What is E-commerce?
Written by ArabyAds Content Team on March. 1st 2019
Being first introduced in 1960s, e-commerce business alludes to the activity of
purchasing and selling products and/ or services via electronic channels such as the
internet. A good example of the business can be Amazon which firstly started in 1995 as
a book shipping business in Jeff Bezos’ garage. Over the past five years, the ecommerce
realm grew rapidly with the increased availability of internet access resulting in the
advent of popular online sellers in 1990s and early 2000s. In the near future, more and
more businesses are expected to move parts of their operations onto the internet; thus,
causing the boundaries between the “traditional” and “electronic” commerce to be
increasingly blurred.

Challenges facing the e-commerce market

Being viewed as a lucrative business, the e-commerce industry is expected to have more
companies entering the field with the aim of selling the same products to the same
market. However, this does not mean that all e-commerce retailers are constantly
making money. Both small and big companies have to come across various challenges.
Developing a business in the e-commerce industry is basically the hardest part as
retailers should take care of everything starting from the web maintenance to customer
care. Below are the major challenges facing the e-commerce business in driving sales:-

1. Low conversion rate

If you aim to maximize your sales and boost your revenue, there needs to be visitors with a
notable commercial intent visiting your website. Definitely, the big web traffic you
are getting does not always indicate that you are making more money unless these
shoppers are converted into paying customers.

The so- called ecommerce conversion rate, which refers to the percentage of website
visitors who made an actual purchase activity in your online store, is basically the
most important metric retailers need to consider whilst building their ecommerce
business and increasing revenue. There are many reasons behind the low conversion
rate including the irrelevant product recommendations, annoying popups, out-of-
dated content, hidden conditions and costs, and complicated checkout process.

Keep in mind that conversion does not just happen but it needs to be constantly optimized,
and this will be surely reflected on sales turnover.

2. Lack of customer loyalty
Unlike street-shopping, ecommerce business does not involve face-to-face communication.
As a result, retailers do find a big difficulty in building a kind of trust and loyalty with
their customers as neither the buyer nor the seller can see each other while making
an online transaction. Therefore, companies are required to exert lots of efforts in
generating new customers as well as maintaining the same customers for a long

One way to gain customer loyalty is by having an excellent customer service starting from
the ordering process and ending with the shipping. Once maintained, loyalty will
result in higher profits and overall business success as the repeat customers are
often the most lucrative.

“When you treat customers right, they come back and they tell others.” – Shep Hyken

3. Attracting targeted traffic
With the rapid development of digital marketing channels, ecommerce companies can no
longer depend on one type of channels to drive traffic to their websites; instead,
they need to use various mediums including shopping engines, display ads, emails,
etc. Shortly, sellers should be always visible where their audience is paying

4. Hiring the right leaders
Retailers have their own visions and aspirations. They have messages to spread to their
customers. Therefore, having the right people to help them accomplish these
desires is the first key towards success as these leaders will be the first to
understand their companies’ visions and act accordingly. This will be consequently
reflected on their work performance as they will be able to deliver an authentic
experience to the customer; and thus more sales and profits will be generated.

Online e-commerce sales channels

The ecommerce industry is significantly growing in size and evolving as well due to the
rapid technological advancements, along with the changes in customer preferences.
Nowadays, consumers are flocking new purchasing choices such as store websites,
mobile apps, marketplaces, and social media channels. Thereby, retailers are
recommended to diversify their sales strategies by adopting a multichannel approach
through which they can offer multiple touch points to enable their customers to interact
with their products and follow up the evolving ecommerce landscape. In return,
retailers will remain competitive, generate new customers, and have more potential for
revenue growth.

Choosing the “perfect fit” for your ecommerce business

While there are many options for retailers to choose from, not every channel is a
perfect fil for every business. Each channel has its own pros and cons, which means that
you have to narrow your focus to the most ideal sense for your business and audience
as well. This basically depends on different determining factors including your business
model, brand, payment processing system, future business goals, and products. Once
considered, these points will help you carry on your business to the next level.

The most common ecommerce sales channels

In today’s e-commerce market, there are many sales channels available to sellers.
However, the most common sales channels to be considered are:-
       ● General marketplace (Amazon)
       ● Auction marketplace (eBay)
       ● Social media (Facebook, Instagram)
       ● Handmade and crafts marketplace (Etsy)
       ● Own shopping site (BigCommerce)

Influencer marketing should be your go-to ecommerce approach

With their enigmatic aura, influencers are creating a fuss in the e-commerce domain.
When you make up your mind to buy clothes, shoes, or even makeup, do you get that
impulse to the buy the product after you visit its webpage, or was it because you saw a
picture of the product posted online by an influencer you like? What’s more, today’s
consumers are less trusting to traditional marketing campaigns and more relying on
word of mouth from the people they trust when setting up their purchase decisions.
Basically, people follow influencers who share similar interests as them and love using
the same products they love. That’s why, building trust and establishing a strong
relationship with customers cannot be done apart from social media, and this is where
influencer marketing has a so powerful presence.
If you want to maximize you ecommerce sales, then you need to have an influencer to
create a content featuring your product and post reviews on it via social medial
channels such as Instagram. Remember, when choosing an influencer to promote your
business, you should always search for niche influencers who can create a content on
the niche they are interested in, so that they tend to be more authentic in delivering
their expertise to their followers.

Measuring ROI from influencer marketing campaigns

The influencer marketing industry is considered a unique beast. Though being effective,
it is one of the trickiest strategies to track, particularly if you want to measure direct
sales. Basically, marketers do see that measuring the ROI from their influencer
marketing campaigns is a bit complicated.

“Measuring success from influencer marketing is more complex than traditional
marketing initiatives. For example, with email marketing, you can track open rate,
click through rate, and disengagement rate, and then use that data to iterate for your
next email campaign. Influencer marketing metrics are a bit more nuanced.” - Magda
Houalla, Head of Campaign Strategy at AspireIQ

However, the process can be easier when done right. First, you should clearly define
your business goals, and then set your KPIs accordingly. This will enable you to measure
your campaign performance, track traffic to your ecommerce business, and measure
your sales accordingly.

It is important to keep in mind that though increasing sales is the holy grail of influencer
marketing, there is a time lag between you launching your influencer marketing
campaign and new customers actually purchasing your products. Social media helps you
build trust with customers rather than instantly generating sales. Consequently, you will
gain long lasting customers who are loyal to your business, and this will in turn augment
your profits.

To sum up
Influencer marketing is an important tactic for modern ecommerce business. As long as
people’s attention is grabbed through social media and content marketing, influencers
will be influential even more to shape the audience’s perspective regarding a certain
product or service.
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