From smart electronics and household goods to artisan decor and clothing, e-commerce plays a significant role in today’s marketplace. And yet, major growth is ahead, particularly for SMBs.
The e-commerce industry is poised to account for 10 percent of U.S. retail sales in 2018, or $526 billion. By contrast, overall expected growth for U.S. retail is 3.7 percent, or $5.3 trillion. And, with four of the 10 largest internet companies in the e-commerce space, it seems there’s no ceiling capping e-commerce’s potential to provide more SMBs with seats at the table.
These five encouraging ecommerce stats for SMBs underscore this fact.
- E-commerce will grow to represent 12.4 percent of all U.S. retail sales in 2020.
The steady ceding of overall retail revenue to e-commerce is an inevitability.
- More than 300,000 U.S. SMBs started selling on Amazon in 2017.
Amazon is growing to epic proportions, and its model is helping feed a lot of SMBs as well. These companies are taking advantage of Amazon to sell products, while using its fulfillment services and global logistics network to get their items to customers.
- More than 140,000 SMBs surpassed $100,000 in annual sales on Amazon
Amazon is the Goliath, but half the products customers buy on it actually come from entrepreneurs and small business owners. This model funnels revenue back into local communities, creates jobs, and supports local suppliers.
- Small Retailers saw a 30 percent higher conversion rate via smartphone than large companies.
This is phenomenal news for e-commerce SMBs. Big brands have traditionally dominated in physical stores and online, but it appears the internet is leveling the playing field a bit. With smartphone usage continuing to rise in the U.S. and around the world, this only means future growth opportunities for SMBs.
- There will be 190.3 million digital buyers in the U.S. in 2018 (69.9% of the population), up 3.2 percent over last year.
That’s a lot of spending power. Then consider that a lot of people not yet considered “digital buyers” have grown up exclusively with smartphones and internet, meaning once they get money of their own, that’s exactly how they’ll spend it.
How SMBs Can Find Their Niche
There are simply fewer obstacles these days in an SMB’s path to success. Consumers aren’t as biased toward big brands online like they’ve been in physical stores. It’s also easier than ever to create personalized, branded websites without making a massive investment, thanks to cloud e-commerce software.
Being creative in filling market gaps, offering the best user experience for the consumer, and transforming a traditional transaction into a life experience will position SMBs to get a generous seat at the large table of worldwide e-commerce.
SMB Success Stories
Look at Birchbox, while these days far from a SMB, they weren’t when they disrupted an already saturated beauty care market, offering pampering products personally tailored to each subscriber. Birchbox reinforces the customized experience to current and prospective subscribers by broadcasting people opening their Birchboxes on Facebook Live.
Then, there’s Dollar Shave Club, a pioneer in offering ho-hum products in a memorable way. They won the market over because of the experience they provided consumers, not the actual razors and shaving accessories they sold.
As far as being strategic and filling gaps, consider the case of Jim Barron, an internet entrepreneur thriving off Amazon’s marketplace. Barron’s sniffed out a profitable and sustainable niche for his online business. He finds existing products selling well with little competition, buys generic version and gives them a branding facelift. The method has transformed his business from non-existent to $15,000-plus in monthly sales.
These five encouraging ecommerce stats demonstrate the market, while experiencing major growth in the past decade, is just getting started. Though giants currently dominate the space, there are many opportunities for smaller players to get theirs too. As long as SMB brands are getting personal, being memorable, and staying relevant, there’s major growth to be had.
