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COVID-19: New Opportuinites for E-commerce Businesses to Grow During This Pandemic
Covid-19 has brought along many uncertainties (and unhappiness) but it has also created new opportunities and fast forward some things that would probably have taken years to achieve. The world of e-commerce is one of those “things” that has been accelerated by the coronavirus, and the whole concept of “Going Digital” seems to be more readily accepted now.
E-commerce does not only help businesses to reach out to a greater number of customers, but it also expands the borders to other countries around the region. Even as worldwide economies are disrupted by the pandemic, your online business can continue to grow, expand and achieve new heights if you have the right strategies in place.
Based on 2019 data, about 85% of the total population in Singapore uses the internet today. Almost three-quarters of users between the ages 16 and 64 are shopping online, and spending on items such as clothing, electronics, groceries, furniture and toys. Total online spending in Singapore amounts almost S$13 billion, and it has increased by more than 20% in 2019 compared to the previous year.
If you are an ambitious business owner, you would definitely want a slice of this growing e-commerce sector too. And in case you are wondering - No, we are not here to tell you how you can achieve million dollar sales on Amazon or Lazada.
But by setting your fundamentals right, and taking advantage of Government support and subsidies, you may find yourself on the right track to reaping the benefits of e-commerce and, of course, profits for a long term sustainable online business.
Build a Strong and Trustworthy Brand
Having a strong foundation is the most basic and important step for whatever we plan to build on it. Businesses that continue to do well in an economic downturn like this Covid-19 pandemic are those that have a strong branding to differentiate themselves from their competitors. They have a reliable identity that makes them able to effectively communicate and form an emotional connection with customers.
The core identity of your e-commerce business should be consistent and relevant with the brand image you are portraying, and you should be able to show how your products are better than your competitors.
Regardless of how the economy is doing, your brand message, value proposition, benefits and actions should reflect your brand’s relevance and give you a purpose to tap into a consumer’s emotions. This gives you the opportunity to retain consumers’ brand loyalty and have a lasting impact on their behaviours and the brands they choose in the long run.
Provide Real Value to Your Customers
Covid-19 has greatly affected the businesses of traditional brick and mortar retailers, and overall consumer spending usually declines due to economic uncertainty. However, with the convenience of online shopping, consumers are still able to shop anytime and anywhere, even during Circuit Breaker previously.
Nonetheless, consumers are still worried about losing their jobs and having pay cuts during this period. Consumers may be more wary before making an online purchase compared to before, and this could adjust their spending habits for the next few months if the situation does not improve. Hence, e-commerce business owners who are able to provide more immediate value to consumers to offset this will be able to attract more customers.
Besides offering special sales and discounts, e-commerce business owners can consider waiving off shipping charges or throwing in a bonus item with every purchase. Focusing on the price point helps to relieve consumer buying anxiety at the point of purchase.
For effective results, e-commerce businesses should target their existing customers as the costs spent on retaining existing customers is lower than the costs spent on acquiring new customers.
Digital Marketing Tools Available for E-commerce Businesses
There are a few ways to boost your brand awareness through digital marketing tools such as SEO, content marketing, and social media. Being highly effective at communicating your brand values and reaching out to the right target audience is an art that all e-commerce business owners need to learn.
Businesses looking to grow online can tap on the E-commerce Booster Package by Enterprise Singapore, which comprises the Digital Marketing Programme. This package aims to help businesses enhance digital marketing capabilities, increase brand awareness and sales conversions.
E-commerce businesses will receive funding support of up to 90% for digital marketing advisory services for 3 months, and an additional one-time support of up to 90% of qualifying manpower costs for 3 months, up to 3 Singaporeans / Permanent Resident employees directly involved in the project.
The programme covers online Masterclasses over 6 phases in 3 months, with consultation calls and planning twice a month, and practical hands-on live streaming sessions. This programme costs S$10,000, whereby S$9,000 (90%) will be funded by Enterprise Singapore. E-commerce businesses only pay S$1,000 for marketing media / influencer fees.
Retailers and businesses that are interested to grow their online traffic and sales through social media can fill in the Interest Form here. Last day of application is 30th September 2020. [ENDED]
Keep Operation Costs Low and Strengthen Margins
As with any business, reducing fixed costs and overhead are key to long-term survival. While it may be tempting to expand your business when times are good, it is important to keep your operations lean so that your business will be better prepared should any financial setback occur.
One way to reduce overhead is to outsource certain tasks. For example, for tasks that do not require a full-time workload, you can outsource it to a freelancer, who is able to offer services when needed, rather than being a fixed expense.
Taking advantage of Government support such as the abovementioned E-commerce Booster Package also helps to reduce marketing costs.
By effectively reducing your overheads, it means that you do not have to sell as many items to make a profit, or you might even be able to lower your price to be more competitive. This way, even if sales were to slow down, you can still maintain positive margins. Most importantly, nevertheless, by reducing price, make sure it does not come at the expense of your ability to provide quality products to your customers.
An effective brand strategy gives you a major edge in this increasingly competitive e-commerce market. The impact of this economic downturn due to Covid-19 will likely have a lasting effect for a long time to come. E-commerce businesses will continue to face new challenges and new changes that can either escalate their growth or become stumbling blocks. By building a strong and trustworthy branding, and having in place the right strategies, e-commerce businesses can reduce their risks of failing, and continue to scale and provide greater value for the economy.