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What are the Advantages and Disadvantages of E-Commerce?

In 2013 UK shoppers spent a whopping £91 billion in E-Commerce stores. With most leading retailers continuing to experience year-on-year growth – not to mention the thousands of successful small businesses – we’re anticipating that this figure will be well over £100 billion once the 2015 UK E-Commerce statistics come in. With that in mind we thought we’d quickly address some of the advantages and disadvantages of E-Commerce for retail businesses…

What are the Advantages of E-Commerce?

It’s probably easiest to start with the advantages of E-Commerce, simply because there are so many! One of the most obvious strengths of the E-Commerce model is that shoppers can browse your products in their own time. It’s well documented that the peak time for John Lewis’ E-Commerce website is Sunday evenings, where the largest group of users are browsing with iPads. This tells us that E-Commerce is convenient, with a 24/7 reach and that this lends itself to successful retail.

Another advantage of E-Commerce is that you are not limited by geographic considerations. E-Commerce allows you to reach new customers online. There are various ways in which you can accelerate this process, including SEO, Pay-Per-Click, traditional advertising models (including TV, radio and magazine) and social media. The idea that customers choose retailers from the other side of the country isn’t a new one; what is new, however, is the fact that they can be found in a matter of minutes.

An advantage of E-Commerce that is often overlooked is that it allows you to scale your business over time. Starting a retail business is challenging enough without having to invest in expensive overheads. However, E-Commerce allows you to start small and build momentum over time as you scale your business. There are various ways to do this. Some businesses use pop-up shops to combine their online and offline activity. Others roll out a limited range of products in order to build up a customer base. Some retailers with a very large range of products benefit from E-Commerce because they avoid the rental costs usually associated with this kind of business model.

What are the Disadvantages of E-Commerce?

It has to be said that there are very few disadvantages to E-Commerce. However, there are several things that you do need to consider before taking the leap and launching an E-Commerce business.

Most retailers now have an E-Commerce presence, which means that in many sectors there is a crowded market. This means that you will need to think hard about where your customers are going to come from. The most successful businesses tend to launch their E-Commerce stores on the back of a successful product or store, or they identify a niche/gap in the market that they can compete in.

You will also need a number of systems in place to ensure that your E-Commerce store is a success. Reviews are very important because they are the only way that new customers can gauge the trustworthiness of your business. Having a system in place to monitor and respond to reviews is therefore crucial. You will also need to carefully monitor your sales and stock levels to make sure that your online store corroborates with your actual stock levels.

What are the Advantages and Disadvantages of E-Commerce?

It’s helpful to consider the advantages and disadvantages of E-Commerce. In our experience, clients who have strategically invested in E-Commerce solutions have seen impressive growth. To find out more about our E-Commerce website design services please don’t hesitate to contact us today.