Ignoring e-commerce, or being unable to operate smoothly and professionally online, is akin to locking your doors, refusing to answer the telephone, letting customers stand at the counter unattended…
E-commerce has grown dramatically in the last few years and shows no signs of slowing down. In fact, major web metrics firms indicate even more explosive growth in the coming years, particularly in business-to-business (B2B) activity - Forrester Research indicates that 84% of large businesses already use the web for purchasing materials, and the number is projected to grow. It is important to distinguish the decline of internet stock prices in 2000 (the so-called ‘dot-com bust’) from the reality of today’s web commerce boom. Business and consumer confidence in the internet is at an all time high. Of special interest to businesses: though consumer-oriented sites get all the attention, B2B transactions actually account for the majority (roughly 85%) of all web commerce. In the current economic climate, a B2B supplier risks being marginalized without a strong internet presence.
The growth of online transactions mirrors the global increase in broadband internet usage, with a particularly substantial rise (a projected 18% compounded annual growth rate by 2008) in the United States and Canada.
In Canada, 66% of private sector firms employed high-speed access in 2003, a sizable increase from only 48% in 2001, and public sector high-speed internet use has been much higher, with a whopping 95% of firms using broadband in 2003. Studies conducted by the comScore Networks research firm have confirmed a direct correlation between broadband internet usage and a greater likelihood of online purchasing. Furthermore, broadband users have been found to use the internet more frequently and stay online for longer durations of time.
What these findings mean for business is that fully embracing e-commerce has not only become appealing and cost-effective, it has become necessary in order to compete robustly in the changing marketplace. In the early ‘90s, only the largest companies could afford to experiment with e-commerce because of the then enormous cost of required powerful computers, customized software and technical support. Today, however, the vast spread of the internet, the greatly reduced price and availability of fast computers, and the increasing affordability of website development have all created an opportunity for virtually any business to streamline operations and reduce costs by shifting to online transactions. In fact, the projected figure for on-line trade in 2006 is $12.8 trillion! Of this global e-commerce figure, North America will account for 58%, with the United States' percentage being 26% and Canada will have 20%.
The consumer, too, now has the ability to use the web to research more effectively and thoroughly before making purchases, putting greater emphasis on companies to maintain high quality and user-friendly online stores and portals.
A recent Forrester Research survey reveals that 46% of customers will research online but buy offline, 27% of customers will research offline but buy online, and 17% of shoppers research both online and offline. Thus, the internet, whether as an informational or actual transactional tool, has firmly established itself as a major player in consumer decision-making and behavior.
For maximum benefit, just being online is not enough – it must be done very well.
Inadequate online service led 70% of buyers to spend less at the merchants’ bricks-and-mortar stores.
According to a recent Zona Research and Keynote Systems Report, over $25 Billion (USD) was lost in e-commerce due to users abandoning the website prior to a purchase being completed or during the process. The users simply gave up because the load times (how fast it takes a page to be displayed in a browser) were painfully slow. Today’s online shoppers are very demanding—particularly due to the increased proliferation of high-speed access--and they typically only allow 12-18 seconds for information to be presented. The internet has come to symbolize speed and efficiency – the slightest bit of delay or poor design at a website can cause a potential user to abandon it in frustration, never to return again. Thus, it has becoming increasingly necessary for businesses to ensure that their websites function optimally and utilize state-of-the-art technology: The choice of web developer has become a critical determinant of website success or failure.
Key Factors of E-commerce Success
A recent poll of web developers conducted by Sitepoint reveals that unclear business plans, poor site concepts, and lacking marketing skills head the list of reasons why some websites fail to generate proper income. A business seeking a web developer would be well-advised to find a company with proven success in addressing all these factors and providing realistic and achievable solutions.
Online business professionals agree on some general guidelines when looking at potential e-commerce developers:
1. Choosing a complete source— Ideally, the company should be able to design your site and host it as well. If the design firm can't host the site, it may be difficult to find a hosting company that will meet the specifications of the designed site. Selecting a firm that can provide you with both will save time, frustration—and likely, money, as you will usually receive discounts on package deals involving designing and hosting.
2. Background checking— The company should have an extensive portfolio of successful and working websites, preferably notable ones in your industry sector. Testimonials, documents, and statistics should be readily available. Especially if the company has previously created a successful site within your type of industry or business, there is a greater likelihood the results can be duplicated for your business. Time and cost savings are likely to be reaped, as existing applications may often be quickly adapted to satisfy your needs.
3. Be willing to pay for high quality—In the digital age, the ‘you get what you pay for’ adage applies very heavily. Skimping on features or trying to use do-it-yourself tools and ‘instant e-commerce’ sites may end up costing more in the long run. Behind the strikingly attractive exterior of modern, smoothly-running websites lays a considerable amount of sophisticated programming! Making sure that you are hiring highly-trained professionals is very important—a clumsily-functioning or inelegantly designed website is a sure way to deter customers.
4. Look for the best fit – The company should be experienced in dealing with businesses of your size and type. Comparative shopping will lead to order-processing and content management solutions that can best accommodate your existing operating structure.
Intelligent research, proper planning and open minds underlie all web success stories. By carefully examining current trends and avoiding pitfalls, businesses have been able to thrive on the web. Conditions have never been better for entering online business - the internet is an undisputedly prime arena and e-commerce its glowing star.
--Alphonse Leong
2005
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