E-commerce is growing at an exponential rate. According to recent eMarketer research, online retail sales will reach nearly $2.5 trillion by 2018, which highlights the need for businesses to partner with a trusted payment processor and start an online operation if they haven’t already.
By the end of 2015, eMarketer forecasts e-commerce sales to reach more than $1.5 trillion, slowly increasing its share of total retail sales worldwide. Online business owners have a large opportunity to make money given the recent and massive market growth, but to do so, they must first understand how to drive e-commerce transactions.
What drives online purchases?
Driving e-commerce sales is key to the long-term success of any online business. Understanding what consumers want and how to cater to those needs is a great way to improve both retention and acquisition. Certainly, the way a business markets itself and engages with consumers helps add to the bottom line, but Practical Ecommerce provides four other drivers of online sales:
- Website traffic: Taking traffic and converting users requires a dedicated effort toward engagement and interaction. While traffic is a good metric to measure, business owners need to determine the best way to keep visitors coming back and entice them to buy once they’re at the website.
- Competition: Any business is going to have competition, especially in the online space. Companies can learn from their competitors’ successes and failures. The key is to not let consumers visit the website of the competition. Online retailers should know what their competitors are doing.
- Current inventory: The supply chain plays a massive part in e-commerce success. Back-end logistics is critical to product delivery, but online retailers can improve sales by increasing order frequency, reducing order size and reducing lead times. As a result, cash flow improves and business owners see a higher return on their investment.
- Customer experience: According to an American Express customer service report, 78 percent of consumers have left a transaction or abandoned their carts because of a poor customer experience. The same report also found that more than half of respondents have spent more with a company due to a history of positive customer experiences. Simply put, e-commerce businesses need to focus on serving the customer’s needs throughout every step in the shopping and buying process.
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