The coronavirus pandemic has encouraged many entrepreneurs and small-business owners to either start selling online or significantly expand their ecommerce operations.
Evidence of this trend can be found in Shopify’s June 30, 2020, quarterly report. The company achieved a 28-percent increase in subscription revenue for that three-month period. The increase comes from new merchants as well as customers that have added additional services, such as upgrading to Shopify Plus.
BigCommerce, another SaaS ecommerce platform, reported that in the same second quarter it enjoyed a 7-percent increase in the number of customers generating more than $2,000 in annual contract value.
The pandemic may have encouraged many new entrepreneurs to start selling online and many established businesses to shift their focus to online selling. Image: Ecwid.
Two Scenarios
The growth in SMB ecommerce is likely coming from two use cases.
Consider, first, a new ecommerce entrepreneur. Perhaps this person was furloughed during the pandemic, or worse yet, lost her job entirely. Starting an ecommerce business seemed like the best hope.
Second, think of established businesses, perhaps even those that had even dabbled with ecommerce. Until the shutdowns this spring, these companies may have focused on their brick-and-mortar operations. Suddenly the businesses needed a way to sell online, even if customers would pick up the products curbside. Ecommerce was the solution.
Success
But ecommerce takes more than posting a few products online and waiting for the money to roll in. Successful ecommerce requires different skillsets than retailing from a physical space.
It requires a unique approach to customer acquisition, including knowing the best channels to acquire those customers. Other potential complications include sales tax collection and the logistics of packing and shipping orders.
“[Imagine that] I’m a small business,” said Erik Suhonen, vice president of Ecwid, a SaaS ecommerce provider. “I want to focus on my craft of making jewelry. I don’t really want to spend 90 percent of my time trying to figure out the technology,”
According to Suhonen, ecommerce platforms can provide critical insights and knowledge — beyond the technology — to help businesses that are new to online selling.
Business owners “want to log into a website…view my three products and sell them on the web, on mobile, and on Facebook and Instagram. It’s click, click, click, and now my products are available to be discovered by a massive audience,” Suhonen said, punctuating each sales channel by pointing his finger confidently.
“We assume that these SMBs are wanting to focus on their craft and not the technology. They might think, ‘I don’t know much about marketing, so maybe I’m just not going to market it at all’ or ‘I don’t know much about these sales channels.’ So we built those channels into our platform. We also emphasize education,” said Suhonen.
Ecwid and other platforms aggregate information from thousands of ecommerce websites and millions of transactions to identify the best tactics. Mix in some machine learning and artificial intelligence, and Ecwid knows when to recommend that a company take a logical step in its ecommerce growth.
In short, for at least some small businesses trying to sell online, established ecommerce platforms offer guidance and specialized knowledge to increase the odds of success.
