Competing With Giants: Small Businesses in E-Commerce
In this National Small Business Week, merchants from small businesses are increasingly moving beyond Main Street and into E-commerce.
And with the news that post-pandemic growth for most Main Street small and medium-sized businesses (SMBs) is surpassing analysts’ expectations. Just how these vital components of the American economy are doing so is top of mind.
The answer, in many cases, lies in expanding into e-commerce and establishing an online presence. Online commerce, after all, eliminates geographical barriers, allowing small businesses to reach customers beyond their local area. This expands the potential customer base and increases sales opportunities.
Unlike physical stores, an online store provides customers with the convenience of 24/7 shopping. This flexibility can lead to increased sales and customer satisfaction.
Against a dynamic macroeconomic backdrop, today’s SMBs are finding themselves operating in a new reality. This requires them to be not just responsive when it comes to new innovations but to be proactive about separating the signal from the noise and identifying new opportunities — especially across the digital landscape.
But just establishing an e-commerce presence isn’t enough for small businesses to stand out these days. Neither is “just” establishing a presence online as easy as it sounds at first glance. There are a whole host of considerations and go-to-market strategies for small businesses to weigh when building an omnichannel model.
Particularly if they want to compete with the 800-pound Big Tech juggernauts dominating the space.
Providing a Quick, Easy and Reliable Online Experience
Moving a business online can be as challenging as it is rewarding.
No matter the business, several pillars support a successful online strategy, Alex Burgin, vice president of Authorize.net, told PYMNTS, stressing that any business needs a simple, clean and easily navigable website. The shopping cart should be simple, too, leading directly to a wealth of payment options.
At a high level, Burgin said, “whether it’s a lemonade stand on the side of the road, or a complex PC computer company, every business needs to accept payments. And at the core, every business needs to think about what their digital presence looks like and how they interact with their clients.”
“Apps and connected devices make [shopping] experiences seamless, secure and efficient. And unobtrusive,” PYMNTS’ Karen Webster observed in a feature last fall. “It takes three minutes between meetings to place an order on Instacart — it takes 60 minutes or more to drive to and from the store and shop.”
The PYMNTS Intelligence study “Main Street Health Survey Q4 2023: E-commerce Protects Main Street SMBs’ Bottom Line in a Cooling Market,” created in collaboration with Enigma, revealed that Shopify and Squarespace are the most popular platforms among Main Street SMBs. Seven out of 10 firms surveyed cite one of them as their most used platform. The combination of versatility, ease of use and the possibility to customize the shopping site at affordable prices are the rationale behind their popularity.
The research also reveals that e-commerce platform preferences vary across industries and sizes. For instance, high-revenue Main Street SMBs demand more features of e-commerce platforms, while ease of use and low cost are enough for the average firm.
Leveraging Digital Growth Opportunities
PYMNTS Intelligence has found nearly 8 in 10 Main Street SMBs use online channels, while an additional 16% are interested in implementing them. Moreover, the average Main Street SMB generates half its sales via online channels. Main Street retail SMBs lead the way, generating 54% of their sales from these channels.
And according to separate PYMNTS Intelligence in the report, “Main Street Small Business Growth Exceeds GDP for First Time in Two Years,” Main Street SMBs with increasing revenues are more likely to sell their products online than those businesses with decreasing revenues.
Businesses with growing revenues are more likely to reach their customers via social media (68%), mobile apps (27%) and websites (60%) than businesses with stagnating or decreasing revenues.
In the digital age, of course, fraud remains an evergreen concern. Ensuring secure payment processing is essential for building trust with customers and safeguarding sensitive financial information.
By demonstrating a commitment to security and protecting customers from fraudulent activities, e-commerce firms build trust and credibility. Customers are more likely to return to a platform where they feel safe and valued. Leading to increased loyalty and positive word-of-mouth recommendations.
Beyond fraud prevention, efficient logistics and order fulfillment are critical for delivering a positive customer experience. Small businesses need to establish reliable shipping partnerships, optimize inventory management and provide transparent tracking and delivery options.
By understanding these considerations and leveraging the opportunities provided by e-commerce, small businesses can effectively fuel their growth and compete in today’s digital landscape.