6 Critical Elements of E-Commerce and How They Work Together

E-commerce is a part of everyday life for many people, and the ability for an on-demand retail experience at our fingertips has created exponential growth…

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E-commerce is a part of everyday life for many people, and the ability for an on-demand retail experience at our fingertips has created exponential growth opportunities for businesses that meet consumers’ ever-growing demands. If you want to get in on the gold rush of e-commerce, there are six main components that have to work together seamlessly to create a seamless experience.

Shortcomings in any one area can result in dissatisfied customers who never return or share bad experiences with others. In turn, this impacts your brand image and leads to an overall bad reputation for your business. So what are the most critical elements of an e-commerce business? 

The six critical elements of e-commerce include website usability, supply chain management, multi-channel digital marketing, shopping and check-out experience, customer support, and security protection. These all come together to create a positive user experience that works to build customer trust.

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This article will explore each of these elements in more detail and explain how they work together for the benefit of both the business and the consumer. 

1. Website Usability

Having a user-friendly platform is the first and most crucial element of your e-commerce business. Not only does usability improve the customer’s on-page experience, but it also can directly influence your website’s SEO.

Many elements make up a good user experience, starting with your homepage design. 

According to the experts at Yoast, the first thing you need to do is understand your target audience’s needs and search intent.

Once you understand who your customer is and what they’re searching for, you can optimize your homepage to meet their needs with a call-to-action front and center.

Other important components of improving usability include:

  • Mobile-friendly platform – according to Statista, 31% of e-commerce sales are completed on a mobile device.
  • Internal search feature – make it as easy as possible for users to find what they’re looking for.
  • Product filtering capabilities – allowing the customer to filter by price, style, size, color, etc., will improve the user experience and help them find what they want.
  • Optimize product pages – use several images for each product, indicate if items are out of stock, show related products, and use bundling.
  • Product reviews – allowing real customers to review products and leave ratings without censorship improves trust and helps users compare items. Reviews can also improve SEO.
  • Site speed – optimize your website’s load time as much as possible. Every second that your customer waits for the page to load creates the potential for them to leave your site or abandon their cart.

2. Supply Chain Management

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Another key component of e-commerce is managing your supply chain. In order to create a seamless shopping experience, you need to have full control over the delivery and payment process so that there are no unexpected delays or problems with products getting into customers’ hands. This all starts with setting up a well-organized warehouse and inventory management system. 

Supply chain management is the heart of the e-commerce operation and involves:

  • Ordering and managing inventory
  • Product sourcing
  • Warehousing
  • Shipping
  • All the other steps involved in moving products from the manufacturer to the consumer.

Inventory management is one of the essential strategies in the supply chain. Traditional retail stores typically have warehouse and distribution center locations to receive and hold merchandise until it’s transferred to the point of sale and ultimately to the customer. 

Even without a large warehouse, a traditional retailer has a storefront or physical location where items are merchandised and can be stored for selling online. 

E-commerce retailers don’t have a physical storefront location to hold merchandise. This makes inventory management even more essential. Many e-commerce businesses outsource inventory to a wholesaler, which results in less risk of having inventory that may become unproductive.

Drop-shipping allows the retailer to purchase merchandise from another retailer and ship it to the consumer, eliminating the need for traditional warehousing. 

The other half of the supply chain involves getting the merchandise to the customer. This involves selecting, packaging, and shipping inventory. 

3. Multi-Channel Digital Marketing

Have you ever thought about selling your products or services online without any images or videos? It’s as crazy as an idea as it sounds.

One of the most important components of any e-commerce strategy is marketing strategy. The company needs to plan a way to generate website traffic, increase sales and promote products. This includes advertising on social media channels, SEO, email marketing and paid campaigns in Google or Facebook Ads.

The goal of the marketing campaign should be to increase product awareness and customer engagement by creating valuable content that aligns with what customers want to see when they are researching products online.

According to Hubspot, e-commerce marketing involves driving awareness and action toward a business that sells goods and services electronically. Successful e-commerce marketing involves multiple channels and platforms, including:

  • Social media
  • Marketing emails
  • Website content
  • Search engine optimization (SEO)

Digital marketing is a critical element of e-commerce because your retail website relies on visuals to show consumers what products you are offering. Social media posts can help draw customers to your website and can also serve as shoppable content.

