The good news is that getting loyal customers is not that hard. In fact, 56% of customers are ready to spend more money on brands they are loyal to, even if there are cheaper alternatives. 

Thankfully, there is an easy solution to creating a loyal customer base. All you need to do is build an adequate loyalty program, and people will start following. Actually, this will not only build you a loyal customer base but will also help increase your reach and boost your sales. 71% of Gen Xers, 70% of Millennials, 63% of Baby Boomers, and around 62% of Gen Z customers say they would choose a brand with a loyalty system over one without such. 

So, needless to say, you need a Loyalty program. Now, let’s talk about what a Loyalty program is, what types there are, and how to build one that will secure all the benefits. 

What is a customer loyalty program?

As the name suggests, a loyalty program is a system that rewards your customers for their loyalty. In essence, you stimulate them to take different actions by giving them additional benefits like discounts, exclusive access to products or services, or others. 

Many coffee shops that value their customers offer a stamping card with the promise that every tenth cup of coffee will be free. This may sound like a waste of money to some business owners. But a cup of coffee every now and then will pledge you a customer’s loyalty, which is essential for a business in a highly competitive niche as operating a coffee shop. This way, you push your customer to disregard convenience and choose practicality. Thus, the coffee shop will retain a valuable customer, who will continue spending with them for at least another 9 coffees.

The rewards are usually based on a point system, where each point gets you closer to the desired prize. The program will increase your sales among your customers without fail, as buyers tend to spend more and do it more frequently. 

Of course, you are not creating a loyalty program out of the goodness of your heart. You are doing it because it’s highly beneficial to your business in more than one way. 

Why do you need a loyalty program?

A customer loyalty program is not just a whim. It’s a secure way to ensure your customers will remain engaged and will come back for more. From the outside, it may look like you are wasting money, but that couldn’t be further from the truth. In fact, you are investing in several benefits that will bring you exponentially more profits in the long run. 

Better customer retention

88% of customers who feel appreciated will stay loyal to a brand. Additionally, 83% of customers will spend more on a brand they are loyal to. This means that a loyalty program will not only increase your customer retention drastically but also increase the customer lifetime value (CLTV). Done right, a loyalty program can hook a customer for the long run, make them happier, and build your own unique relationship with the set customer. 

It’s highly cost-effective

Usually, businesses calculate the customer’s value by subtracting the CLTV from the Customer acquisition cost. Many companies, especially with low-price products, often spend more on acquiring a customer than they gain from a single purchase. Thus, retention is a must. A research has shown that acquiring a new customer is between 5-25 times more expensive than providing your customers with additional value.

Thus, loyalty programs are far more cost-effective than constantly producing ads or brand awareness campaigns. A single discount card will do wonders for customer retention, provided you satisfy the customer’s expectations in the first place. 

More reviews

Customer reviews, as you already know from our dedicated article, are essential to your business’s success. They boost your SEO, impact your sales, skyrocket your credibility, give your products invaluable social proof, and attract attention. So, a customer loyalty program that will incentivize writing reviews will bring a lot of value for what’s essentially a small gift. 

More customer referrals

A good loyalty program spreads like wildfire. Your customers will always brag about the great deals they land. Offering them a loyalty reward that will make them feel valued will certainly push them to tell their friends and family. Many novice business owners entirely disregard the power of word-of-mouth marketing. However, this type of advertising currently drives nearly 6 trillion dollars of customer spending per year. Not to mention, every person is about 90% more likely to trust a brand recommended by a friend or family member. 

What types of loyalty programs are there?

There are several types of loyalty programs, each one working best for different types of products and services. Naturally, the loyalty program type you choose depends heavily on your desired outcome. 

Point-based programs

By far, it is the most common type of loyalty program. Its cost-effectiveness is unparalleled, as customers receive points for every purchase. This means they get rewards based on how much they have already spent. After the loyal customer has acquired some points, they can exchange them for a reward. Typically, the rewards are freebies, discounts, or exclusive experiences and offers. 

Most often, these points have an expiration date. Naturally, this incentivizes customers to spend more in a predetermined period. For example, you can offer a 90% discount on Black Friday if a customer has 100 points. If they get 10 points on every 100 dollars spent, they will have to pay 1000 dollars to earn the 90% off reward. Of course, don’t take this example point blank. As you will see in a bit, building a successful loyalty program strategy needs more than copying a template.

Starbucks is an excellent example of a point-based program. Their customers get points (“stars”) for various reasons, such as purchasing food or drinks, installing their app, or other special activities. Once they get enough points, they can exchange them for a free drink, some food items, priority in mobile ordering, and even a free birthday drink.  

Tier-based programs

This type of program divides customers based on their purchasing habits. For example, if someone buys your product 3 times monthly, they get into the first tier. If they purchase it six times, they get into the second tier. For nine or more purchases – they go to tier three. Naturally, each tier offers exceedingly more lucrative benefits. For example, tier one may receive a 10% discount, while tier two receives 25%. Tier three, in this case, will receive 40%. This way, you incentivize your customers to spend more regularly on your products. 

Hotels and airlines most often use this strategy. They successfully managed to implement several tiers. Marriott Bonvoy, for example, offers six tiers of loyalty benefits. The first one is the basic benefits like free Wi-Fi and point earning. The second one offers Bonus points, room upgrades, and early check-in/late checkout. The highest sixth tier offers the first- and second-tier bonuses plus lounge access, a complimentary continental breakfast option, personalized welcome gifts, guaranteed Platinum upgrade, and bonus points on all eligible spending and all bonuses from previous tiers.

Cashback program

This program is often associated with credit cards and other banking and financial services. However, it can be implemented in various other niches. This loyalty program aims to push customers to reach a certain spending. For example, if you spend 200 dollars, you will get 10% back. This means that the customer will actually spend 180, but if the average spend before the loyalty program was 150 dollars, that’s a 30-dollar increase in your revenue. As you can see, this is a great way to boost your customer value. To top it all off, you can give back the cash in the form of a gift card, which will ultimately end up back to you. 

Rakuten’s loyalty program is a great example. The program offers cashback percentages on purchases made through their platform at thousands of partnered retailers. Users earn cashback simply by clicking through the Rakuten website or app before purchasing at selected stores. Essentially, they offer immediate value through tangible cash rewards, cater to the convenience of online shopping, and provide a seamless user experience. Most importantly, they offer a passive reward for customers using their platform by giving them back a percentage of the spending in PayPal or a gift card. 

Paid program

This program requires people to request to join and actively pay a subscription fee. As you can imagine, this program must give exceptional additional value to customers; otherwise, they will simply disregard it. Naturally, the benefits of such a loyalty program should be on par with the payment. 

Amazon Prime is a great example. The annual subscription is quite expensive, currently at about $140. However, it offers some pretty sweet benefits to the users. They offer free two-day shipping, free same-day delivery, free release-date delivery, free no-rush delivery, or choosing a weekly delivery day. Moreover, loyal customers get streaming services, free music, and games, along with the opportunity to borrow ebooks and audiobooks from a rotating selection of titles, unlimited photo storage, exclusive deals, and so much more. 

So, if you are going to use paid programs, you better make sure the deal is lucrative enough. 

Coalition programs

This program is ideal for those who operate in more than one niche. This way, you can offer points, which the customer may redeem at various locations. For example, if you provide boilers, furniture, carpets, woodwork, and other home decorations, a purchase in one of your businesses can translate into a discount at any other location. This will promote your other businesses and make sure a client won’t stray from your reach, regardless of their needs. 

This can also be done as a collaboration between various small businesses that aim to boost their customer base. 

Gamified programs

The gamified programs use game mechanics, such as points, badges, and leaderboards, to motivate customers to engage with the program. Casinos and retailers most commonly use those types of loyalty programs. You can add a simple game like spinning the wheel and receiving a reward based on what you get. It actually enhances the customer’s engagement and experience, which is a win-win. 

Though there are other types of loyalty programs out there, those are the basic five, which are most commonly used and have a proven record of bringing success. Regardless, creating a unique loyalty program is not out of the question. On the contrary, building a great loyalty program requires a healthy dose of innovation. But before you get there, you must still follow the 10 steps of creating a genuinely astounding loyalty program. 

How do you create a great loyalty program?

Creating a successful loyalty program is not an easy task. It requires time, tests, and, above all, a lot of data and analysis. So, let’s start from the very top. 

Be creative with the name

This may sound like a dumb place to start, but the name of your program is everything. If you think about it, every loyalty program has a great, brandable, and catchy name. It’s the flagship of your brand. It’s the place where your loyal customers will gather. So, take your time and try to think of a catchy name with a dose of humor representing your brand, style, and values. Also, try to add some powerful words, like exclusive, royal, and ambassador. Naming your loyalty program simply “Brand name loyalty program” shows a lack of imagination. Thus, even though your benefits may be great, you will miss the opportunity to get even more customers. 

