Online shopping is being embraced by more and more people everyday and everywhere. The convenience it offers to consumers is unquestionable. One can shop regardless of where s/he is and whenever s/he wants.
But looking from the business perspective, the whole picture is not that bright. Why? Here are few reasons…
1) Impact of “word of mouth – WOM” is not so strong:
The product has to wait for a comment from a satisfied customer for the “e-shop” to be able to display it. E-commerce sites work really hard on obtaining that positive comment by sending reminding e-mails, for instance. Even if that positive comment comes, most of the time it is an anonymous recommendation as most of the online shoppers would not know that satisfied person.
2) Personal sales consultancy is lacking:
One can write all the technical information on the products on the web site and even can make an online customer services available alongside a 24/7 call center. Still, the probability of convincing a prospective client is not comparable to a case where a “person”, whether it be a close friend or an acquaintance recommends and provides all these services. The big advantage in the second is narrowing down consumers’ options with the right information, by the right person.
3) Distribution can be a headache:
For customer satisfaction, we all know that fast and reliable distribution is crucial. This is even more so when the customer wants to return the products. As it has been in Lamoda’s case, a company selling clothings in Russia via the Internet, distribution might be a real challenge and can only be overcome via “real people”. In Lamoda’s solution, customers are allowed to try on their orders for 15 minutes, and after that they can accept or return them. If they wish to buy, they can pay in either cash or credit card to the courier.
4) Maintaining loyalty is difficult:
In today’s highly competitive world, customer retention is of utmost importance. There are many marketing methods being employed by e-commerce sites to have the customers stay with them. However, loyalty is bound to end whenever the client finds an alternative provider as soon as s/he spends the “reward points” accumulated, for example. On the other hand, we know from our own experiences that many of the times we do not choose to leave an “offline provider” even if we know that it would be wiser to do so.
5) No “real incentives” are involved for promoters:
While there are so many people out there looking for full-time or part-time income opportunities, online shopping sites do not make use of this. Affiliate programs, regardless of how professionally planned and managed, are far from filling this gap. There are numerous people in the world who have been making varying amounts of money through direct selling for a long time. How many people do we know who are doing affiliate marketing for similar lengths of time?
Turning to the other side
Certainly, there is also the other side of the coin. Direct selling companies, too, have a lot to learn from the best practices in e-commerce and to incorporate them into their businesses.
Whether a person makes a purchase to resell or to personally consume from a direct selling company’s web site, this in fact, is online shopping. And it is to the very much benefit to the companies, to include all the facilities (e.g. “cross sell”, “upsell,” “those who bought that also bought this”, to name a few) that we come across while shopping at Amazon or Lands’ End. Honestly, the whole user experience in direct selling companies’ e-shops is really poor when compared to a big majority of B2C e-commerce sites.
This is definitely an area for improvement for direct sellers. Those who have not done it yet, might start working on this by pulling the shopping pages from “restricted area” (i.e. the consultant dashboard) to “public area”.
E-commerce and direct selling have been considered as rivals or at least absolute alternatives to each other by many people. As you can see, there are lot of opportunities in their convergence, though. And those who succeed in converging e-commerce and direct selling will surely outpace others.