How can e-commerce insurance rise to meet the needs of companies trading on e-commerce platforms?
The idea of starting an e-commerce platform once seemed alien and complicated. Today the idea of a world without them seems unthinkable. It is nearly impossible to imagine our society without online sales and purchases, especially in recent times of Covid-19 lockdowns.
The e-commerce world only seems to be getting started as it continues to grow in a steady line at an exponential rate with no year-on-year declines. According to recent studies by eMarketer, e-commerce sales are forecast to grow by 265% per annum from $1.3 trillion in 2014 to $4.9 trillion in 2021.
The growth of e-commerce has recently been accelerated by the Covid-19 crisis. In fact, according to an article posted by Charged, it was estimated that, by the end of the end of 2020, the crisis would have added a staggering £5.3 billion into the UK’s e-commerce sector.
There has never been a better time to start an e-commerce business. As more and more people shop online, the number of platforms has increased enormously over the last few years. Platforms provide the base for an e-commerce store or marketplace to be built upon. With over 120 platforms available, such as Shopify (the current market leader), Magneto and woocommerce, it is the easiest it has ever been for a seller to set up an online business. Whereas, in the past, sellers would have needed to find their nearest brick-and-mortar retailer, nowadays products can be set up, marketed and sold online within minutes with just a click of the finger. Best of all, with no geographical restrictions. There is no longer a need to find shelf space to stock and promote a product physically as the virtual space to sell products online is limitless.
However, this rapid growth in numbers of sellers and buyers on e-commerce platforms has led to several dilemmas amongst even the most notorious online platforms. As the number of users grows, so do the number of platforms. It is not uncommon for companies such as Shopify to not be entirely prepared for the enormity of the businesses they provide platforms for. Who can blame them? Shopify, for example, had never expected for its service to be used by such a vast number of people. Its very founder Tobias Lükte has stated himself that “At the beginning, there was no grand plan”. Despite having initially created Shopify in 2004 to simplify e-commerce websites and make them more user-friendly. The platform has recently found itself complicating matters for its users.
When Shopify’s software crashed in November 2019, upon YouTubers Jeffree Star and Shane Dawson’s makeup line release, its inability to cope with a sudden traffic of visitors to its website, let alone cope with the vast transactions, was brought to the lime-light as a crucial factor in whether or not it could continue to be a viable platform. This being a universal issue that most growing platforms are facing today. In a tragic repercussion, many valuable client-sellers are lost out of disappointment in the platform’s failure to entirely support their business. They would rather opt for the complicated and expensive process of creating their own website.
The secret to success for these platforms has therefore been the rise of apps to manage parts of the stores. Together, these apps have formed Shopify’s army at the frontline of e-commerce in combat for its success. Without this virtual ecosystem, worth $800 million, Shopify would be far less defensible and most likely constantly under siege.
There are currently 4138 apps on the Shopify app store. Some of these include customer tracking apps such as Cartly Analytics to ‘discover insights about store visitors’, as well as customer communication apps like ‘Order Updates with Alexa’, ‘SimpleCall’ and ‘Contact via WhatsApp’, just to name a few.
There are evidently a vast variety of apps which provide better communication between e-commerce businesses and their customers. However, there seems to be a gap in insurance apps with insurance seeming to lack in digitalisation. Despite having been launched 11 years ago in 2009, the Shopify App store still only provides 5 out of 4138 apps relating to insurance.
A business without insurance feels like a castle without a moat or without walls. It is left disadvantaged and with a higher probability of defeat. The modern ability to reach a global audience means that online sellers now hold larger liabilities. Selling products uninsured therefore ties every sale to a potential catastrophe of unhappy customers, negative reviews and loss of capital. We all know that reviews are the lifeblood of online businesses.
One of the main problems Shopify merchants encounter is there being no easy, quick, accessible insurance for these businesses trading on it. Getting insurance offline can be a nightmare. Not only does it come with endless paperwork but also with the challenge of having to go through one or more brooker’s to get an underwriter to insure one’s business. It is this unnecessary complexity that provokes sellers into going uninsured so as to avoid the time-consuming nuisance that insurance can be. This, however, comes with huge risks that a majority of the time are oblivious to the sellers.
Starting with automated parcel delivery insurance, our app Offcourse is about to revolutionise ecommerce business insurance with its online ‘one stop shop’ deal with platforms such as Shopify, with other integrations coming in the future. If you are in need of insurance, or insured for too high a price or simply wish to renew your insurance in an easier, excitingly uncomplicated way: online, we, at Anansi, want to be the ones to catch you if you fall!
If you are an e-commerce merchant who wants to learn more about your insurance options, click here to learn more about Offcourse Cover