided by vendors, and does not cost anything to create or maintain.
9. Create Targeted CommunicationUsing the information that a customer provides in the registration form, and by placing cookies on the customer's computer, an ecommerce merchant can access a lot of information about its customers. This, in turn, can be used to communicate relevant messages. An example: If you are searching for a certain product on Amazon.com, you will automatically be shown listings of other similar products. In addition, Amazon.com may also email you about related products.
10. Remain Open All the TimeStore timings are now 24/7/365. Ecommerce websites can run all the time. From the merchant's point of view, this increases the number of orders they receive. From the customer's point of view, an "always open" store is more convenient.
11. Create Markets for Niche ProductsBuyers and sellers of niche products can find it difficult to locate each other in the physical world. Online, it is only a matter of the customer searching for the product in a search engine. One example could be purchase of obsolete parts. Instead of trashing older equipment for lack of spares, today we can locate parts online with great ease.