Analyze your customer’s behavior

Well, the name might be the most important aspect, but a close second is whom you will be targeting with this loyalty program. You need to know your customers inside and out. You must understand what drives them to purchase, what makes them hesitate, what is most important to them in their customer journey, and how you can improve their experience with a loyalty program. For example, you need to know your average CLTV, how much a customer spends on a single purchase on average, at what stage of the customer journey they are ready to purchase, what their feedback is, and whether it was an impulsive purchase or whether it was a calculated one. Answering all these questions and more will give you invaluable insight into your customers’ behavior and how to manipulate their actions with your loyalty program. 

Define the program’s goals 

Next in line is defining the goals of the program. Just like with anything else, the point of loyalty programs is to enhance your business in some way. So, determining the goal is the cornerstone of creating a successful campaign, which will deliver success.

One of the most common goals of a loyalty program is to increase CLTV. However, there might be other aims as well. For example, you might want to boost your credibility by receiving more reviews. Or you might want to increase the average spending on single purchases. You can even aim to generate more money for charity. Defining your goal will allow you to make the correct decisions in the rest of the points on this list. 

Choose the loyalty program type that fits your business.

Once you have done your homework, it’s time to decide on your loyalty program type. Now, you can mix and match all sorts of types or come up with a unique way to engage your loyal customers. Still, make sure your loyalty program fits your business and your customer’s expectations. For example, a paid loyalty program on an e-commerce brand offering second-hand products is not customer-friendly. If someone is willing to buy a second-hand item, they clearly don’t have excess money to spend. So, instead, give them a cashback, which will be far more valuable to them. 

Personalize the loyalty program

As we’ve discussed multiple times in our 2024 trends series, personalization will be huge. So, naturally, the same goes for loyalty programs. For example, if a customer is interested in a particular sports equipment, like skiing, personalizing their loyalty program will lead to a much higher interest. You can even add a specific loyalty reward based on their hobby. For example, “Share a picture riding your [brand name] ski on your favorite slope, tag us, and get a 25% discount on your next purchase”. This will enhance the customer’s loyalty, boost your popularity, and drive your word-of-mouth marketing to new heights. 

Add a variety of rewards based on actions

Though your loyalty program has a primary goal, that doesn’t mean you can’t aim to cover other aspects of your business. So, make sure your loyalty program rewards your customers for more than just purchasing. For example, give a special reward for downloading your app. Give another reward for leaving a review or bringing a referral. 

Also, make sure you offer a variety of rewards. Earning just loyalty points can become boring over time. You don’t want that. You must keep your customer’s hype constant. So, it’s a good idea to add special occasions when loyal customers can earn an experience, a special offer, or anything else that will enhance their enthusiasm for participating in your loyalty program. 

Make loyalty points valuable

This should come without saying, but if you want your customers to enlist in your loyalty program, you must make it valuable. You can’t offer just a smile on the radio in exchange for their loyalty. Your customers must receive a noticeable reward. Only this will incentivize them to continue choosing you over your competitors. 

Naturally, using a cashback system is the most straightforward way to show the value of each purchase. But if you choose points as your currency, make sure to clearly state the value of each point. This way, your customers will know what they have and how much you are willing to give back. 

Go beyond monetary value

With Gen Z becoming the driving force behind the economy, the entire conversation with the customers will shift toward values. While previous generations were attracted by the best deal, the most cost-efficient choice, and all sorts of discounts, brand values are the driving force when it comes to Gen Z. This goes for loyalty programs as well. Today, around 66%  of customers are adamant that brands should have a social stand and join in the conversation of social and political topics. 

So, make sure to go beyond monetary value with your loyalty program. Add a cause that your customers can stand behind. Identify a social cause your customers feel strongly about and give them the opportunity to join your efforts in solving the problem. For example, you can create a program where a percentage of each loyalty program customer purchases goes to a particular charity. Or you can take the hands-on approach and invite your loyal customers to plant trees when they get to certain points. 

Don’t put strong barriers

Putting barriers in place for someone to join your loyalty club is not ideal. Still, if you want to claim that the club is exclusive, some sort of barrier is a must. However, even if you do put some barriers, make sure they are almost transparent. Loose barriers will retain the exclusivity notion but won’t deter customers from joining in. For example, if your customers spend on average 150 dollars, don’t make your cashback goal 500 bucks. The cashback scheme aims to push your clients to get 1 or 2 items on top, not to bleed them dry. So, make the target price 180 or 200 dollars. This way, you will convince more than a few customers to raise their spending on your website. 

Make it engaging

A loyalty program is only as good as it is engaging. After all, the main point of this system is to push users to be more engaged with your business, so it stands to reason to make the loyalty program dependent on their actions. For example, you can ask your customers to get every day in your app to gather more points. Or offer special discounts for visiting your website for 7 consecutive days. You can give bigger rewards to people who share your brand on social media. 

The only thing you need to follow is giving your customers something to do, preferably every day. The more they spend with you in their mind, the higher the chances they spend their money on your website. 

What else do you need?

Knowledge is indeed the cornerstone of creating a robust and successful loyalty program. But, of course, knowing how to build it is only the first pillar in this endeavor. A good loyalty program must have a fast, secure, and reliable infrastructure behind it. Otherwise, your efforts will simply fail. 

HostArmada is the perfect choice for anyone looking for the ideal infrastructure for their website and loyalty program. Our hosting services offer lightning-fast speed, robust and proven security features, and a 99% up-time guarantee policy. Check out our plans, and choose the one that best fits your needs. And don’t forget, a robust, secure, and fast hosting infrastructure is behind every successful online business. 

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Personalization will be the theme of 2024

The era of a one-size-fits-all approach in eCommerce is drawing its last breath. Soon, a new era will dawn. An era of personalization. Each customer is special, and they expect a personal approach. AI will catalyze this process as first-party and zero-party data start flowing in. With the help of artificial intelligence, you can personalize each experience based on the user’s behavior.

For example, depending on the entry point, you can provide the potential customer with a specific customer journey that will accommodate their needs and interests. For instance, if a customer comes to your website through your blog, it means they are trying to satisfy a query. Naturally, they need a bigger push, as they are still unsure whether your products will fulfill their needs. Thus, providing them with benefits, added value, testimonials, pros and cons, and a FAQ section will increase your chances of finishing the sale. On the other hand, if the entry point is directly on the product page, the user is ready to buy. They are past the research point, so you must provide them with a comprehensive and lucrative deal, convince them your website is secure, and allow them to use their preferred payment method. 

Once the purchase has been completed, you can work on retainment by personalizing your messaging even more. Still, personalization won’t be enough to beat the competition in 2024. It is, however, the bare minimum. To increase your chances and be better than average, you need an additional push. One that will help you not only bring in new customers but also make sure old ones return for more. 

Loyalty programs are a must

Loyalty programs are not something new, especially when it comes to big brands. However, in 2024, there will be no business small enough that won’t offer at least some rewards to loyal customers. We live in an age where bargains can be found with a click of a button. Some apps and extensions even show you where the best deals are and even offer coupons. So, the question is no longer if you should have a loyalty problem but how to structure it. 

No surprises here, as a recent study shows that the prospect of earning rewards influences the customer’s spending behavior. Moreover, 64% of loyalty program members spend more money to maximize the points they will make. This comes to show that a loyalty program can increase your profits, of course, depending on your rewards. Keep in mind that, on average, each American customer is part of 16.7 customer loyalty programs, so your incentives must be better than those of your competitors. 

So, in 2024, you must add a loyalty program to your website if you want customers to return. There can be all sorts of rewards. Giving free products in exchange for gathered points is the fastest and most common practice. However, that does tend to qualify in the one-size-fits-all stigma, so we’d suggest going a step further and just offering a gift card or a coupon worth some money in exchange for the points. This way, each customer can get the product they like with a significant discount. 

If you want to go even further, you can utilize AI, analyze the user’s behavior, and offer them a specific product they will be interested in at a massive discount. 

Use your imagination and build your loyalty program based on what fits your business model. 

Gen Z on the focus

Catering to Gen Z will be at the forefront of eCommerce in 2024. This young generation is joining the economically active and will sculpt the retail business in the foreseeable future. This goes double for eCommerce stores targeting more youthful people with tighter budgets. Luxurious items are still in the domain of Millenials and Gen X, though. So, be mindful of what you’re selling.

In 2024, this new player on the market will have a huge impact on the retailer’s behavior. One thing is sure – you will have to implement some additional value to your products. The retailer’s values greatly affect the newest generation, which will only grow as the dominant customer demographic. They emphasize the need to purchase from sustainable, eco-friendly, diverse, and ethical retailers. 

Thus, to be successful in 2024, an eCommerce business must be transparent, open to innovations, sustainable, and know how to communicate with the Gen Z crowd. So, try to build your messaging based on what this new dominant demographic wants to know. Don’t focus on superficial exaggerations on how your product will improve their lives. Just be straightforward and give them all the information. This will make you a trustworthy partner in solving their problem. Otherwise, Gen Z is the most tech-savvy and well-versed generation when it comes to advertising. This means they can spot an exaggerated and dishonest ad from a mile away. Once deemed untrustworthy, your business is as good as gone. 

