Scaling E-Commerce Channels, Part 3
Over the past few years, the biggest trend in the retail sector has been the emergence of e-commerce as an unstoppable juggernaut, and the hard figures prove this fact. In 2017, about 1.66 billion shoppers (worldwide) spent $2.3 trillion purchasing goods online. E-commerce retail sales are expected to reach $4.48 trillion in 2021, while retail sale through e-commerce is growing at 15% to 17% every year compared to 5% for the retail industry as a whole. Such massive growth presents operational challenges to the companies planning to scale e-commerce channels for their business, and this inevitably results in mistakes. Two such mistakes include poor customer service and not having a presence on mobile platforms.
Poor Customer Service
- Customer service is a broad term that encapsulates the entire life cycle of the customer's experience on the e-commerce platform. Research has shown that customer satisfaction and the sustainability of an e-commerce brand largely depends on the quality of customer service. These actions include engaging customers with swift responses to their queries, offering refunds, and providing exceptional after-sales service, among other parameters.
- Research by Guardian has shown that by 2020, customer experience will become the most significant brand differentiator, overtaking the quality of the product and price.
- A survey by Forbes has shown that 80% of businesses consider that they are providing excellent customer service to customers, but only 8% of the customers agree to this claim. Thus, there is a considerable gap between perception and reality when it comes to customer service.
- As per a report by Internet Retailer, e-commerce companies that have strong customer support channels retain 89% of customers, while companies with weak customer support channels retain only 33% of customers. Hence, to scale an e-commerce channel for their business, companies should develop an excellent customer service team at all levels.
- To create excellent customer satisfaction that improves the e-commerce brand's chances to scale, businesses should be proactive in their customer approach. They should make themselves accessible to their customers' queries and needs at every step of their online journey. Another great way to improve customer satisfaction and engagement is by introducing relationship marketing and quality loyalty programs.
- As per a study, 49% of consumers surveyed stated that they spent more money on an e-commerce website after joining a loyalty program.
Not Having Their Presence on Mobile Platforms
- A common mistake by companies while scaling their e-commerce channel is not having their e-commerce site optimized on mobile platforms as an application and mobile apps like desktop websites.
- As per a report by OuterBox published in January 2020, 79% of the smartphone users in the United States made online purchases using their smartphones during the previous six months.
- Another survey indicated that 89% of e-commerce customers prefer using apps on their smartphones instead of desktop websites.
- Having mobile apps lead to customers making faster purchases on the apps (1.5 times faster than desktop websites), having a better customer experience on their user-friendly apps that focus on a particular service and minimal content, using the app offline, having tailored content, and utilizing push notifications for making faster purchases.
- To scale the e-commerce channel for their business, e-commerce companies should have mobile apps that have the following features: user-friendliness, enhanced security, push notifications, product personalization, greater product availability, access to social media, and various purchase options that are quick like cashless transactions and mobile wallets. Also, mobile apps should ensure that they work seamlessly with mobile e-commerce API solutions such as Moltin, Contus, and Elastic Path.
- As the technology for mobile platforms develops further, the latest trends for mobile apps indicate the need for the following features as well: interactive chat, voice search, AR/VR features, bots or digital assistants, predictive search, and integrated payment systems.
- For example, Exxel Outdoors, an e-commerce company that specializes in outdoor recreation products, witnessed online sales on their mobile platform jump by 272%, while their mobile revenue rose by 193% after they re-platformed their mobile application to BigCommerce.
Our research began by trying to obtain publicly available information on common mistakes made by large companies that generate annual revenues ranging from $100 million to $900 million, but we could not find such data, even after an extensive search. As per a report, only 0.04% of all companies manage to generate $100 million in annual revenue in their first few years, and hence, our search field became very narrow. To avoid this bottleneck, we expanded our search criteria to include companies that generate annual revenues below $100 million. By doing this, we managed to identify that poor customer service and not having a presence on mobile platforms are two common mistakes made by such companies while planning to scale e-commerce channels for their business. Industry experts in the field of e-commerce and marketing like Magento, E-commerce Nation, and GrowthRocks commonly identified these mistakes.