Top E-commerce Outsourcing Questions Answered for You!
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From processing the first online purchase almost 25 years ago to being a $5 trillion industry in 2020. The success of global e-commerce is not just a story but a phenomenon that occurs once in a while. Powered by the growth of Fintech, the global e-commerce industry is growing annually at 23%. In 2018-19, the e-commerce industry accounted for 17% of entire retail transactions and is expected to cover 95% of all retail transactions by 2040.
With 25+ unicorns, the e-commerce industry is catering to the multiple needs of common people and businesses. While B2C platforms are delivering items as small as paper-cups, B2B stores are helping businesses import heavy machinery from other countries.
Together B2B and B2C are rendering brick and mortar stores obsolete. The industry has gained momentum after players like Amazon and Alibaba created a customer experience that is close to impossible to replicate in physical stores.
In the coming times, e-commerce stores are expected to utilize virtual reality, artificial intelligence, and machine learning to offer a highly personalized experience. Here are some data that explains, why e-commerce is the future:
- 2.05 billion people are expected to buy from online stores in 2020
- 72% of users prefer Amazon over Google for product discovery.
- 96% of Americans have made an online purchase
- 85% of orders generated from social media occurs through Facebook
- Amazon accounted for 44% of all e-commerce sales in the US during 2017-18
Why Outsourcing is Important for E-commerce Industry?
E-commerce stores have revolutionized the way, people browse, shop, or suggest products. Online shopping has made it easier for people to research, find and buy products from the comfort of their homes. The industry is now leveraging technologies like machine learning, augmented reality, and IoT to further improve our shopping experience.
Lenskart, India’s fastest growing eyewear online store leverages augmented reality technology. Customers rely heavily on augmented reality setup to identify eye gears that suit them the best. Similarly, Amazon recently introduced the Dash button powered by IoT technology. One-click and you can place your order with Amazon using Dash buttons.
Every organization is made up of processes that are repetitive and of processes that require innovation. While innovation requires a defined skill & mindset but repetitive processes be handled to centers that have employees trained to carry out these tasks.
Increases focus on Core Processes: Executives and other leaders can use their available free time to focus on business planning and taking the organization forward. Outsourcing data analysis and dashboard creation to subject matter experts help them streamline their days and find time to focus on work that matters.
Impacts Downline Positively: 59% of companies from around the world use outsourcing as a tool to cut overall business costs. By reducing the input cost, outsourcing automatically impacts the profits generated. On the other hand, leveraged subject matter expertise of outsourcing partners helps the organization offer better support, improve accuracy and generate more leads, which reflects positively on the balance sheet.
Also, outsourcing organizations share performance reports at regular intervals, which establishes a much-required sense of responsibility among peers.
E-commerce Platforms that have leveraged Outsourcing to grow
- Amazon has over 100,000 registered partners for catalog creation and management
- eBay has outsourced seller onboarding to BPOs with a presence in multiple provinces of numerous countries
- Flipkart earlier relied on third-party logistics partner to offer door-to-door delivery & pickup
What Processes are Outsourced Mostly by E-commerce Players?
1.Catalog Creation
The catalog is structured data that is easy-to-use, responsive, and educative. Catalogs are used to either highlight a product or offer a better understanding of a subject. E-commerce platforms use a catalog to showcase their wide array of assortments in a simplified manner. An e-commerce catalog generally includes Product Description, multiple attribute values, quality images, Call to Action buttons, and customer reviews.
Catalog creation is undoubtedly the most integral task; if not done right, it can mess up the on-site search, search engine ranking, lead to increased return rates and jeopardize the entire future of an online store.
Catalog creation involves a lot of important tasks like:
- Category definition
- Product Description
- Image Management
- Adding Call to Action buttons
- Putting up product recommendation tabs
- Bracketing of products based on the category they belong to
2. Content Writing
Unlike retail stores where salesmen and printed pamphlets are used to help customers understand the intricacies and benefits of the product, online stores rely on content for pitching products. Content for e-commerce stores often includes product descriptions, images, and videos. While videos are one of the most prominent upcoming trends, product description and quality images are the all-in-all for online stores.
