Study shows top 5 reasons businesses sell online

Businesses add online channels for a variety of reasons, but which reason do they cite the most? PYMNTS Intelligence recently released the results of a Q4 2023 study in which 540 small and medium-sized business owners were asked why they use online channels.

In this Ecommerce Elevator, we’ll look at the survey responses in greater detail and examine what opportunities exist for brands that expand their online channel presence.?

#1 Expand customer reach?

35% of respondents said that expanding customer reach was their most important reason for adopting an online channel.?

Brands that rely solely on brick-and-mortar visibility, word of mouth, and traditional advertising to reach new customers may have a limited pool available to them.

Online channels allow businesses like these to expand their reach, even if it’s just to drive foot traffic to their stores, rather than selling products directly to customers online.

For example, a small bridal store in Sandwich, Massachusetts, can significantly increase its reach relatively quickly by using local inventory ads on Google to target prospects within driving distance.

#2 Increase sales

21% of respondents said that increasing sales was their most important reason for adopting an online channel.

Brands that want to generate more revenue often need to scale crucial processes of their business, like marketing and sales. Adding the right online channel at the right time can significantly boost sales growth, getting you closer to your revenue targets. Brands can strategically leverage built-in channel customer bases, advertising features, and delivery networks to scale their operations.

According to an Omnisend analysis, marketers using three or more channels in a campaign had a 494% higher order rate than those using a single-channel campaign.

#3 Adapt to customer preferences?

16.6% of respondents said that adapting to customer preferences was their most important reason for adopting an online channel.

Consumer behavior is always changing, and that has been especially true over the last four years. COVID necessitated digitization for some businesses and has left a lasting change in consumer preferences around fulfillment: Today, buy online, pick up in store (BOPIS), remains a popular fulfillment option among consumers.

#4 Competitive pressure

10.8% of respondents said that competitive pressure was their most important reason for adopting an online channel.?

Imagine you’re a brick-and-mortar store owner whose competitor uses local inventory ads to drive foot traffic, a social media presence to build rapport, a marketplace account to sell products, and is partnered with same-day delivery companies to offer same-day fulfillment. Can you feel the pressure?

Businesses can apply competitive pressure and establish better connections with their customers, increase their reach and brand presence, and offer more convenient ways for customers to buy.

#5 Expand to other markets

6.1% said that expanding to other markets was their most important reason for adopting an online channel.

Online selling gives local brands access to the global marketplace. A medium-sized shoe-making business in Coolville, Ohio, can now advertise and sell to customers in Syracuse, San Francisco, or St. Petersburg with relative ease through third-party marketplaces.

The clunky process of selling online has been greatly streamlined by tech in every part of commerce: Marketplaces now provide faster fulfillment options, social media channels give customers direct access to brand storefronts, search ads are smarter and driven by more powerful algorithms, and the middleware that connects it all is way more sophisticated.?

More

Look out for these common but costly mistakes when adding new channels!

Want to expand your online presence but don’t know where to start? Check out this blog for a breakdown of the different kinds of channels available to you.