Female founders and the evolution of ecommerce
There are basic, and well-documented, behavioral differences between the way men and women shop online. Women typically browse products, read reviews, look for bargains, and utilize online chats and discussion forums. Not only is shopping online a social act for many women, it’s an increasingly informed act. Women frequently take the time to do their homework and find out the specific details about a product and the company that makes it, and then, once they have established a sense of trust with that company, they tend to remain loyal to the brand.
Within the retail space, however, many women’s frustrations remain unheard, opening up the market to product improvements and niche retailing. With more-and-more women taking advantage of the benefits offered by ecommerce and pitching a broader range of startup ideas, we find that half of the country’s small businesses are now founded by women. For an entrepreneur, regardless of gender, the pros of founding an ecommerce business are obvious:
- Lower startup costs
- Potential customer reach
- Measureable Marketing Results, the ability to modify and improve based on data
- Improved efficiencies in infrastructure
- The flexibility to adapt quickly, from inventory selection to live pricing
And of course, the room for growth. In 2014, nine percent of all sales in the U.S. will be made online, and the market will only grow in the coming years. By 2018, Forrester projects that online purchases will reach $414 billion, 11 percent of total retail sales. Through both ecommerce and cross-channeling initiatives, the future of retail sales growth exists online.
As a consumer, though, I find the greatest benefit of ecommerce to exist in its unique ability to create a connection between the business owner and the customer, and it is through the power of this connection that female founders can often find an advantage and help grow the ecommerce space.
Multi-channel merchandising strategist Valerie Keast asserts: “Women in retail have an advantage because they take the time to read what the customers are saying tied to the data and arrive at conclusions that provide a deep understanding of what the customer likes and dislikes.” Ecommerce gives you the ability to not just reach a larger audience, but to target the right customer base for your brand, regardless of geographical limitations; and in order to effectively grow your brand within this space, you have to be willing to connect and listen to your customer. According to James McQuivey, VP of Forrester Research, women are more likely to approach products and services from the customer’s perspective, allowing them to better serve the market and its needs. Staying connected and engaged allows for reciprocity between business and customer.
One of our founding tenants when establishing From the Lab was to build a community of beauty lovers seeking education, information and transparency. Our goal was to empower our consumers by fostering a community of informed shoppers, but within the ecommerce sphere, this sense of reciprocity can extend even further. Our labs can share formulations driven by innovation rather than marketing agendas, and because ecommerce allows us to function with minimal overhead, our customers receive first access to luxury beauty products at an affordable price. Our business model, which can only exist within this ecommerce-generated global community, capitalizes on this sense of mutual reciprocity.
Ecommerce provides a particularly strong arena for female founders. According to PitchBook, almost 40 percent of all startups that now acquire VC backing are founded or co-founded by women. Though we are only one example, I see a new wave of female-led businesses moving toward a global community, with emphasis on the community, in which every participant thrives.
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Lorraine Dahlinger is the president and co-founder of From the Lab. A veteran in brand development and design, Dahlinger has witnessed firsthand the branding and evolution of several beauty lines. She has extensive marketing experience and previously served as creative director for ALP, an innovative entertainment marketing company, where she served a range of clients including Twentieth Television, CMT, VH1, Sony, Fine Living, and DIRECTV.