How to Take Advantage of the Booming E-Commerce Market
The global e-commerce market has been booming for a number of years, with key drivers of merchant success including mobile, omnichannel and marketplaces. In 2016, global online retail sales will hit $1.6 trillion rising to $3.5 trillion in 2019. The interaction between online and offline sales has never been so important to consumers and potentially fruitful for technology providers.
When we discuss big retail numbers, we most commonly think about online giants such as Amazon, eBay and Walmart. However, the remarkable course of e-commerce has been a small business (SMB) phenomenon. In fact, if we look at Amazon, some 45 percent of all goods are sold on the Amazon Marketplace by SMB retailers. On eBay, SMB merchants have accounted for a 20 percent annual growth rate over the past 5 years.
The market for retail technology is surging as a result. Recently, Salesforce acquired Demandware for $2.8 billion in pursuit of a slice of the e-commerce market. According to Forrester, spend on e-commerce technology globally stands at $2.6 billion today and will double by the end of the decade.
At a time when the demand for cloud business applications is rising by 20 percent a year, it seems remarkable that many web hosts and service providers still do not fulfill e-commerce.
Advancements in e-commerce platforms mean that it is now possible for any web host or telco to offer a powerful, yet easy to use e-commerce solution with ease. As a result, we are seeing more hosting providers of all shapes and sizes, seeking to adopt or update e-commerce offerings in light of this potential.
Addressing the e-commerce customer has some excellent benefits for the reseller. The e-commerce user offers a high level of ARPU and customer lifetime. Value-added resellers have much potential to combine with other value added services. In fact, the market for associated design, implementation and support services comprises an additional 6 billion dollars today, rising to 10 billion by end of 2019.
This attractive market has not gone unnoticed. E-commerce pure players such as Shopify, have seen remarkable growth. The valuation of these providers serves to underline the high value of e-commerce customers. For example, Shopify achieves a market value of two and a half billion dollars from a relatively modest installed base of 275,000 SMB merchants worldwide. This is opposed to a market value of only five billion for GoDaddy with more than 14 million hosting clients. So how does a reseller explore e-commerce for the first time and what should they look for in a platform partner? It is true that e-commerce means rapidly evolving technology.
The strongest platforms today will fully enable cloud agility and ensure the widest set of merchant needs can be fulfilled.
While there are options with both open source and SaaS platforms, the right choice will depend on a reseller’s customer needs for design, maintenance, security, etc. There are now very effective plug-ins for site builders and CMS platforms like WordPress, as well as feature-rich stand alone shop packages. A fully managed white label SaaS platform will deliver the end user a high quality, robust, all-inclusive service whilst freeing up the reseller to focus on sales.
The best platforms make powerful e-commerce solutions plug and play. It is essential that your e-commerce partner works hard to evolve in line with all the best and fully localized integrations, payment and shipping methods and apps that shoppers demand.
Philbert Shih of Structure Research, a leading analyst to the cloud industries agrees. “To keep up with the requirements of online retailers and their customers, the best e-commerce platforms will have to be current with features and functionality related to payment and shipping features. Today’s demanding consumers desire and trust only the latest tools,” he said. “This is crucial to the user experience, which in turn goes a long way to determining success for merchants”.
Of course, successful merchants will mean successful resellers. Customers that thrive will seek further e-business products and services. Partner with a global-scale provider whose experience and technology partnerships benefit you. For example, SaaS platforms with their own Apps Store and development programs can deliver your customers timely access to the latest tools for competitive advantage online.
For the reseller, the right e-commerce partner will offer a multi-discipline, integrated approach to implementing or modernizing your shop offerings. Consult the e-commerce platforms that specialize in serving the hosting and telco space. They naturally prioritize your needs as a reseller. You should expect tailored consulting, solution design, technical implementation, and application management and marketing. The best e-commerce partners will be also able to offer you quality white-labelled options for hosting, design services and customer support.
With so much potential to share in the retail success of your hosting customers, now is certainly a wise time to scope out your options.
Join me at HostingCon Tuesday, July 26 to learn more about how e-commerce can grow your hosting or service provider business. I will discuss e-commerce market growth more in depth and share how to take advantage of it to grow your business in the session, “How Service Providers Can Take Advantage of the Booming E-Commerce Market.”