- Important tasks related to content writing are
- Creating intriguing product titles
- Unique content
- Focus on the product’s USP
- Optimized for search engines
- Meta Description and Heading tags like H1, H2
When creating a product description, it is necessary to avoid plagiarism because it impacts search engine rankings. Industry experts recommend creating fresh and unique product descriptions because customers love interactive content. By creating content that is luring, interactive and educative, e-commerce stores can offer a better understanding of the product.
3. Catalog QC
The prime challenge for e-commerce is not its competitors but lower conversions. Only 2.86% of e-commerce traffic converts and almost 30% of products purchased online are returned.
Lower conversion rates and higher return rates are perhaps the biggest dilemmas for an e-commerce enterprise. Amazon India said “It sees a direct correlation between returns and products that have poor descriptions, details, and photos”, and it makes sense. Poor catalog fails to assist customers to make informed decisions while incorrect attribute values create the wrong perception of a product, which leads to return.
Why Outsourcing Seller Onboarding Makes Sense?
40% of all e-commerce searches start on Amazon, you know why? Because Amazon has over 12 million products listed on its platform. With thousands of sellers from around the world selling on Amazon, it allows users to find the most relevant product within seconds. If you are willing to have a higher conversion rate and improved customer lifetime value, then you will have to start with seller identification and onboarding.
Here’s how seller identification and onboarding are done
- Competitor benchmarking: Industry players gauge top sellers on social media and other marketplaces.
- Once sellers of missing products are identified, they are contacted.
- Sellers with missing products are offered to join the marketplaces.
- Marketplaces also offer incubation support to potential sellers with no past selling experience.
- Interested sellers are then onboarded and provided with the requisite seller support to have a smooth selling experience.
Competitor benchmarking and social media analytics are intricate processes through which potential sellers can be identified and onboarded. Such tasks require an increased investment of time and resources. There are industry players who have created a paradigm that simplifies the identification and on-boarding of potential sellers. Relying on these proven players can help marketplaces increase the breadth of assortment offered on their platform.
What are Common E-commerce Outsourcing Concerns?
Trust issues: E-commerce is a nascent industry, handing over confidential data to third-party poses serious threats. The importance of these data is so high that it can jeopardize the future of the platform if hacked.
Solution: Get in partnership with an enterprise that has furnished the requirements for compliances like ISO 27001 and PCI DSS. The certification ensures that the enterprise follows standard practices and abides by data privacy norms. Look for ISO 27001 Certification when outsourcing processes.
Vulnerable to quality control: The E-commerce industry is so popular because it has solved a very muscular problem. Now industry experts are vulnerable to quality control, they believe outsourcing will impact the quality of output.
Solution: In 2020, Tailored Outsourcing is one of the biggest BPO trends. Through tailored outsourcing, BPO enterprises are building a team of subject matter experts headed by industry leaders. Such teams are well-versed with the industry practices and are experts at problem-solving.
Loss of control: Businesses believe the “outsourcing process will reduce our control over the process”. Since the e-commerce landscape is quite unpredictable, businesses want to be in control when something goes wrong.
Solution: “Loss of Control is an advantage”. Yes! By letting BPOs with experienced industry players handling the processes, e-commerce platforms can be sure that they will manage every solution. BPOs often leverage new technologies to solve problems.
What is the Impact of Fulfilment Outsourcing on E-commerce Growth?
66% of the top 10,000 Amazon sellers use “Fulfilled by Amazon (FBA)”. Now imagine, Amazon managing a fleet of vehicles responsible for procuring packages from sellers and depositing them at Amazon’s warehouse. It is basically like Amazon running an in-house Uber.
No matter if you are small or as big a platform like Amazon, you must outsource these “fulfillment and return pickups” to focus on core processes. By outsourcing the transport wing to an industry expert, e-commerce platforms can ensure timely and safe transit of packages to and fro.
The Impact on E-commerce Growth
Outsourcing entire logistics to an industry leader will help e-commerce platforms streamline their product delivery. Benefits of outsourcing fulfillment and return:
- Outsourcing will also bring in the requisite efficiency and e-commerce platforms won’t be dependent on the seller’s mercy for shipping products on time.
