2 Things You Didn’t Realize Affect Your E-Commerce Sales
Identifying everything that affects your e-commerce sales is a daunting task that just might be impossible. However, here are two uncommon factors you probably haven’t considered:
1. Current Exchange Rates
When an overseas customer buys products from the U.S., they’re not going to pay the same amount as they would in their country. Exchange rates are constantly fluctuating and can reach an all-time low (or high) that will affect sales. If this fluctuation isn’t taken into account, merchants can fall short in their efforts to reach global markets.
U.S. customers making a $50 USD purchase on Monday will pay the same price as those making a purchase on Friday ($50 USD). However, your overseas customers might have to pay more on Friday than those who made a purchase on Monday. How is that possible?
On Monday, $50 USD might be worth €42 (Euros), but by Friday $50 USD could be worth €60. If the U.S. dollar is steadily losing value against the Euro, and your market’s currency is the Euro, you’re going to see some fluctuation in sales.
The value of currency is controlled by the supply and demand for foreign exchange. You can better understand by taking a quick peek at how Forex trading works.
No Currency Has Inherent Value in an Exchange
Traders will say they’ve bought specific currencies, but a currency alone has no absolute value — currencies are always traded in pairs and valued against another currency.
Forex traders explain the inextricable connection between two currencies when trading. “A trader is actually buying or selling a currency pair and not a currency per se, even though, when traders are referring to the positions they have or they want to open, they're saying that they bought Euro, or the U.S. dollar, etc., when in reality they bought the Euro against another currency.”
In other words, the value of any currency is always relative to another currency. The value of a particular currency is influenced by demand, and demand is influenced by trade.
If your target market’s currency is weak, you may need to lower your prices.
2. A Customer’s Drive to Thoroughly Research a Product
Data from eMarketer predicts that by 2018, retail e-commerce sales will make up less than 9 percent of total retail sales in the U.S. That’s an upward trend, but what drives this data might explain low sales and abandoned shopping carts.
Consumers shop online, but they don’t always make their purchase online. Many consumers use e-commerce websites to compare prices and features, and read reviews before buying in-store.
The eMarketer article linked above explains, “According to a November 2013 survey of U.S. digital shoppers by consulting firm Accenture, 78 percent of respondents reported ‘webrooming,’ or researching online before heading to a store to make a purchase.” The same study found that 72 percent of respondents “‘showroom,’ or buy digitally after seeing a product in a store.”
This data suggests that some consumers might not have a preference for making their purchase online or offline. Instead, they’re using both platforms to research their intended purchase in order to make the right choice. Where they buy depends on where the best deal is.
In order to survive in the digital marketplace, you need more than just a good website and excellent customer service. Consumers are looking for the best deal, and that includes more than price. Your products need to be competitively priced, but also well displayed on your product pages.
The “better deal” could be as simple as providing better product photos and detailed information that helps consumers make a more informed purchase decision.
Larry Alton is a freelance writer, whose work regularly appears in Huffington Post, Entrepreneur, Inc. and Adweek.