Simple Strategies for Enhancing eCommerce Profitability
As the eCommerce channel continues to grow across geographies and vertical markets, it will comprise a larger and larger share of total retail sales. Forrester Research forecasts a compound annual growth rate (CAGR) of 9.5% between 2013 and 2018 for U.S. eCommerce. By 2018, Forrester expects that online sales will reach $414 billion, and account for 11% of total U.S. retail sales.
What are the key drivers of growth in the online channel? The greater penetration of mobile and tablet devices, increased spend from younger consumers, continued investments by online retailers in broadening their selection and greater wallet share shift to the web channel from online buyers - all driven by rich web offers and more successful marketing efforts. Today’s consumers have come to expect retailers to cater to their shopping pattern preferences, enabling them to research and purchase anywhere, any time and on any device.
As merchants look to start or grow their businesses, you can bet that online will be a big part of their strategy. However, competition continues to intensify as more merchants move online and existing merchants enhance their web operations. For Internet retailers to participate successfully in this highly competitive marketplace, they know that they must implement programs that drive site traffic, provide a pleasing shopping experience, offer desirable merchandise at competitive prices and accurately fulfill customer orders. Even the smallest online retailers have become more sophisticated at promoting and operating their web sites.
Although traditional business-building strategies can be effective, the Internet marketplace also offers its own unique challenges and opportunities for attracting customers and building customer loyalty. In particular, the online payment process plays a significant - and sometimes overlooked - role in achieving the eCommerce growth and profitability that merchants desire.
Implementing the strategies below may offer new opportunities for merchants to differentiate and enhance their online businesses:
1. Expand Into International Markets
Differentiate your online store from competitors by introducing features that enhance the international customer’s online experience. Use a payment processor that excels in fraud management, has a global presence and provides a comprehensive suite of payment options.
2. Offer Consumers More Ways to Pay
Consumers want more payment choices than just credit and debit cards. By offering additional payment options, such as e-checks, PayPal, Bill Me Later and Google Checkout, you can turn otherwise abandoned carts into incremental revenue.
3. Protect Your eCommerce Bottom Line
Evaluate your fraud management program regularly and look for new tools that can be used to stay ahead of fraudsters. Your payment processor can be a key resource in your fight against fraud and in cost - effectively managing your PCI DSS compliance program.
4. Leverage Your Business Intelligence
Systems across your business capture and store critical consumer and purchase data every day. Among these, the payment process generates an abundance of valuable data that can be harnessed to better inform your business growth strategy and service your customers.
This is the first article in a First Data series about payment-related strategies that can enhance a merchant’s online services, open new markets and help increase profits.