Video over image

With the rise of Gen Z as the dominant customer, retailers will start catering to their needs. The good news is that this demographic is way more responsive to ads. Actually, 56% can recall an ad they watched for just 2 seconds. That’s the main thing, though: Gen Z prefers videos over images. They predominantly consume information through short videos. We can blame TikTok and Instagram for this. 

Another thing to consider is their attention span. Though, on average, their attention span is about 2.7 minutes, if you don’t grab their attention in the first 8 seconds, consider your ad skipped. Thus, you need a skillfully made, entertaining, short video to capture this audience’s attention. 

Aggressive advertising is a bad idea. It’s far better to be truthful to what you offer but make it enjoyable and colorful. Start with a hook. Remember, you have 8 seconds before they scroll down. Also, make sure to emphasize your brand’s mission, especially if it’s related to sustainability. Seriously, sustainability will sell in 2024, so if you want to succeed, just start thinking of Mother Earth. 

This will be a great starting point, but you should also consider enlisting micro-influencers to discuss your business and endorse your retailing practices. Just be sure to do your research so you don’t waste your money on someone who doesn’t engage your target audience. 

AR and VR are trending as well

Influencers are not the only thing up the successful eCommerce website’s sleeve. Utilizing the power of AR and VR will also make a huge difference in 2024. Though they are still predominantly used by big brands, smaller retailers who manage to implement AR or VR tools in their platforms will be front and center in 2024. 

An excellent example of a brilliant AR is Saatchi Art’s app. It allows you to place any painting, photo, or print in their collection on your wall and see what it would look like. So, if you offer home decoration, you can take a page out of their book and create an application to let your customers place your products on their furniture and see how they will lighten up the place. 

On the other hand, we have Virtual Reality. Now, VR is a bit more complicated and a lot more expensive to produce. Still, if you can afford it, you might want to be one step ahead of your competitors. VR is becoming more popular and still predominantly untapped in eCommerce, so being a pioneer will significantly boost your growth. 

Livestream Shopping

If the financial burden of creating a VR world is too much for you, just go with the much less complicated Livestream Shopping. We predict that 2024 this trend, started by Amazon in 2019, will start gaining traction. TikTok has already begun testing live shopping functionalities in the US. YouTube and Shopify are also preparing their own versions, giving retailers and micro-influencers one more channel to interact and introduce their products.

In a nutshell, livestream shopping is a form of e-commerce that combines live video streaming with online shopping. It involves a live broadcast, usually hosted by a presenter or influencer, showcasing products or services in real time to an audience of online viewers. Viewers can interact with the host, ask questions about the featured items, and make purchases directly within the livestream.

Often, livestream shopping includes limited-time offers so they can engage the FOMO in the customers. 

Best of all, livestream shopping can build social proof by showing viewers that other people are interested in the product and that it is of good value. This can be a powerful motivator for purchasing, especially for products that are unfamiliar to the viewer.

The best part is that you don’t have to be Amazon to make your own livestream shopping show. You can do it on your YouTube channel or your Social Media page. 

Still, before you get in front of the camera, ensure you have at least some experience in lifestreaming. You must be able to entertain your customers and viewers for the entire duration of the lifestream, regardless of whether they ask questions. So, make sure to prepare a scenario and practice talking for as long as it’s needed. 

Direct communication will be more important than ever

The best part of livestream shopping is the direct communication with your customers. Direct communication will be vital for any retailer in 2024. With 68% of customers ready to pay more for better customer service, it’s no wonder why so many retailers are implementing direct communication channels. Whether it’s by phone, direct messages, or a customer service platform, it’s important for the customer to receive answers when they need them. So, if you can make your customer service 24/7, this will greatly boost your success.

Actually, in 86% of cases, a customer satisfied with the direct interaction with the brand will become a long-term brand champion. Furthermore, 89% of customers will make a second purchase after a positive interaction with a brand representative.

Naturally, not everyone can build a 24/7 customer service center. Still, it’s a good idea to implement AI as the first touchpoint for your customer support. Most times, customers want to ask questions that you’ve already answered in an FAQ or elsewhere. So, having a robot answering the easy questions will allow you to reduce the cost and time needed to interact with all your customers. Still, you must be ready to answer all previously non-specified questions. And if you can’t afford to make it 24/7, be sure to be available when your target audience is most active. For example, if you are operating overseas, make sure to be online when they are most likely to seek your help. 

A good direct communication ethics can lead to incredible results. A positive interaction with a brand representative can lead to up to 1400% higher ROI in the long run. So, investing in better direct communication with your customers is definitely worth it. 

Faster delivery, better results

Nearly half of US citizens expect their delivery in two to three days. So, if you are within that norm, you will most probably be OK in 2024. However, with Amazon Prime and the next-day delivery options many retailers offer, these expectations will inevitably go down. With the rise of services that offer extremely fast deliveries and loyalty programs that provide them for free, staying relevant in the eCommerce market is a challenge. So, if you have the budget for it, we’d suggest putting some groundwork into shortening your delivery time. 

The first step is finding a partner who can process your packages faster and even over the weekend. Naturally, this will cost you a bit extra, but it will be worth it long term. Or, if you have your own fulfillment center, make sure to double down on faster deliveries by motivating your employees, hiring new teams, and even opening new fulfillment centers closer to your customers. While in 2024, one-day deliveries are still only a recommendation, we won’t be surprised if, a year from now, this becomes mandatory. 

Social commerce

Social media is still the most visited platform on the internet. This is where people spend their time, which won’t change in the foreseeable future. At least not until something better comes along. Regardless of how you feel about Social media marketing and sharing your profits with the likes of Meta, X, or Linked In, with more than 4.9 billion users, Social Media is a must if you are a retailer. 

By now, you should already have a robust social media presence. This includes a brand page where people can engage and interact with you. However, 2024 will demand even more. If you already haven’t, using the social media marketplace is now a must. In 2023 alone, the various social commerce marketplaces generated close to 1.3 trillion dollars in revenue. This number will rapidly grow and is expected to reach 3 trillion as early as 2026. With users spending 2+ hours daily on average browsing social media, that’s hardly a surprise.

Focusing on the US in 2022, 36% of US internet users bought at least one product directly from a social media platform. Today, nearly half (47%) of social media users would buy directly from a social media platform, as 42% would trust them with their primary payment method (debit or credit card)

So, there is no need to attract customers to your landing pages anymore. Just make your social media presence about selling products and utilize the power of social commerce. This will inevitably boost your profits and ultimately lower overall costs even if you pay a small fraction of the winnings to the social media channel. 

Headless websites on the rise

Finally, we have a trend that will make your web designers extremely furious. Headless website architecture has been getting significant attention in the last several months, and in 2024, we predict it will become the norm. In a nutshell, a headless website is a website that separates its presentation layer (frontend) from its content management system (CMS) or data storage (backend). This decoupling allows for greater flexibility and scalability, as developers can choose the best technology for each website layer.

There are a lot of benefits if you go for a headless website. For one, they are much better at creating consistent branding across channels. Because the presentation layer and backend are decoupled, headless websites can load faster and be more responsive. This is because the backend can focus on serving content. In contrast, the presentation layer can focus on rendering the content in a way that is optimized for the specific device or platform. Naturally, this makes the architecture much more inclusive to different devices. 

Furthermore, headless websites are easier to scale than traditional websites, as changes can be made to the backend without affecting the presentation layer. This is because the presentation layer is independent of the data it displays.

In other words, headless architecture is perfect for eCommerce, especially during personalization. Having your front end detached from the back end will give you the agility to offer your customers the experience they expect. Naturally, this will enhance your overall stats and give you the boost you need. 

2024 will be even better for eCommerce 

In 2024, more than a fifth (21.2%) of all retail deals will happen online. This will lead to a 2 trillion dollar increase in 2024 alone, leading to a total of 8.1 trillion dollars. This is a trend that will only grow. So, if you want to get the lion’s share in this highly competitive industry, all you need to do is stay one step ahead of your competitors. Knowing the trends of the online retail business is the first step. The main pillars behind your success are implementing a robust strategy and ensuring your website is always at its best performance.

The strategy is entirely up to you, though we do have some pretty good advice in our blog. However, we can help you with building one lightning-fast, reliable, and secure website. HostArmada offers top-shelf hosting services, allowing you to create a reliable online store without fearing security breaches and downtime. Check out our plans and choose the one that fits your needs perfectly. After all, every successful eCommerce operation starts with a reliable hosting provider.

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Needless to say, if you are planning on starting your own retail business, it’s pretty clear that online sales are no longer just a recommendation. They are a must if you hope to succeed.

Building your eCommerce empire has never been easier. With the rise of Amazon, countless retailers have found an easy-to-use and exploitable marketplace where they can offer their products without ever needing to learn anything about website building, marketing, SEO, and anything in between. But is Amazon truly the one and only doorway to success? Can it really offer you the same level of exposure as a website will? And most importantly, is it worth investing in your own website when Amazon is available? Let’s compare the pros and cons and see if Amazon is truly the universal solution for every online retailer out there.

