Why e-commerce - what makes the online sector so special

Fatih-Kağan Taşkoparan

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The e-commerce industry is now well-known and popular across all generations. Whether it's big marketplaces like Amazon, Galaxus and eBay, or webshops from your favorite stores like H&M or Zara - to say it's still a trend in 2023 would probably be an understatement. On the contrary, online stores are now a survival strategy for retailers, especially in the wake of the coronavirus pandemic, which has forced brick-and-mortar retailers to adapt more and more. Find out what makes the online sector so attractive and why more and more companies and retailers are expanding their online presence in the latest edition of our fynax blog.

Digitization as an opportunity for brick-and-mortar retail?

Brick-and-mortar retail is facing major challenges, especially in the wake of the coronavirus pandemic, as increased customer expectations and fiercer competition with the e-commerce sector are putting pressure on retailers, but this development also offers opportunities to further develop their own business.

Customers are increasingly shopping online from the comfort of their own home, but still want a personalized digital shopping experience and high-quality customer service. Here we summarize why digital processes can also relieve the burden on brick-and-mortar retail and help to establish a hybrid sales model.

The advantages of an online store

What makes e-commerce so attractive? A big plus point of the online store is probably the comparatively simple entry into e-business. This is because e-commerce is also possible with a smaller budget, which means that start-ups or small companies also have the opportunity to get started without any major obstacles. This is mainly due to the fact that online stores do not have to pay store rent, automated billing is possible and you can sell conveniently, i.e. at any time and from any location.

Another plus point is the accessibility and availability of the online store. In contrast to bricks-and-mortar stores, the online store is not tied to opening hours or its location and is therefore available to customers 24/7. Orders can be placed online, at any time and from anywhere. Online retailers can therefore also benefit from the possibilities of international trade, for example, and thus serve a larger sales market - provided they have the necessary logistics in place.

From an economic point of view, the savings in personnel costs are particularly noticeable: An online store and automated billing processes are not dependent on personnel, but function digitally.

How to use the webshop effectively?

Your own webshop can be configured quickly and easily with the appropriate software. The possibility of an automated sales process and flexible sales strategies can significantly increase sales. In particular, the digital and cross-media use of the various channels, such as sales and advertising via social media, makes the sales process even easier.

Not to be underestimated is also the effective use of analysis tools or Business intelligence solutionswhich enable online retailers to better identify their age and target groups, to better understand consumers and their purchasing behavior and to check whether, for example, promotions and campaigns are effective or not.

The online store: only advantages?

The advantages of an online store are obvious, but is that the whole story? Not quite! There are also risk factors in the e-commerce industry that retailers should not ignore.

E-commerce requires online marketing expertise. Only targeted SEO-optimized advertising can reach your target group on the relevant social media channels and thus increase your reach. But here, too, it's not as easy as it sounds: although it's relatively easy to get started in online retail, the competition on the market is fierce. As an online retailer, you should try to have a unique selling point in order to stand out from the crowd.

The current supply chain problem also shows how much the online industry depends on functioning logistics. Storage options for your own goods or functioning supply chains in dropshipping are decisive factors for online retailers worldwide.

It is also very important to configure effective cybersecurity in the online store. The risk of data being tapped is significantly higher in online retail than in brick-and-mortar retail. Customer data security and thus data protection, as well as ensuring a flawless payment system and seamlessly functioning logistics are sources of risk that affect every online retailer.