- Facilitate easier returns, which involves one-to-one pickups.
- Offer faster delivery options
Which Countries have Maximum E-commerce Portals?
Countries with the most e-commerce players
- United States (284,956)
- Germany (40,636)
- India (10,323)
- United Kingdom (54,325)
- Canada (27688)
Why is E-commerce Image Processing Necessary?
High-quality images are a necessity because poor images contribute to 22% of returns. Customers rely more on images than product descriptions when deciding. Adding multiple images from the varied angle is perhaps the most common best practice but there are multiple other standards like:
- Images should have no colorful or flashy backgrounds
- Images should have an only white background
- There should be no logo or watermark on images
- Sellers are not allowed to leave their website link on images
- Images should adhere to internal and international guidelines
- Stock images are not allowed on e-commerce marketplaces
- No blur images only high-quality images are allowed
To carry out such a mundane task for millions of images will waste the time of valuable executives employed at e-commerce organizations. Outsourcing such repetitive tasks to organizations that have employees trained to carry out these tasks daily with incomparable consistency is a game-changing decision.
Why Logistic Outsourcing Makes Sense for E-commerce Industry?
E-commerce has turned logistics into a two-way street. Earlier businesses just delivered huge orders through freight logistics but the modern-day online stores also offer “no-question asked returns”, which puts additional pressure on logistics.
Players like Amazon and Flipkart have established their own logistics entities in India to cater to the last mile delivery requirement of crores of people. While leading players are acquiring logistics companies to support their growth, nascent e-commerce players can rely on third-party logistics companies for delivering products on time.
An industry leader handling logistics for your platform will help you concentrate on other important tasks. Since logistics involves the management of multiple delivery agents and shipments, it makes sense to let an expert handle it.
How Outsourcing Catalog Management Benefits?
To make e-commerce catalogs resolute and effective, both in-house and outsourcing teams do the same thing. Companies often outsource to save time and get work done faster. E-commerce players can carry out these processes on their own too. Here’s how to do it:
The success of e-commerce platforms can be best described by this equation
E-commerce Success= Right Discovery X Quality Catalog
If you take care of the product discovery, catalog quality, and customer support, nothing is stopping your digital platform from becoming a unicorn. Let’s look at the most important aspects of catalog management.
Identify and add new products: While betting big on best-selling products is essential and has its additional set of benefits, it is also important to gauge trending products and add them to the problem.
For example, The Corona outbreak made products like sanitizer, masks, disinfectants, face-shields, and hand gloves popular. Early only a handful of marketplaces were selling it. If you miss the opportunity to identify these popular products and add them to your platform, you will lose loyal customers.
Your loyal customers will first come to your platform looking for these products and if they don’t find them there, they will go to other platforms and take their loyalty along with it.
Create Pages with Targeted CTAs: When creating a landing page, one needs to identify the purpose first. Explore whether you want to collect emails, promote application download, or drive sales through a landing page and then start creating it.
When the focus is on the end goal, it gets easier to identify elements that can make or break the landing page. With the motive in mind, you can easily create Call to Action buttons that appeal and ensure conversion.
Also, with a clear idea of the end goal, one can easily identify CTAs that will work. CTAs that are meant for collecting emails will have a different copy than the one meant for driving sales. Start with an image of the final product in your mind and you will never go off track.
Run Quality Checks: Incessant number of return coaxes users into stop buying from a site. India’s e-commerce unicorn Snapdeal had to close its operations temporarily when it ran into issues with sellers who were selling fake or imitated products. Customers filed complaints and requested returns, which led to the downfall of this e-commerce marketplace. Snapdeal had to downsize, receive fund cuts, and whatnot.
Running quality checks is important because it renders all kinds of cheating, fraud, and conceiving attempts redundant.
Write Engaging Copies: You have only fractions of seconds to convince a customer to buy from you. While images can help you portray the product in the best possible way, engaging copies will help you highlight the additional features of the product.
The well-written product description has a lot to contribute, they help customers different the right product from the crowd.