Advantages of Having Your Own Website

Having Jef Bezos as a competitor is clearly not the most relaxing thought out there. Still, Bezos is not a competitor. He’s just a businessman with a vastly popular marketplace. Amazon may seem overwhelming at first glance, but having your own website also has immense benefits.

Branding and User Experience

Building your own brand is, without a doubt, the biggest advantage of having your own website over Amazon. Though not official, Amazon discourages sellers from building brands, as people may start looking for their products outside the marketplace. This spells a loss of profits for the giant corporation. However, you must have a recognizable brand if you want to build a loyal customer base. Loyal customers have a great effect on your image as a whole, on evolving your user experience, and on your marketing as well. For example, if you sell funny baseball caps on Amazon, if someone asks one of your customers where they bought it from, they’d undoubtedly answer “Amazon.” On the other hand, if they enter your website, they will surely answer your brand’s name. But more on the marketing in a bit.

The branding options are limitless when you are operating on your own online space. You can create, personalize, and design layouts to your heart’s content. As you build your brand identity, you will become more famous and better respected, and why not be an authority in your industry—something you can’t do as an Amazon retailer?

Great Profit Margins

This is another huge advantage of operating alone against Amazon’s might. While Amazon does give you some serious outreach, your margins are stretched quite thin due to various factors. The most common one is the competition. If you have a quality product produced by yourself, it will cost much more than the marketplace’s average. Naturally, most customers will follow the rule of the lowest price. Though convenience is the top reason customers come to Amazon, bargains are a close second. In fact, 82% of Amazon buyers say price is an essential factor when considering a product. So, you must follow the lowest price, regardless of the quality.

Moreover, Amazon subjects its retailers to various fees, including referral, fulfillment, and storage fees.

Naturally, if you have a high-quality product, having your own website will give you the opportunity not only to price it fairly but also reduce the ample additional fees along the way. Thus, your margins will rise, and your profits will soar, allowing you to increase the quality of your product rather than cutting corners to keep your production at a lower cost.

Building Customer Relationships

When you are operating under Amazon, you don’t have clients. Amazon does. Naturally, you do receive some feedback, but there is no real customer relationship other than the bad ones when they return a product, and you must give their money back. There is no connection.

Having your own website allows you to communicate with your customers directly. You can give them complimentary gifts, have a much more personalized sales tactic, receive feedback, and enjoy the good rather than only suffer the bad.

Needless to say, having a relationship with your customers is a gold mine for expanding your business through word-of-mouth marketing, offering promotions, and loyalty discounts.

But perhaps the most significant advantage is that you will have the customer’s data. This is integral if you want to better your service and products, allowing you to grow faster.

Own Your Customer’s Data

Owning your customers’ data is crucial for your rapid growth. This can help you target your audience much better, understand their behavior, and fix problems with your product or services. When you are working with Amazon, the corporation owns the customer data, and you can only get bits and pieces of the information. Naturally, this limits your ability to understand your customers and better your marketing and sales tactics.

For example, if 90% of your customers bought your product after spending less than 3 seconds on your product page, you can cut the written content, add some more pictures, and make the buy button much more convenient. On the other hand, this must push you to explore why anyone would buy a product without knowing it first.

Diversification and Risk Mitigation

Having a business means you have to be prepared for any eventuality. Counting only on Amazon as your sole profit stream is a recipe for disaster. They can suspend your account for any number of reasons. Even if you manage to restore it, it will take time, leaving you hanging in Limbo. Moreover, you risk getting on Amazon’s bad side at any moment, as they are free to change their policies as they please at a moment’s notice.

Having your own website prevents all of that. First, you can diversify your sales channels and profit streams as you see fit. For example, you can sell your products through YouTube ads, Google Ads, Facebook Ads, and TikTok ads. Thus, if any of these bans your account for any reason, you still have additional streams of income to count on. Not to mention SEO and offline marketing. They will undoubtedly give you an additional boost.

Lack of direct competition

As Amazon is a marketplace, they give priority to the customers’ needs. Thus, whenever they show your product, they also show a bunch of other similar products or even substitutions. Moreover, if you offer a main product and additional accessories, Amazon will show as many diverse accessories as possible. This means the customer may buy them from a different vendor.

For example, if you offer mountain bikes, people will likely want to buy some additional gear with them. So, instead of getting their lights, locks, and other accessories that usually accompany a bike from you, they can go for a different vendor. Either way, they will receive them through Amazon at the same time. If you have your own website, that’s not entirely so. Usually, people will go for the convenience of ordering in bulk rather than cutting costs at one place, only to pay for delivery from multiple websites. So, for example, if you are selling a vacuum cleaner, when people buy the product, they are likely to buy the additional filters, attachments, and other accessories from you rather than search elsewhere for them.

Absolute Marketing Freedom

Perhaps the biggest benefit of building your own website is the complete marketing freedom. Amazon is a template-driven website where landing pages are all the same. There are little deviations from the norm. When it comes to your own website, you can build and change your landing page as you see fit. The one-size-fits-all method of platforms like Amazon is impractical from a marketing standpoint, as each product targets a different audience, and each audience has different content needs. Naturally, some products need much more explanation, while others rely predominantly on pictures.

Moreover, Amazon’s design downplays the emotional aspect when making a decision. For example, if you want to buy a summer dress, a sterile landing page won’t bring the emotional response needed for an impulsive purchase. On the other hand, if you surround that dress with a beach background, summer fruits, and cocktails, this will certainly put the customer in a much better buying mood. They won’t be buying a dress anymore. They will be buying a vision where they will wear that dress.

While the advantages of owning your own website are pretty alluring, one should consider the disadvantages as well before rushing in.

Disadvantages of having your own website

While having your own website is definitely extremely beneficial, you shouldn’t jump into such an endeavor without considering the downsides. And when it comes to building your website brand, there are quite a few downsides compared to Amazon.

The High Initial Cost

Maintaining your own website means you need to consider the costs involved in this endeavor. The initial cost is significantly higher than what you’d pay for a place on Amazon. You will have to purchase a domain and an outstanding hosting service and hire designers if you don’t want to go through the time-consuming process of building a website and optimizing it to perfection on your own. Thanks to WordPress, having a genuinely good website nowadays is not that hard. Still, it will require some knowledge of web design essentials. So, before you go for a website over Amazon, consider your budget and whether you can afford to build your own website.

Time-Consuming

Taking care of a website, optimizing it, and creating various landing pages for your products and marketing campaigns will take time. A lot of it, in fact. Sure, you can use templates, but the SEO efforts on their own are quite time-consuming. Not to mention every other aspect of owning your own eCommerce website. So, if you were hoping for a good work/life balance, you should reconsider. At least in the beginning, until the business becomes profitable and self-sustaining, you will have to give it your all.

Limited Exposure

Being on your own means you must find your customers alone as well. Amazon has a huge customer base, which is definitely alluring. On the other hand, if you go for a website, you will have minimal exposure. Getting some clients will depend entirely on your SEO efforts and paid ads. Naturally, in the very beginning, this will be excruciatingly hard. Still, with the right SEO strategy and good marketing, you can build up your audience in less than a year.

Higher Marketing Costs

As it has become clear, marketing will be the sole provider of clients initially. Naturally, with limited outreach and without the vast Amazon audience, you will have to invest in marketing campaigns across various channels. This will cost you a lot. Be sure to have a significant budget for your ads in the first few months, as every user visiting your website will cost you. Still, in the long run, once you’ve gained some traction and popularity, this will reverse completely, and your marketing budget will become much smaller and even disappear completely in some rare cases.

Payment and Security Concerns

While you will benefit from owning your customer’s data, this will make you responsible for their protection. Naturally, you will have to find a secure way to collect and store data, which will cost you some extra money. Moreover, you are responsible for the payment methods, gateways, and all essentials. So, cutting corners when it comes to security is the worst idea you may have, as this can truly put you in some serious legal trouble.

Infrastructure, Logistics and Customer Service

One of the biggest Amazon benefits is that they take care of your entire infrastructure, logistics, and customer service. Naturally, if you go on your own, you will have to take over these tasks. You must consider storage, logistics, and the accompanying infrastructure to help you deliver your products. On the other hand, you will also have to establish a customer service center. This won’t be easy. Especially if you want to do everything on your own.

Still, regardless of the downsides, having your own website is the perfect choice for many retailers. But so is Amazon, so let’s have a look at what they have to offer.

Advantages of Using Amazon

Naturally, we can’t ignore the truth: Amazon is a godsend for millions of small retailers who just want to sell their products without bothering with building a huge brand. And, of course, Amazon has its undeniable advantages.

Fenomenal Outreach

Having nearly 514 billion dollars in sales in 2022 and a 37% market share in the US speaks volumes about the quality of your service. So, while Amazon is somewhat restrictive in its policies, there can’t be any doubt of its brilliant services.

