E-commerce is the buying and selling of products or services over the internet. For many people, it is something they do on a regular basis, and it can often be hard to imagine a time when this kind of service wasn’t a possibility.
Whether it’s the purchase of online books, paying for music downloads or even having something delivered right to your doorstep, e-commerce has revolutionised the way we make purchases. For SMEs, offering e-commerce services can be an efficient way to drive sales in a business. As brick and mortar shops continue to struggle, many companies are relying more and more on their e-commerce stores to continue to compete.
With retail giants like Amazon completely dominating the internet shopping market, is there anything SMEs can do to retain business online?
Early Days of E-Commerce
Supposedly the first-ever e-commerce transaction was some marijuana sold by Stanford students to MIT students in 1972 via the Arpanet. However, the first online shopping experience didn’t take place until 22 years later in 1994 when the New York Times chronicled the sale between two friends of a Sting CD marking the first-ever ‘secure online purchase’ – secure due to the encryption technology that protected the buyer’s credit card information.
A form of non-secure online shopping had already been happening in Europe since the 80s, thanks to terminal-based services like France’s Minitel and Germany’s Bildschirmtext. Then it all kicked off in the 90s with the likes of Amazon, which was an online-only store, being launched in 1995 as a bookshop to eventually become the largest online retailer in the world.
As broadband became something that households couldn’t do without, more people began to have permanent access to the internet and more opportunities to shop online. This continued to be the case with the introduction of smartphones and social media, which all aided the popularity and rising engagement with online shopping.
As of 2015, Amazon now accounts for more than half of all e-commerce growth, and it is growing steadily year on year with no sign of slowing down.
Today, the idea that a CD was the first e-commerce sale is ironic given that it is this very medium that has driven the sales of CDs to become effectively decimated with the easy access to music downloads and streaming.
The Rise of the Amazon Effect
The Amazon Effect refers to the phenomenon that Amazon has raised expectations in consumers due to its e-commerce services. Amazon typically offers a quick delivery time on goods, especially since the introduction of Amazon Prime, offering just one-day delivery, or even same-day delivery in some regions. As a result, customers now expect free, quick delivery as default when purchasing online, and it’s these expectations that can cause issues for SMEs.
The effect can be seen all over the world, particularly on the high street as more and more brick and mortar shops close down. In order to compete, these physical stores have begun to change the way they operate, so that they’re not fighting directly against e-commerce, but working with it. One way this is happening is that physical shops are focusing more on offering a unique shopping experience that consumers can’t get online, such as clothes shops employing the use of personalised shoppers – people whose role is to help shoppers pick out outfits for them based on their needs.
Physical stores have realised that people still enjoy shopping in person, but that most of their “chore” shopping is preferred to be done online due to the convenience. So, in order to stand a fighting chance, the shopping experience needs to be enhanced to give consumers something they cannot buy online.
What Can SMEs Do to Compete?
Studies have shown that Amazon’s success has led to some business closures, but some businesses have managed to tackle the problem creatively and effectively, allowing them to compete for customers.
There has been an ever-increasing pressure for SMEs to match Amazon’s speed and efficiency with delivery of goods; otherwise consumers will likely to be tempted to go elsewhere. Fortunately, there are ways smaller businesses can implement technologies to increase their speed and efficiency on the factory floor.
If your business has not already gone mobile, it’s definitely something to consider doing. A mobile barcode scanner can capture data fast and accurately without the restriction of wires tying you to a particular spot in the warehouse. These handheld devices can follow you anywhere and are at your disposal to take quick and accurate stock taking wherever you are, allowing you to improve your warehouse efficiency and offer your customers a faster product turnaround.
For mobile scanners and other barcoding solutions, contact GSM Barcoding today to find out more.