What do you think of when you think of the word ecommerce? What’s the first thing that comes to your mind when you hear the term?
For many people, it might be buying from big online retailers like Amazon or Alibaba. For others, it could be selling t-shirts and knick-knacks on platforms like eBay or Etsy.
But in many ways, ecommerce is much more than just selling physical goods online. For some industries and businesses, such as banks, ecommerce is a way to learn more about their customers, collect and leverage more customer data, identify and engage in cross- and upselling opportunities — and ultimately drive greater average revenue per user (or customer). And at the end of the day, making more money for you and your business is what it’s really all about, right?
So let’s learn a bit about why banks should be selling ecommerce to their customers.
1. Drive traffic to your site
These days, with inflation rising and supply chain disruptions threatening product availability and price points, it seems like everyone is focused on getting a good value — the most “bang for their buck,” so to speak. It’s why bundles and combos are so popular: rather than pay for and pick up a single item at a handful of separate stores, many customers prefer a “one-and-done” approach to shopping where they only have to make one stop.
Think about it: if you’re craving fast food burgers and fries, despite your preferences for specific restaurants, it’s unlikely that you’re going to go to one restaurant for the sandwich, another restaurant for the fries, another restaurant for the chicken tenders, another restaurant for a milkshake, another restaurant for soda…
If a customer can purchase more than one service from your business, that automatically makes it more attractive to them. The banking industry is quite competitive, and beyond the core products that many banks offer — checking and savings accounts, personal and business loans, high interest-based products, and so on — many banks are looking for new products and services they can offer to draw customer interest. So offering ecommerce to your banking customers that are looking for services for their business can be an easy win.
2. Access more data
You probably already collect a fair amount of your customers’ data. Anytime they engage in banking transactions or buy your bank’s products and services, your business accumulates that data, which it can use in a number of ways — we’ll get into that more below.
By selling ecommerce alongside your more traditional banking products, you’ll addd another insight-rich data stream to your business: what services your customers are selling, what products aren’t selling, the volume of their sales and revenue, and so on.
This can give your business a fuller picture and profile of your customers and their habits and financial dreams, which can help inform how you manage your relationship and do business with them in the future.
3. Identify cross- and upsell opportunities
As part of that greater data collection, you’ll gain a greater awareness of your customers’ motivations and business goals. This, in turn, can help you pinpoint which of your customers would be most likely to buy additional goods and services from your bank — as well as what goods and services they’re most interested in.
For instance, some of your new ecommerce customers might not be aware of all of the banking products you have on hand that can help them grow their business, so you’ll have the chance to cross-sell them on those things, bringing in more revenue to your business.
You may also have some existing bank customers who, after utilizing your new ecommerce services and launching their own online store, find that they need more of your higher-end products — a business credit card with a higher limit, money market accounts, basic payroll services, etc. — giving you an opportunity to upsell them on your bank’s more exclusive features.
4. Keep up with competitors
Whether or not your bank is serious about providing ecommerce services to its customers, you may have noticed that many other banks of varying sizes have begun offering their customers the opportunity to set up an online shop (or, like Bank of America, have set up their own!).
You may have also seen several large online retailers, including Walmart, Alibaba, and Rakuten, that have expressed interest in or taken steps toward becoming something of a bank themselves. This blurring of lines between retailers and banks is only going to become more commonplace in Western markets and is already becoming part of the de facto market structure in places like China and Japan.
As consumers look to the businesses and institutions they frequent to offer more than just one or two core services, ecommerce offers an easy way for banks to better-anticipate the things their customers will need and begin building out their service suite. Banks that continue to focus solely on selling banking products risk being left behind in an increasingly competitive marketplace.
We hope the information above has been helpful, but look: the bottom line is that selling ecommerce helps your bank’s bottom line. As a bank, if your exposure to ecommerce has been limited — maybe a basic online portal and some payment processing — your business is leaving a lot of money on the table.
So we want to hear from you! Does your bank or the bank you do business with offer robust ecommerce services alongside its banking products, or is their ecommerce offering more basic and simple? Let us know in the comments!