Moreover, with 2.3 billion monthly visitors, Jeff Bezos’s marketplace is preferred by many small-time retailers. So, naturally, if you go with creating an Amazon-based operation, you will benefit from this immense exposure. Of course, no eCommerce website in the world can drive such a huge audience. But then again, Amazon offers everything, so you really should be on the lookout for what’s trending on the website rather than just blindly following the numbers. For example, if you are offering highly specific medical equipment with predominantly B2B implementation, Amazon won’t do you any good. Despite having 2.2 billion viewers, the chances that none of them will be interested in your product are significant. All in all, Amazon is not a great place for B2B sales, despite the website’s credibility.

Build-in Trust and Credibility

Speaking of credibility, Amazon is truly a champion in this aspect. If you are a new retailer, building up trust will probably be your toughest challenge. However, Amazon has earned the trust of customers all around the world. Naturally, selling your products on the platform will be much easier regardless of how fresh you are on the market. That’s why many brand-new retailers prefer Amazon as a place to start.

Fulfillment by Amazon

One of the standout advantages of selling on Amazon is utilizing Fulfillment by Amazon (FBA). FBA is a comprehensive service that streamlines the entire order fulfillment process. The corporation provides warehousing, where you can send your products. This reduces your costs for maintaining infrastructure and physical inventory of your products. Amazon takes care of storing your products in their secure and climate-controlled warehouses.

Moreover, Amazon will take care of the packaging and shipping, so you will save not only money but also time.

Customer Service and Returns Handling

In addition to the fulfillment center, you will have access to Amazon’s extremely well-organized customer service program. This will save you a ton of money, as maintaining 24/7 customer service is extremely expensive. Not to mention handling the returns. The company will take care of every returned item, inspect it, and even restock it or resale it. This hassle-free returns process contributes to higher customer satisfaction and fewer headaches for you.

No Personal Data Liability

Handling other people’s personal data is a nightmare. Once you start collecting it, you are responsible for its storage and security. Naturally, this takes a lot of effort and money. But, since Amazon is the one that gathers the information when you are using it, they are liable for its protection. This removes the burden of storing and destroying personal data upon request.

While this may sound like a minor advantage at first glance, once you start dealing with other people’s personal data, you will learn the immense stress it brings.

Lower Costs

Since you won’t be paying for domains, hosting, designers, and anything related to building your own business and establishing yourself on the market, you will be able to save that money. Naturally, using Amazon is not free, but it’s way cheaper than the alternative. Thus, if you are starting on a tight budget, you might be better off with Amazon, as short-budgeting your eCommerce website is definitely not a recipe for success.

No Know-How Needed

Finally, Amazon is the easy solution. You don’t need any know-how; you don’t have to invest time and money in a website. All you need to do is follow some simple instructions, and you are in business. The whole process is straightforward, and you can literally start within a few hours. This is essentially the “quick start” button for retailers.

Disadvantages of using Amazon

Of course, the grass is not always greener with Amazon. All of the website benefits we’ve mentioned are Amazon’s downsides. Naturally, there are some additional ones as well.

Lower Margins

We’ve explained the lower margins in detail, but it’s worth mentioning them again. The biggest problem here is that the lower profits come from the taxes and fees and the entire ecosystem, where Amazon constantly bombards your customers with your competitors’ products. Adding cheaper substitutions or copies of your product to the mix also cuts your ROI. So, while you will save money on infrastructure, marketing, and shipping costs, these savings will have to cover your initial losses and tiny margins.

Limited Brand Control

The worst downside of Amazon is that it steals your thunder. When you have an outstanding product, people will remember they’ve got it from Amazon. The packaging will have Amazon’s logo, the email confirmations will be from Amazon, and the entire correspondence will be with the giant corporation. This is a massive hit to your overall brand exposure. Moreover, it can hinder your efforts to grow and become independent over time. Not to mention that building your audience on Amazon will make you entirely dependable on them.

Amazon Dependence

Yes, Amazon is much like the Mafia. Once you get in, you rarely get out since the entire business model favors Amazon’s brand over yours. This makes you entirely dependent on their traffic. Moreover, once you start using their convenient Fulfillment centers, you abdicate from controlling your stock and building a sound marketing strategy based on your inventory, sales, and shipment plans.

Not to mention that while Amazon offers an easy international expansion, it limits you geographically to the places where it delivers. For example, if you want to sell products to Eastern Europe, Asia, the Middle East, or Africa, you need to check where Amazon’s fulfillment centers are. This will show if they can deliver your products to certain countries and at what cost.

Lack of Control Over Customer Experiences

Worst of all, you have no control over the customer experience. You can receive bad grades because of a rude customer support agent, a damaged package, or even a crude delivery guy. If you have access to your customers and you’ve built a relationship with them, you can mitigate this disastrous fallout. But since you are entirely dependent on Amazon, you can’t do anything but hope that Amazon will do its best to resolve the issue. More often than not, however, the 1-star reviews are under your product, leading to a bad score.

Limited Customer Data Access

Your dependency on Amazon goes beyond products. While it’s convenient not to be liable for your customers’ personal data, it limits your ability to make informed decisions about your marketing strategy and product development. This makes it harder for you to go on your own, as you will lose your entire audience once you leave Amazon. You will have to start from scratch.

Getting Copied

Another significant downside of Amazon is being copied. Well, that’s a problem all over the internet, of course. Still, Amazon gives access to people making cheap imitations to get to your customers and offer them a similar product, only much cheaper. Since Amazon limits your branding, you can’t spread the message that using alternatives won’t lead to the same outcome as you offer. Thus, many of your customers will simply remain disappointed with the product altogether.

Lack of Brand Personality

The lack of a brand personality is truly the worst downside of Amazon. A brand personality offers many doors, increases sales trust, and turns ordinary customers into loyal ones. Moreover, the brand personality is what helps you grow. With Amazon, you have capped growth and can never expand beyond, as others will quickly start taking a cut of the action.

Regardless of the downsides, millions of retailers have chosen Amazon for a reason. So, whether you choose it or not depends entirely on your ambitions.

Is It Worth Investing In Your Own Website When There Is Amazon

As usual, the answer to this question is “It depends.” And indeed, both options have some pretty unique purposes. Amazon is the place to go if you are after quick and relatively easy retailer profits. This is perfect if you want to resale items from other marketplaces, such as Alibaba or Ali Express. Moreover, if you produce and sell tiny, commonly used items that can’t be branded, like smartwatch bands, then again, Amazon is a great way to sell your product.

On the other hand, if you offer unique, high-quality, or relatively expensive products, investing in your website will give you far more opportunities to grow. It all depends on your vision. Having your website will provide significant benefits in the long run, but it will be harder to develop and get running initially. So, if you are in for the long run, and you’d like to build an empire, a brand that’s more than just a retailer, but a name in the eCommerce world, then having a website is mandatory.

Of course, just having a website won’t do the trick. You need to have a fast, reliable, and secure website. This is where we come in. HostArmada is a cloud-based hosting service provider that guarantees lightning-fast speed, 99.9% uptime, and robust security measures against server breaches. Check out our plans and find the one that will serve you best. If you have any doubts, just contact our team, and we will happily assist you with choosing the right package.

The post Is it worth investing in your own eCommerce website when there is Amazon? appeared first on HostArmada Blog.

What is a Payment Processor

Before we discuss the gateways themselves, you might wonder what a payment processor is. It is a platform that allows you to receive payments via debit, credit cards, or other methods. It handles the entire process without sharing any crucial bank card information, meaning you do not need to go through the lengthy and difficult financial and legal requirements that will allow you to operate with money. Instead, you are using a third-party operator. The best part is that all the sensitive financial information is managed and stored by the operator, meaning you are not liable for keeping it safe.

Naturally, the gateway is responsible for transferring the funds, and in some circumstances, it can block the transaction, which may protect you or the card owner from fraud.

Probably the best part is that if you use WooCommerce, you have a huge choice of trusted payment processors. All you need is a store account and a payment gateway account, making the entire setup process straightforward and extremely fast.

How does it work

While different processors have different features and characteristics, they all follow the same operating pattern. It’s a 5-step process, which is anything but complicated.

Step 1: Register an account with your WooCommerce payment gateway (PG) of choice.

Step 2: Connect your PG account to your personal or corporate bank account

Step 3: Use the payment processor’s plugin for WooCommerce to attach your PG account to your online store. Rarely do payment processors not have direct plugins and need some extra work. Nonetheless, we won’t mention any of them today.

Step 4: You are ready to operate. Whenever a customer adds one of your products or services to the cart, the processor opens a secure link, allowing the transaction from the customer’s bank account to yours to be completed. If everything is in order, both parties will receive a message that the financial transaction has been approved.

Step 5: You receive the funds in your bank account. Depending on the provider you use, this may take a few days.

What to look for

Naturally, not all payment gateways are built equally, and when trying to create an online store, you should always push for the best option. Therefore, you must look for several key features when choosing a payment processor for your WooCommerce store.

Transaction Fees

Transaction Fees are crucial for pricing, as you’d want to retain your margins despite using this convenient application. Most often, payment processors use two-component compensation for their services – a small fee for the transaction (usually around $0.30) and a minimal percentage of the total price. Note that there might be different pricing for chip credit cards, invoices, etc.

