There’s no denying that the past few years have been something of a standout period for the eCommerce industry. Thanks to rapidly advancing technologies, the strengthening of global supply chains, and a huge shift in consumer buying behavior (due to the pandemic), it’s safe to say eCommerce is looking as healthy as ever.
Amazingly, by the end of 2021, global retail eCommerce sales are expected to reach nearly $5 trillion. However, with this huge rise in popularity and the vast array of revenue-generating opportunities, the eCommerce space has become immensely saturated with competition to the point that it’s extremely challenging for both new and existing businesses to differentiate and secure a share of the market.
With that said, if you run an online retail business, or if you’re thinking about diversifying a portion of your sales revenue with a digital sales channel, there isn’t any need to reinvent the wheel. In other words, you don’t need to bring a novel business idea to the table with your eCommerce store; instead, it’s helpful to look at what’s working for some of the biggest names around and find a way to implement some of their strategies within your own operations.
It’s no surprise to see all of the usual suspects in the list of top-ranking eCommerce websites. Names such as Amazon, Walmart, and eBay have dominated the online retail sector for as long as many people can remember.
Thus, if you’re looking for ideas on how to run your store and what level of service customers are expecting these days, look no further than the top dogs on this chart.
No matter what stage your business is in, it’s never a bad idea to view these examples and use them as a case study so you can try and emulate their success and better serve the consumers in your target market. On that premise, let’s take a look at the top two stores and some of the best value-adds they offer their customers.
Coming in at number one on the top charts, Amazon is a true goliath of the online retail industry. Their mission statement is to be “the world’s most customer centric company,” and that mantra rings true in almost every part of their service. After all, there is a reason why Amazon reigns supreme in the eCommerce space, and customers keep coming back for more. So what’s their secret?
Well, it’s difficult to pinpoint one thing, as Amazon has done a great job at adding value at just about every point of the customer journey. Be that as it may, it’s hard to ignore the amazing benefits to be found with Amazon Prime.
As of the first quarter of 2021, Amazon reported 200 million paying Prime members worldwide. After a 30-day trial, the service costs $119 per year (or $59 for students), although a JP Morgan analysis estimated that the service is actually worth $785 a year when you consider all of the added benefits and perks that customers get access to, and that study was conducted back in 2018.
However, the main perk is Amazon’s free one or two-day shipping, which quickly pays for the membership alone if you order from Amazon with any sort of frequency. Customers also get access to Amazon Prime Video (a video streaming service that competes with Netflix), Prime Savings (deals and exclusive offers), and even same-day delivery in a few select cities. Not bad for around $0.30 per day.
Founded in 1995, eBay is still going as strong as ever, with over 1.7 billion listings and nearly 190 million active users. The online marketplace has continued to dominate the online retail industry with its innovative marketplace that has become synonymous with digital auctions and C2C sales.
As for added value, most of the terms of the sale are dictated by the individual sellers, including things like prices, delivery fees, and delivery times. However, one thing that eBay has done a fantastic job of is establishing a level of trust between themselves and their consumers, facilitating a platform where both buyers and sellers can feel safe when transacting with each other.
One excellent example of this is eBay’s feedback system for both buyers and sellers, which stands head and shoulders above most other eCommerce offerings through its integrity and reliability. eBay regulates its users with detailed member-to-member feedback, creating an ecosystem where the community polices itself.
Every time you buy or sell an item, the eBay member you dealt with has an opportunity to leave a comment about you, and it will be left on your public profile for all to see. This does a great job at minimizing the potential for online fraud and other criminal activity, which establishes trust and loyalty between eBay and its users.
The two examples above provide contrasting takes on adding value for the consumer, yet they are both well worth noting. As for Amazon, subscription-based service offers the company a steady source of revenue, almost acting as an up-sell for the organization on top of their catalog of products and services.
As mentioned, Amazon has done a fine job at making their Prime subscription as attractive as can be, with perks such as free delivery and great discounts. While Amazon certainly holds an advantage in terms of economies of scale, a subscription-based service for your online store is a great way to increase customer loyalty and keep them coming back to your site – just make sure you try to make it as enticing as possible without eating into your profit margin.
On the other hand, eBay clearly demonstrates the power of creating an environment of trust. If consumers feel safe, they will be more likely to buy. It’s as simple as that. Through eBay’s member-to-member feedback system, the community regulates itself and highlights and identifies problem buyers/sellers, who will quickly earn a bad reputation – drastically reducing their chances of causing further problems in the future.
While the model is far from perfect, it is still a vastly superior system to that of Amazon, which famously struggles with fake reviews and sellers illegally buying positive feedback scores to boost the perception of their product. With that in mind, establishing trust with your customer base should be the number one priority of your store.
Whether this means setting up a feedback system similar to eBay’s or offering things like seller/buying protection and insurance, ensure you provide an authentic experience, and the customers will be sure to keep coming back.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.