Creating content like a blog or YouTube videos will improve SEO for your webpage and drive traffic to your site. 

Business owners also shouldn’t underestimate the value of email marketing. Emails offering special offers, discounts, or localized promotions can help bring customers to the retail site, while abandoned cart emails can encourage shoppers to return and complete their purchases.

For content of your product that can be used for your website or listing pages, you should hire a product photography specialist who can handle the process from start to finish.

4. Shopping Cart and Checkout Process

Another critical element of e-commerce is the shopping cart and checkout experience. 

Once users find an item they’re interested in, it should be straightforward to add the item to their shopping cart. It’s important to make the “add to cart” button visible and use a color that stands out on the page.

Advancing to the shopping cart should also be quick and seamless – remember the importance of usability and load speed. The best check-out experience should include the following:

  • The checkout process should begin with a summary of what the customer is purchasing. Include descriptions and images of the product for the user to confirm the items.
  • A transparent pricing summary should display the per item and total price. This will also include any added fees like sales tax and shipping costs.
  • Offer a “checkout as guest” option. Though it may be tempting to force a purchaser to hand over their contact info, you will be risking them abandoning the cart instead. According to Statista, nearly 60% of online retailers offered guest checkout at the start of 2020, meaning more customers will expect this option.
  • Your checkout needs to incorporate multiple payment options. You should consider your customer base when determining which payment methods to make available.

According to Oberlo, the most popular online payment method worldwide in 2020 was a mobile wallet (44.5%), followed by credit cards (22.8%). However, in North America, those two swapped places, with credit cards at #1 and mobile wallets at #2. 

Statista reported that the most popular payment methods in Europe were services like PayPal, Alipay, WeChat Pay, etc. Therefore, it’s important to research who your customers are and understand their preferences to have the best results. 

4. Customer Support

Just because you don’t have a storefront with friendly faces to help customers doesn’t mean that your e-commerce business doesn’t need a customer support function. 

Having an easily accessible method for customers to contact a service representative is a critical element of a successful e-commerce business. 

Customer support is vital to develop trust with users. According to a 2018 report from Microsoft, customer service is important for brand loyalty for 95% of shoppers. 

In addition, American Express reported that the largest consumer base – millennials – will pay a premium (up to 21% more) for premier service. 

6. Security Protection

A successful e-commerce company should be able to protect its consumer data from hackers and other security threats. With the increasingly digital world, there is more risk than ever before with potential breaches in personal information.

According to the University of Kentucky, e-commerce security threats include:

  • Intellectual property threats
  • Client computer threats (i.e., viruses, trojan horses)
  • Communication channel threats
  • Server threats
  • Data misuse/privacy loss
  • Spoofing, cracking, rootkits

To combat these threats:

  • Partner with the right e-commerce platform that offers security features. 
  • Use SSL certifications to move from HTTP to HTTPS to demonstrate security measures to site users. 
  • Maintain PCI compliance to ensure that credit card information is being handled securely and display trust signals and logos on pages so visitors can see them right away. 

The Takeaway

Just because e-commerce businesses are saving money on overhead doesn’t mean they aren’t paying out in other ways. Though they may not need a costly storefront, consumers today expect a lot from even the smallest online retailers. 

With that in mind, each of the elements discussed above plays an integral role in the success of your online business. 

Without website usability and a clean cart and checkout experience, even the most loyal of customers would likely navigate away to a different site. Similarly, a poor customer service experience or security breach would likely result in a loss of repeat customers.

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Benjamin and Sheila Harty

WE HELP E-COMMERCE SELLERS THRIVE!

Welcome to Skyline FBA! We are product photographers who specialize in E-Commerce Hero Images (the main listing image), and we help entrapeneurs create the visuals they need to get their products noticed in the online world.

We started our journey selling on Amazon ourselves, so we know just how hard it can be to run a profitable e-commerce business.

Our mission is to create step-by-step resources that bring together the best strategies and tips from successful clients in our network. We're glad you're here, and we hope you enjoy your stay!

- Benjamin & Sheila

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SkylineFBA.com is a participant in several affiliate programs, including the Amazon Associates program, and may be compensated for referring business to these companies at no additional cost to you. This post may contain affiliate links and/or links to our own products. We never recommend anything we don’t love or wouldn’t use ourselves.
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