Operational cost

Some gateway providers charge a monthly fee on top of the transaction fees. Before creating an account anywhere, ensure you understand how much you will pay for the service and whether you will have to pay some extra charges due to the specifics of your business. For example, if you offer a subscription-based service, your customers’ payments may be charged extra. Moreover, some processors charge extra for international transactions, which may add some cost to the overall spending.

WooCommerce compatibility

WooCommerce compatibility is a must if you want to have a smooth experience. Most providers already have WooCommerce plugins, which helps with another key point you should consider – is it user-friendly?

You should research the processor’s supported payment methods and the countries and currencies they operate with. Naturally, credit cards and e-wallets are a bare minimum, but you must strive for gateways that accept all popular payment methods such as PayPal, bank transfers, and others.

Security

Finally, you need to consider the most important payment aspect – Security. No one would willingly give their crucial financial information to a suspicious vendor. Moreover, you will connect your bank account to the same, so security is mandatory.

At HostArmada, we know how hard it is to find the perfect payment processor. We’ve been there, and it’s far more troubling than finding the best hosting provider. Especially when we are on the market. It’s really a no-brainer. Just check out our offers if you need Fast, Secure and Stable Web Hosting service.

But when it comes to a payment processor, the decision is tough. That’s why we checked about two dozen payment gateway service providers and picked the best five for your WooCommerce online store.

1. Stripe

Undoubtedly, Stripe is the most well-known payment gateway on the market, and for a good reason.

Pros

It has a meticulously clean design, its user-friendliness is incomparable, and it comes with all the documentation a developer may need. Moreover, the set-up is as easy as 1,2,3. Among the Stripe users, we see some websites with colossal financial transfers like Amazon, Peloton, Kickstarter, Squarespace, and others.

Stripe prides itself on the variety of payment methods it supports. Along with all major credit and debit cards, the payment processor can be used with Apple Pay, AliPay, Google Pay, and at least a dozen more.

The best part is that the check-out is not just user-friendly but also outstandingly beautiful and customizable. In addition, it’s easily integrated with your WooCommerce store with plugins and offers some handy reports in its dashboard.

The pricing is pretty adequate for what you receive. You’ll need to pay 2.9% per transaction and another+$0.30 per card charge. Moreover, you will be charged an extra 1% for international dealings and another one for currency exchange if such is needed. On the plus side, there are no annual or monthly fees.

Cons

The only downside is that the payment processor is available in only 42 countries, which is quite significant. However, if you want to deal with most Asian countries, Stripe is not your gateway.

Stripe is perfect for all kinds of businesses, big or small. It’s simply one of the best payment processors out there.

2.PayPal Pro

PayPal has been a household name for quite some time now, and people, who are not comfortable with sharing their personal information with vendors, often prefer to pay them via PayPal. PayPal Pro is the business solution to this unique problem.

Pros

The most significant benefit of PayPal is its brand, which inspires trust. It’s a well-known corporation, and using them can transfer some of their reliability to your website. In addition, it’s easily integrable with an easy-to-set-up WooCommerce plugin.

Among its key features, you will find a highly customizable API, professional invoice generation, and, best of all, it’s available for over 200 countries.

Cons

The biggest problem with PayPal Pro is its pricing. It heavily depends on your location and is quite convoluted. In addition, it has international charges, as well as per-transaction and monthly fees.

Nonetheless, Paypal remains one of the most well-known payment processors and is the perfect choice for those who are just starting.

3. Square

Square was originally designed for an in-store payment method. However, it can also be used as an online store payment method. It’s one of the best-designed payment gateways with the most user-friendly interface. If your store has a physical location, this payment processor is indeed irreplaceable.

Pros

Square can be easily integrated into your online store via a WooCommerce plugin, as well as with your in-store Square device. It has some fantastic SEO tools, accepts almost all payment methods, allows coupon usage, works with invoices, and can even book appointments. To make it even sweeter, it can be easily integrated with Instagram.

The fees are standard, as they charge 2.9%+ $0.30 per transaction, and some features may need a monthly payment plan.

Cons

Its biggest problem is the small number of countries and currencies it supports. Generally, it can be used in the US, Canada, Japan, Australia, and the UK.

Square is the perfect solution if your online store is just a compliment to your physical location. The integration it provides between the two is simply marvelous.

4.Authorize.net

On the number 4 spot, we have one of the most secure and trustworthy payment processors, Authorize.net. The Visa-owned gateway has some highly-advanced fraud detection features, which prevent scams and save you a lot of trouble in the process.

Pros

Authorize.net allows almost all payment methods, including Visa (of course), MasterCard, Discovery, American Express, PayPal, Apple Pay, E-check, JCB, Chase Pay, and many others. It can seamlessly integrate into your WooCommerce store with a customized plugin and is extremely easy to use. Furthermore, the price is quite affordable as they charge 2.9% + $0.30 per transaction (at the moment, at least).

Cons

Naturally, there are some downsides. Probably the biggest one is that although it’s easy to use, it takes some time to set it up correctly. Moreover, it’s available only in the US and Canada, which is not a problem if you don’t intend to expand outside of these countries.

Moreover, it has a monthly fee, which, although small ($25 as of writing this post), is still a deterrent for businesses operating with small margins.

However, if you have big ambitions, good margins, and generally have a large business, Authorize.net is the perfect choice for you.

5. Apple Pay

Being owned by Apple is always a good sign for any product or service. The company is well-known for its high-quality and outstanding support.

Pros

Like most of their products, Apple Pay is extremely user-friendly, exceptionally secure, and perfectly designed. It can be used both online and offline, which is a good option for stores with physical locations.

The brand is highly recognizable, which gives it an extra layer of trustworthiness.

The biggest plus of this payment processor is that it’s basically free. The only charges are related to the credit card provider’s fees.

Integrating with WooCommerce stores is quite easy, but it requires a third-party plugin. However, since the plugin is Stripe (for which we will talk a bit later), we don’t consider this a bad thing.

Cons

When it comes to the cons, there are some significant deficiencies. Firstly, Apple Pay works only in Europe, North America, and about half of the Asian countries. Naturally, that’s not a huge problem if you’re not doing business outside these areas. However, the payment processor is mainly intended for Apple users and is much better integrated with IOS products. The biggest downside, however, is that Apple pay supports only Apple Cash, which is still available only in the US. Other than that, it can be used with most credit and debit cards, but no other methods.

Apple Pay is a good choice for businesses that predominantly target iOS users living in the United States. In such cases, this payment processor is genuinely brilliant.

Let’s recap

When choosing the right payment processor for your WooCommerce store, there are various factors to consider. If your business is predominantly in the US and your customers are IOS users, Apple Pay has some outstanding features that will make their check-out experience sublime. On the other hand, if you are targeting a broader customer base in North America and you have a significant business, Authorize.net, with its Visa backing, is probably the better choice. If you have both a physical location and an online store, Square will integrate both places seamlessly. PayPal is a dream-come-true for those with little to no experience who just want to start selling. Finally, Stripe is truly the goldilocks when it comes to payment processors. It’s perfect for every business, regardless of size, product, or margin. Undoubtedly, Stripe can easily claim the title of the best WooCommerce payment processor out there.

The post The top 5 Payment Processor plugins for WooCommerce online stores appeared first on HostArmada Blog.

Among the dozens of e-commerce platforms, WooCommerce and Magento are undoubtedly the A-listers, with millions of businesses using them for their online shops. And while it’s a well-known fact that WooCommerce has a far bigger market share than Magento, many still wonder if it is the better choice for their e-commerce ambitions. Let’s find out.

Why is WooCommerce so widely used?

WooCommerce is a customizable open-source platform that’s powered by WordPress. Currently, the platform owns 23.39% of the global market share and is the most widely used platform globally. Some estimates suggest that around 40.6% of all online stores use WooCommerce. To put it in perspective, approximately 7 million currently active websites use WooCommerce as their e-commerce platform. The most significant percentage of them (nearly 10%) are from the US (660,931), followed by the United Kingdom (270,073) and Germany (181,026). 

Among the platform’s key features is the ability to pick almost any payment processor via a separate plugin for WordPress. In addition, WooCommerce has some outstanding customization opportunities, supports an unlimited number of products, and has limitless growth potential. The platform is easy to use even if you have zero experience, it’s highly cost-efficient as it is absolutely free, there is outstanding support, and thanks to the WordPress extendability, it has a solid SEO base score.

Graphic Source: https://trends.builtwith.com/shop/WooCommerce

What about Magento?

While WooCommerce is directed more to beginners with little to no budget, who are interested in functional and easy to work with solutions, Magento targets companies ready to fund something more sophisticated.

So naturally, Magento has a much lower market share (1.32%) as it’s targeting a niche group that can afford and are willing to spend some money to receive a better quality platform. While it pales in comparison with WooCommerce in sheer numbers, Magento still has some solid usage as approximately 250,000 active websites are currently using this platform. Moreover, this number has doubled since 2018. 