Leverage Attribute Values: Undoubtedly the most important aspect of catalog management. E-commerce executives often refer to this as catalog enrichment. The process involves the allocation of the right values to products to facilitate
- Better on-site ranking
- Improved search engine ranking
- Removal of errors like brand interference
- Improve cross-selling and up-selling opportunities
What are Other Processes E-commerce Players can Outsource?
1. Seller Grievance Management
E-commerce organizations must have two different teams for seller onboarding and seller support because the two tasks are highly volatile and can have an immense impact on the future of marketplaces. It is the sellers that make a marketplace valuable to customers, with sellers there’s no product and there’s no customer, traffic, conversion, or revenue.
With a well-established seller grievance management system in places, marketplaces can:
- To help customers get in touch with sellers and control return rates
- Help sellers minimize damage and losses due to frauds by customers
- Help sellers offer an incomparable on-site and post-sale customer experience
2. Customer Service
In the age of omnichannel customer experience, 84% of customers agree to never shop from a site that offers a poor experience. Customer experience is now the key differentiator and not investing heavily in is going to cost businesses a bomb. Over 50% of organizations are diverting their marketing funds towards customer experience innovation.
E-commerce marketplaces with limited funds in hand can rely on outsourcing to bridge the gap between their customers and quality experience. Outsourcing customer service makes sense because:
- Outsourcing agencies work to streamline data from channels like chat, email, social media, and call to offer incomparable omnichannel support.
- They help businesses get rid of data silos and increasing overall efficiency
- They leverage the latest technology like AI and ML to predict the future steps of a customer
3. Platform Management
A few things that make an e-commerce platform successful includes:
- On-site search
- On-site search results
- Error-free catalog listing
To create an exceptional on-site search experience, organizations need to invest heavily in catalog creation that includes content writing and image management. When catalogs are properly defined and content requisite information, it gets easier for search engines to rank products in results.
Product Discovery: The event of finding a product on an e-commerce platform is called product discovery, the time spent in finding the right product is called product discovery time. Improving product discovery has incomparable benefits like:
- Helps Customers Find Products Faster
- Improves Customer Experience
- Increases Cross-selling
Optimizing searches and improving product discovery makes sense because customers are marred with options. Improving product discovery helps online stores convert traffic into sales, helping customers find the right product is important.
4. Payment Fraud Management
Some of the most popular frauds that occur in the e-commerce industry are
- Credit Card Fraud
- Friendly Fraud
- Card not Found Fraud
- Triangulation Fraud
- Credential Stuffing
- Returning Fake Product Fraud
- Chargeback fraud
E-commerce managers can’t fight all these frauds without developing in-house cybersecurity capabilities. Developing internal expertise will require enormous expenditure whereas outsourcing payment fraud management will cost very little.
What are Some E-commerce Statistics that Explains the Challenges?
The below-mentioned statistics showcase the biggest challenges faced by e-commerce players today
- Only 2.86% of e-commerce traffic converts into a purchase
- 69% of shopping carts are abandoned
- 33% of all purchases end up in return requests
- 80% of people are not willing to buy from a store that offers a poor customer experience
- Additional shipping cost and a hectic login process are the biggest reasons for cart abandonment
Some e-commerce statistics that portray a prosperous future are:
- 2.05 billion people are expected to buy from online stores in 2020
- 72% of users prefer Amazon over Google for product discovery.
- 96% of Americans have made an online purchase
- 85% of orders generated from social media occurs through Facebook
- Amazon accounted for 44% of all e-commerce sales in the US during 2017-18
Final Thoughts
The E-commerce industry has only redefined the way people buy products but has also changed the basic definition of quality customer experience. It has changed the way customers seek support from Telecom organizations, customers today want support executives to call at a time provided by them.
Such paradigm shifts are impacting the other common life decisions and it is a sign that e-commerce is here to stay. Soon, e-commerce players will have to keep up with the innovation to ensure market dominance because a pool of start-ups with deep pockets and the latest technology are lining up.
By leveraging outsourcing as an integral part of the e-commerce atmosphere, players can aim for improved conversion and customer retention. Outsourcing important processes improve efficiency and offer customers a memorable experience.
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