Is it worth opening an eCommerce store in 2024?

eCommerce has become a crucial part of global retailing and our everyday lives as consumers, but does that mean the market is reaching saturation or is there still opportunities for success?

UK eCommerce Market

  • $6.3 Trillion USD
    estimated value of eCommerce in 2024
  • 9% CAGR
    between 2022-2027

There have been a number of factors helping to accelerate eCommerce sales in the last 10 years. From the widespread adoption of smartphones to the covid pandemic, the trend has been overwhelmingly positive leading to approximately a 38% share of retail sales in the UK taking place online, and over 60 million users in 2024. Predictions for 2025 onward suggest this upward trajectory will steadily continue, driven in part by mobile and social commerce. By 2027 the value of global ecommerce sales is is expected to reach $7.9 trillion USD.

In 2023, this growth attracted over 67,000 new businesses in the UK, bringing the total number of sellers to 163,278. Despite this, it is reported that up to 90% of eCommerce businesses fail in the first 120 days – similar to start up success in other industries – this is mostly due to a lack of research and planning prior to launch, resulting in unexpected costs, compliance issues and operational challenges.

The key takeaway from this, being it is crucial to fully investigate the market before starting your business. Keep reading for tips on what to look for,

Is the eCommerce market saturated?

When looking at starting an eCommerce business its important to consider the trade off between established demand and market saturation. With digital spaces, especially marketplaces like eBay and Amazon, it can be incredibly difficult to ringfence your products and stand out from competitors when you have 500+ results for the same product search and the same listing fields in which to convey your message, particularly if you are selling items that can be considered homogenous, or you have little brand recognition.
The level of competition/ saturation will vary between categories and products so it is crucial to conduct thorough research before you begin trading.

The 4P’s of marketing for eCommerce businesses

To ensure your ecommerce business is successful you need to have a good product, with plenty of demand and solid profit margins. One way of breaking this down is into the 4P’s – Product, Place,  Price, Promotion – or simply, what are you going to sell? Who is your audience? Where are you going to sell?  How are you going to sell it?

Product – What are you going to sell? How are you sourcing them? How many products are you going to start with? It is unique in anyway from what already exists? Is it a one-off purchase or something that will be re-ordered regularly?

Place – Where are your audience shopping for these goods? are you going to establish yourself as a brand and sell exclusively though your own website or are you going to play the marketplace game? How many sales channels are you going to be managing and how? Are the marketplaces growing? Are you selling in the UK or EU? How competitive is it for your products in this place?

Price – What is the market price for the items you plan on selling? Are you going to be selling above or below this? What is your profit margin? Have you considered fixed costs, delivery, customer service and discounts?

Promotion – How will you get your products recognised? Do you need to do SEO, google or meta ads, or do you need to do keyword research specifically for the marketplace? Do they offer an advertising platform like the Amazon buy box? How important are reviews and what KPIs do you need to track to ensure your products are visible? Is there any seasonality at play?

 

Once you have a clear picture of the market you are selling into and the products you are going to offer its time to consider the tools you need to get there including the costs, set up time and ongoing management requirements.

⇒ VAT numbers?

⇒ eCommerce platform?

⇒ Channel management tools?

⇒ Stock management system?

⇒ Courier/delivery partners?

⇒ Customer service platforms?

3 Ways to make your eCommerce business stand out in competitive markets:

Delivery

Free delivery thresholds and delivery as a service are common practice now a days so shoppers are likely to shop around if the same product is available with cheaper or more convenient delivery elsewhere. Offering an express option can also be a great way to capture high intent buyers.

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Personalisation

Product recommendations can be a great way to make your products stand out from the crowd and this is well demonstrated on platforms such as Amazon or within the beauty industry. Quizzes, colour matches,

 

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Shopping experience

Virtual reality, live streaming, 3D product imagery or anything else you can do to heighten the shopping experience and provide a more unique experience for your customers can help to not only stand out from your competitors as a business,  but also help buyers to feel like they have a better understanding of what to expect and the main benefits of the product, making them more likely to try new products and complete the purchase.

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