Furthermore, Magento has around 20% of the top 1000 internet retailer’s websites in its portfolio, unmatched by any other platform. 

What genuinely draws businesses to use this e-commerce platform is the efficient and secure APIs that can connect with any third-party solution. Furthermore, while there is a steep beginning of the learning curve, once you reach the plateau, Magento becomes intuitive and easy to use. 

Magento is created for rapid growth and can easily support an unlimited number of products. 

Needless to say, both WooCommerce and Magento have some serious pros and, of course, some cons. But which one is better? Let’s check their performance in several categories to find out.

Round 1: System

Being two of the best e-commerce platforms, WooCommerce and Magento have much in common. They are both open-source products, predominantly free to use, self-hosted, have an outstanding community behind them, and are highly customizable. But, of course, they have some significant differences as well. The main one is that, unlike WooCommerce, Magento is a content management system on its own, albeit explicitly built with e-commerce in mind. WooCommerce, on the other hand, is essentially an e-commerce plugin, which you can install on the most popular platform worldwide – WordPress. 

Winner: Magento – Even though WordPress, without a doubt, is the best CMS in the world, with over 43% of the CMS market share, Magento’s system was built explicitly for e-commerce, giving it the advantage. 

Round 2: Web Hosting

Both platforms need secure, fast, and reliable hosting to perform at their total capacity. HostArmada is an excellent choice, as our cloud-based servers guarantee high speed, security, and optimal uptime.

WooCommerce, being a plugin, is exceptionally lightweight and doesn’t occupy much server space. Furthermore, it runs smoothly, and web servers effortlessly deliver it in a blink of an eye due to its optimized code. That’s why even our Start Dock plan is quite enough to create your own online retail business. 

On the other hand, Magento has more serious web hosting requirements due to being a more complex system. Naturally, it would need some more powerful hosting options to run smoothly. Our Web Wrap proposal is perfect for starters, but once your business grows, be prepared to switch to Speed Reaper. In addition to that, the most recent version of Magento require an additional Search Indexation service called Elastic Search which we do offer as an additional service. 

Winner: WooCommerce – The platform’s lightweight is definitely an asset, which will help newcomers to the business get a fast and reliable online shop for a reasonable price. 

Round 3: Usability

WooCommerce, just like WordPress, is extremely easy to use. The intuitive design of the dashboard makes it effortlessly navigable even by beginners. It’s, without a doubt, the go-to e-commerce platform for people with zero experience in creating or maintaining websites. Moreover, if you have minor experience with WordPress, WooCommerce will feel natural and blend into the interface. There is practically no learning curve, as using the system is genuinely effortless. From creating a product to bringing it to life on your website, it can take as little as a couple of minutes (provided you have ready pictures and a copy on standby).

Magento‘s usability is somewhat more complicated. The platform has a steep learning curve at the beginning, but once you reach the plateau, Magento will come as naturally as any other E-Commerce platform. If you are serious about your business and you are willing to put effort into learning all there is to know about Magento, the platform will repay tenfold. 

While adding new products to Magento is far from being complicated, it’s still a bit harder than doing it on WooCommerce. It needs some additional steps, and it will take some extra time to put your products live on your page. 

Winner: WooCommerce – It’s simply the more user-friendly platform, although Magento may have some more options in the long run. 

Round 4: Customizability

Both platforms have some outstanding customization abilities, as both have a vast library of themes and templates that can make your website a truly gorgeous online store.

Magento’s themes are almost always ready to use right out of the box. They, however, are a bit more complicated to install, and some might even need a professional to get involved. Furthermore, the paid Magento’s themes can be more expensive than their competitors. 

WooCommerce, on the other hand, needs some extra effort to make the theme look like a true online shop. As a plugin, WooCommerce requires some extensions and widgets to be installed so you can add more features and missing functionalities. The paid themes are relatively cheap, but if you want a genuinely gorgeous website, you might need to enlist the help of a developer. 

Winner: Magento – although the theme is a bit harder to install, its genuine professional look can’t be reached with WooCommerce, without having some developer’s skills or enlisting the help of a professional. Naturally, Magento wins this round.

Round5: Features

Being a platform explicitly designed for e-commerce, it’s not surprising that Magento has some serious advantages over WooCommerce in this round. The state-of-the-art system allows for multi-language capabilities, multi-store options, much more complex product structures, highly sophisticated navigation, and many more features you get right out of the box.

On the contrary, WooCommerce comes as a blank page, which you must fill with extensions and widgets to get the desired functionality and design to appear to the end user. Thankfully there are thousands of these on the market, and WooCommerce can also acquire Magento’s superb features. Unfortunately, adding them up will slow down the platform, and some of the plugins may add to the cost. 

Winner: Magento – Despite having the opportunity to add the same premium features that Magento comes with out of the box, WooCommerce can’t compete in this regard with a system that has been created explicitly for this task. 

Round 6: Extendability

Both e-commerce platforms have, as it seems, an infinite number of extensions and plugins, which can add different functionalities the website owner desires. What separates them, though, is the price and the usability. 

WooCommerce offers almost all of its extensions for free. Many of them have been developed by the WooCommerce community and have the only purpose of helping out. Even those extensions, which are paid, cost significantly less than what they would cost on other platforms. Furthermore, the installation process is as straightforward as they come. All you need to do is follow a simple procedure that often includes less than five clicks.   

Magento is equally rich in extension variety, although it is equipped with everything one might need to build a genuinely magnificent online store from the very get-go. However, if any additional features are required, there is most probably a plugin or an extension as a solution to the problem. The downside, however, is that those plugins are most commonly paid, and their price can add up fast. Furthermore, installing the plugins and extensions may prove difficult for beginners, and even if you are well acquainted with the platform and how to work with it, you may still need assistance from professionals for some plugins. 

Winner: WooCommerce – The practicality, cost, and user-friendliness of WooCommerce plugins definitely give it an edge over Magento in this round.

Round 7: Scalability

Magento’s whole sales point is that it’s the most scalable E-Commerce platform out there, so it is no surprise that it offers just that. With decent hosting behind its back, the platform has no limits, and it’s definitely the right choice for you if your goal is rapid growth and expansion. In addition, the platform can easily handle thousands of products and orders, making it perfect for massive stores.

WooCommerce is not that great when it comes to the sheer number of products you can add. Although the platform can handle an infinite number of products, after adding 2500, the system becomes a bit sluggish. Even if you upgrade the hosting service, you will still find that the platform itself has some limitations. That’s why WooCommerce is not ideal when scaling with products and extensions despite its many advantages.

Winner: Magento  – The platform was literally created with scalability in mind. Although WooCommerce has many advantages, Magento is definitely the right choice if you are trying to become big. 

Round 8: Security

Being a special-purpose platform built to accommodate e-commerce needs, Magento, in general, is among the most secure E-Commerce platforms out there. In addition, Magento rarely needs additional plugins, and even if it does, they are more sophisticated, and it’s far less common for them to have some malware inside. So naturally, this tightens the security holes that can be exploited.

WooCommerce is also not that frivolous with its security. Although WordPress, which powers WooCommerce, was built initially as a blogging platform and tends to have more hacker attacks annually than any other platform, the developers take security extremely seriously. As a result, there are rarely any occurrences of leaked information through the WooCommerce platform. Security can be tightened even more by some high-profile WordPress plugins, which can be a bit expensive but are well worth every cent. 

Winner: Tie – Although Magento has built-in security and has been created as an E-Commerce fortress, WooCommerce security is definitely not to be underestimated. Yes, the top-of-the-shelf security plugins may drive the cost a bit higher, but the price is well worth it. Thus we can’t definitively say that one security is better than the other. 

Round 9: Cost

Both platforms are free to install and use. However, there are some accompanying costs that you need to address when using either one. 

WooCommerce is by far the cheaper alternative. It requires a lower-grade web hosting solution, which respectively you can get. Moreover, most of the plugins needed to build a fully functioning online store are free, and those that offer extravagant features and are paid have much lower prices. The development costs are also pretty much on the downscale. 

Conversely, Magento’s cost may escalate quickly if you decide to go beyond its factory features. The plugins are costly. It does require a high-end web hosting solution, and you may need to ask professionals for help much more often than with the alternative.

Winner: WooCommerce – The platform was created as a low-cost online store platform, so it shouldn’t be surprising that it’s not very pricy. On the other hand, Magento’s niche is definitely going for a more refined target group, meaning their product would naturally cost a bit more. Therefore, WooCommerce is the clear winner in this round. 

So which one is better?

As it most often happens, the answer is “It depends.” With a 5:5 score, we can genuinely say that both platforms have their advantages and disadvantages. If you need a highly-functioning online store with a few products, nothing fancy, and practically no cost, WooCommerce is your best choice. 

If you are going for fast growth with many products, high-end features, and a professional outlook, then you should invest in Magento. 

Whichever you choose, you will need some top-of-the-line hosting service, which you can secure with HostArmada. All you need to do is give us a call, and we will fix you up with the best plan for your needs.

