When the pandemic hit the United States, many businesses were forced to move their operations online. E-commerce was what saved retail in 2020. While traditional brick-and-mortar stores closed, digital stores opened and welcomed consumers across the nation.
In 2020, retail sales rose by nearly 3.5 percent to $5.6 trillion. The increase was caused primarily by online shopping. However, small businesses did not reap the benefits of the popularity of e-commerce during the pandemic. The ten largest retailers in the U.S. accounted for 68 percent of all e-commerce sales in 2020, with Amazon at the very front.
The platform founded by Jeff Bezos, the richest man in the world, represented more than half of all online sales last year. In short, big retailers became even bigger while small retailers disappeared.
While some small businesses managed to transition online and find success during the pandemic, many did not. E-commerce is a different landscape from traditional retail. Setting up shop on the internet is easier said than done.
The Technical Aspects of E-Commerce
E-commerce is not as easy as launching a website. The development of a website itself requires a lot of technical know-how. A business that wants to establish its own online presence delegates the task of creating a digital storefront to an e-commerce web design agency. These people know how to create a website that is modern, user-friendly, runs smoothly, and virus-free. A website needs to be all these things and more to attract online traffic and convert every visit into a sale.
Moreover, a business will need to incorporate the best practices of search engine optimization (SEO). Nowadays, if you search for a product on any search engine, likely, the first link that will come up is from Amazon. Smaller retailers need to compete, and SEO is their best strategy. SEO ensures that your e-commerce platform is visible to your target audience by placing your link on the first page of the search results. This will direct a steady stream of customers who are ready to make a purchase to your website without paying for ads.
Back in the day, when there were not a lot of e-commerce platforms, small businesses could rely on chance. When you set up a website, people will stumble upon it and make a purchase. Now, with so many different websites and brands competing for attention, small businesses need to learn to cut through the noise and make an impact to earn revenue.
The Logistics of Online Shopping
Beyond the creation of an e-commerce website, small businesses may also struggle with the logistics of online shopping. The internet creates opportunities for small businesses to gain new customers. Because shopping online is convenient, many people prefer shopping at brick-and-mortar stores.
However, there are logistical challenges that small businesses have to contend with first. When the orders start pouring in, where will the completed orders ready to be shipped or picked up be stored? Who will have to fulfill each order, especially when the small business has a limited staff?
A small business that sells grocery items, for example, will need to figure out how to keep food products fresh while waiting to reach the customer. The small business might need to acquire new freezers to act as additional storage. Moreover, what if the number of orders that come in is greater than what the small business can handle? They need to be able to scale up immediately, but hiring and onboarding take time. So, often, there will be a long queue of orders that will lengthen the wait time for customers and, likely, cause frustration.
Providing the Same Satisfactory Customer Experience
The one advantage of small businesses against big retailers, both offline and online, is customer experience. When a customer shops at Amazon or Best Buy, they do so out of need. On the other hand, small businesses create a friendly and supportive community. It is a place where shoppers can strike a conversation with each other, get to know the business owner, and bump into their neighbors. E-commerce strips retail the ability to bring people together.
E-commerce has been a lifeline for small businesses during the pandemic. While there are advantages to bringing your products and services to the internet, it is not for everyone. Small businesses that are yet to make the digital transition will face tough challenges ahead, including a lack of resources. To help small businesses get back on their feet post-COVID, it is important to also support those that remained offline.