What starting an online store is important than ever before

Customers have embraced online shopping, spending $861.12 billion online with U.S. retailers in 2020, up 44% from 2019. While the move to selling and shopping online was accelerated by the pandemic, it’s now changed consumer behavior and there’s no going back.

In a survey conducted by Wakefield Research for Square’s Future of Retail report, consumers say they do an average of 43% of their monthly retail purchases online. Online shopping is especially popular among parents and people living in urban areas, who say they now make about half of their purchases online. And retailers are meeting their needs. While nearly three out of four retailers say that converting or expanding their business online was the biggest challenge of the pandemic, it’s a challenge they dominated. A whopping 88% of the 500 retail owners or managers surveyed are now selling their products online.

Percentage of consumer shopping done online

If you’re looking to capitalize on this trend, read on for details on important aspects of starting an online arm of a retail store, service-based business, or restaurant.

What is eCommerce?

eCommerce refers to the process of buying and selling goods and services online, though in recent years, and even more so during the pandemic, the shopping experience has extended beyond that. For example, retailers that have a physical location can incorporate eCommerce by allowing customers to browse and buy online and pick up in store. Restaurants also saw a boom in online ordering that’s likely to stay. Eighty-eight percent of restaurants say they are considering a switch to digital-only menus. Almost half of restaurant owners or managers who already offer digital menu access using URL or QR codes plan to continue, with 47% of that segment saying they are “very likely” to completely replace physical menus with digital menus.

In addition to allowing retailers and restaurants to better serve existing customers by making shopping and browsing menus easier for them, an online store can allow businesses to find totally new audiences — ones that may never enter their physical location. Independent retailers, small businesses, and large corporations can all benefit from incorporating eCommerce into their business strategy.

Like any digital technology, eCommerce has continued to advance rapidly. Starting in the 1990s, eCommerce began to target a consumer market and online retailers started popping up. Now, almost any business owner or entrepreneur can use an eCommerce platform to open an online store in minutes.

Benefits of selling online

“The advancements we saw in 2020 are only going to continue post-pandemic,” says David Rusenko, Square’s Head of eCommerce. “The changes aren’t a way to simply make it through — they’re permanent and redefining what a meaningful retail experience can look like,” he explains.

Many retailers are experimenting with different ways of running their businesses, whether it’s trying out wholesale or a new product line, or dabbling in another industry entirely. And going online is making those bets more successful. Among retailers who are selling online, an average of 58% of their revenue now comes from online sales. Of retailers surveyed, one in six say all of their revenue comes from online sales, and 36% say it’s very likely that they will be an online-only store in 2021 and beyond.

Here are a few benefits of running an eCommerce store:

24/7 shopping: Most eCommerce websites allow shoppers to peruse products and make buying decisions at any time, day or night. This makes shopping easier for customers, and that kind of accessibility is a huge competitive advantage. As a business owner, this also allows you to bring in sales while you’re off doing something else (even while you’re sleeping).

Meet customers where they are: Having an online store gives you more channels to engage with customers. Integrate with social media and let people shop from their feed, help customers find you in Google searches and make purchases as as soon as they are ready, and send out newsletters to customers with products that they need based on their purchase history.

Widened scope: A physical store is limited to selling to customers who are in the area. Many eCommerce websites extend businesses to people all over the country or around the world, vastly expanding their customer base and potential revenue. Selling online also offers the ability to broaden or increase inventory — the number of items a business can sell online doesn’t need to be limited in the same way as a physical store, which might be a consideration to increase cash flow.

Purchase-funnel clarity: Currently, it’s nearly impossible to track how often a single customer comes to a physical store to browse before making a purchasing decision. However, an online store can track a customer’s every click, providing valuable insights into the purchasing process and paving the way for marketing opportunities (such as abandoned cart emails) to nudge customers who may be on the fence about purchasing.

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