The post WooCommerce vs Magento: The best self-hosted E-Commerce platform appeared first on HostArmada Blog.

Whether you are an old business looking to establish a digital presence, or a new one making things from scratch, it all starts by selecting the right web hosting service. You do nоt want to overspend on something you will not need, but you also do not want your website to experience issues by underestimating its needs!

In this latest blog post, HostArmada gives you the much-needed know-how on choosing the best solution for you based on the needs of your budding e-commerce website. Keep on traversing this post for more information!

When is Shared Hosting suitable for E-commerce?

Let’s start with the most common and accessible type of web hosting available on the market for your e-commerce project: Shared Web Hosting.

Several customers and websites (you guessed it!) share the same server when it comes to shared hosting. It is, on average, more affordable and practical in more ways than one. It is uncomplicated and straightforward to get started. The web hosting plan’s pricing, technical support, disk storage, and optimization are essential features to consider when purchasing a shared web hosting service.

We spent a lot of time refining our Shared Hosting services to give you the best in all those categories mentioned above. This is why we can speak with certainty that our shared solutions are excellent for both startups and already existing websites. However, there is a slight exception to keep in mind: If you are ready to get serious about your project or see web traffic increase, you probably will not want to settle down with a shared hosting plan in the long run.

Of course, some cases are unique, and if you have questions regarding your e-commerce fitting on one of our Shared Hosting plans, we encourage you to contact our sales chat and discuss it with our trained agents!

Heading straight for VPS and Beyond

What is known as a Virtual Private Server (VPS) is similar to Shared Hosting in the sense that VPS customers still share a server, but advanced partitioning technology allows the VPS user to have greater control, flexibility, and customization over those who use Shared Hosting. With a VPS, you almost always get a slew of extra features, including what most people look for in a VPS: root access and a dedicated IP address. And our own VPS solutions are no exception to that norm!

Whenever you do some digging around, you will always find that any enterprising e-commerce website always outgrows Shared Hosting sooner or later. And in some particularly ambitious or well-established projects, Shared Hosting was skipped altogether in favor of starting out with a VPS server. In some cases, a VPS will even be necessary because a Shared Hosting environment might meet not the demands and needs of the online project the same way that a Virtual Private Server would.

Fully Managed means Fully Reliable for E-commerce projects

What does it mean to be fully managed when it comes to VPS or Dedicated Servers? It is simple. The web host, who provides the server, also provides technical support and manages the server for the customer. We all know that it takes time and effort to manage and grow your e-commerce project, so having a web hosting solution that is already managed, will allow you to focus all your energy on your business instead of having to worry about the VPS as well. So this is a great feature to have and why you should consider getting a VPS if your own e-commerce website will require the resources and custom environment that it offers.

*Note: The more custom and niche your e-commerce software and requirements are, the greater the chance that your web host might not be able to provide you with a fully managed solution. In cases where you are not sure if we will be able to provide you with a fully managed solution, it is best to consult directly with our team on chat.

For any e-commerce business, having a modern, responsive web app is necessary. To develop such a web app for your e-commerce business, it is advisable to use NextJS Admin Dashboard. It will save you a lot of time & money as well.

For instance, check the Sneat MUI React NextJS Admin Template. It is one of the best admin dashboard templates that you can use to develop a modern & responsive e-commerce app.

Upgrade guidelines for existing e-commerce projects

Let’s say you have already got a web hosting solution on a shared hosting plan but are experiencing some issues with your website that do not seem to originate from the website itself. Then you are likely reaching the resource capabilities of your hosting environment. This is quite normal and actually a sign of the success of your e-commerce. After all, usually, this will happen only when it has been growing or getting more traffic. The background processes running behind the scenes to keep your commercial project moving along and earning capital can push your shared hosting to its limits if there are a lot of customers and visitors on your website.

Just so we can help you understand better here is a list of resources that your website could have reached the acceptable usage on your shared hosting plan in order to make you seriously consider upgrading to a VPS solution.

These are the resources in question:

1. CPU Consumption
2. RAM Usage
3. Database Size
4. Monthly Bandwidth
5. Visitors

On HostArmada the acceptable usage of server resources varies based on the Shared Hosting plan that you are using. To get more in-depth information about each type of resource and whether you need to upgrade, it is best to consult with our team. You can be sure that whenever you have reported an issue and we have detected the need for an upgrade from Shared Hosting to VPS, we will tell you about it and immediately suggest the most suitable upgrade option for you based on your individual case.

Conclusion

While there are many factors to the success of e-commerce, everything starts with the foundation, and the foundation is always built upon the web hosting solution used to host the website. This is why we want you to be aware of what is the best choice for your online project. This is a balanced choice made between affordability, room for growth, and the demands of the website itself.

If you have any questions, suggestions or concerns feel free to reach back to us at any time. HostArmada remains ready to be deployed 24/7!

The post E-Commerce Websites: Making the right call with Web Hosting Services appeared first on HostArmada Blog.

Black Friday is often the busiest shopping time of the year due to the huge discounts offered. It presents huge profit opportunities for businesses, hence, it is carefully planned by most. Although Black Friday’s online presence was steadily growing during the years, many customers’ sentiment prevailed that the best deals are offered ‘in store’. 2020, however, changes the game a bit. Whether because a fair number of stores will remain closed due to avoiding risky crowds or customers being more precautions, eCommerce will be heavily affected. One thing is certain, this year Black Friday will be like nothing we have seen before. So, here comes the next question, – How do you prepare your Online Store for Black Friday and Cyber Monday in 2020?

Prepare for Increased Competition

Most business owners are aware of how fundamentally important it is to prepare for the yearly sales season starting from Black Friday (27th of November) to Cyber Monday (31st of November). However, this year shopping behavior and expectations were permanently changed. Hence, coming up with a bullet-proof plan will be challenging even for those with solid experience. If you want to make the most of the expected breaking records this year, you need to start preparing early.

As we previously pointed, due to the Covid 19 pandemic, most stores have taken their business online. This undoubtedly leads to a significantly increased competition in eCommerce during 2020. This year, you need to expect competition from various directions. Be sure it will not be limited only to existing competitors, with so many new companies approaching the online world. So, how are you going actually to stand out from the crowd?

Focus on Segment Targetting

To begin with, you need to ensure the right promotion is targeting the right customers. Email marketing has proven to be highly effective over the years. However, you should avoid relying on generic, mass marketing email campaigns to increase your Black Friday sale volumes. Instead, analyze customers and product data to establish specific and tight segments. Reaching out to a specific segment with the most relevant content through the most appropriate channel will ensure a better response to your Black Friday & Cyber Monday promos.

Comply with Customers’ Behavior

Recently Google revealed a detailed report with useful points on how customers’ behavior changes this holiday season. Implying these points to your marketing strategy could definitely benefit your eCommerce website during Black Friday & Cyber Monday. According to their report, the following search terms are growing in popularity:

• best affordable
• available near me
• curbside pickup
• support local businesses

Google’s report points out that customers are deepening their researchers on deal-seeking to find greater quality and price value.

Embrace Personal Touch

Black Friday has always been a fight for customers’ attention. Of course, most customers expect massive double-digit discounts during Black Friday & Cyber Monday. However, it is not just about the discount any longer. Customers are getting more price-cautious in 2020, and they will definitely research and compare prices before purchasing your products. To stand out, you should focus on the care aspect and on campaigns that resonate emotionally. Providing them with additional perks could be a good way to distinguish your brand from the rest in your niche. That could be an exclusive gift, free delivery, bonus points, etc.

Create a Sense of Urgency

The homepage of your eCommerce store is the online equivalent to the entrance of your physical store. Hence, you need to make sure its design is appealing and attention-grabbing. Effective website banners and countdown timers are a proven way of creating a sense of urgency in your visitors. Typically, knowing that their time for purchase is limited to motivates customers towards a purchase, implying the fear of missing out on the deal.

Ensure Optimal Site Performance

Like any other business owner, you surely would like to strike the highest volume of sales possible during the holiday season. A critical point you need to pay attention to is the stability, optimization, and performance of your website and mobile app. Naturally, during Black Friday and Cyber Monday, your traffic will increase. It is essential to be sure your website can handle the peaks without affecting the performance. It is unnecessary to point out that customers do not like slow loading websites. Among such a high competition, this could definitely be a deal-breaker and lead to the loss of potential sales.

Here comes our role. As a web hosting provider, HostArmada focuses on three main aspects – stability, speed, and security. So, if you are not certain about your current host, we would like to encourage you to check out our hosting solutions. Thanks to our experienced sales agents and the custom website optimization we offer, you can be sure your website will remain stable and blazingly-fast loading during the Black Friday sale.

Although it will be quite naive to believe the Black Friday season in 2020 will not be challenging, you can still make the most of it if you are well prepared. The key is to start planning early and ensure your strategy is well rounded for your business. It would be best to apply unique strategies and creative techniques to comply with the newly emerging consumer expectation trends.

The post Best eCommerce Tips to Boost Sales during Black Friday & Cyber Monday in 2020 appeared first on HostArmada Blog.