Why Businesses Should Embrace eCommerce Diversification

We can trace the roots of eCommerce all the way back to 1960, however it wasn’t until 1991 and the launch of the web, when online shopping for the general public was truly enabled. Since that time, eCommerce has seen astronomical growth, generated huge revenues, disrupted multiple markets and changed the way we shop, both from a B2B and B2C perspective. That trend for evolving, improving and catering to buyer’s needs won’t stop in the future, therefore diversification is a key consideration for all eCommerce businesses.

why-businesses-should embrace-commerce-diversification copy

What do we mean when we talk about eCommerce diversification? Well, let’s start by looking at some prime examples:


Amazon began as a small company selling videos and music back in 1998. After a year pursuing this trade, they then began selling books online to the US, UK and Germany; but Amazon didn’t stop there. They proceeded to diversify into videogames, software, general household items and toys. They even started providing services for small businesses and individuals to sell their own products on the Amazon platform, kickstarting the global conglomerate that we all know Amazon as today. Amazon is now worth over 1 trillion dollars, making it one of the largest companies in the world.


eBay was famously started as a side-project for the then founder to sell second-hand items. Reportedly, the first item ever sold on eBay was a broken laser pointer. However, as the company grew, they diversified into selling products in almost every category imaginable. eBay’s market worth is now over ¬£23 billion.


Argos may be one of the best recognised examples of product diversification in the UK. Unlike some other companies at the time of its founding in 1973, Argos launched with diversity of product firmly in mind. Sifting through their catalogue of toys and goods became one of the iconic shopping experiences of the 2000s and, later, their pivot to online retail enabled them to stay just as relevant in the age of internet shopping.

All of these companies exemplify the importance of eCommerce diversification. Without diversification, they could have become reliant on their niche and on the demand of a single customer base for survival, rather than multiple diverse markets.

How do I Diversify my eCommerce Business?

There are different ways to begin eCommerce diversification, some can be subtle tweaks and others more fundamental shifts in your approach. We think that these are two of the most effective:

Diversify your Product Range

It’s safe and easy to find a good product niche and stick to it. However, the best way to weather the storms of a fluctuating market is to not rely on one or multiple products in a single category that targets the same customer. By diversifying your range of products and markets, you’re providing a robust safety net for your business, just in case one of your product areas experiences a drop in consumer demand.

Selling via more Channels

Providing your products for customers via Amazon is great, given it is one of the largest marketplaces in the world, but what if Amazon turns out not to be quite the perfect fit for your business? One of the consequences of the popularity of Amazon is the level of competition in some categories and for some product lines. This one of the reasons why diversifying platforms should be taken into consideration as much as the option of diversifying products.

What are the Benefits of eCommerce Diversification?

Larger Customer Base

Diversifying product ranges and sales platforms causes a natural increase in not only the kinds of customers who buy your products, but in the sheer number of consumers who see your company as a source to buy products from. A larger customer base will also allow for less of a need to rely on one or two types of customer for revenue, giving a better long-term business outlook.

Increased Profitability

Expanded product ranges in most cases leads to an increase in customers, with an expectant increase in profits. This will also provide the opportunity for increased market segmentation, which in turn will also help to increase net profits. An increase in sales channels can also pave the way for profit growth. This can provide a virtuous circle, whereby the profits are re-invested into further eCommerce diversification to further increase sales channels and product diversification.

Robust Business Protection

Selling across multiple categories and reaching all kinds of consumers is one of the most powerful way to protect your business. It’s a sure-fire guard against stagnating markets that you would otherwise be relying on for revenue. It’s also the perfect way to adapt to changes within a seasonal market. For example, it’s not particularly feasible to run a business based off the Christmas season alone, but an increase in product diversification could help to fix that. Business protection is one of the most important aspects to maintaining a successful, long term brand.

Fulfilment and Shipping

Utilising eCommerce allows businesses to choose one of two options. Either take care of fulfilment and shipping in-house or outsource it to a specialised company to take care of it for you. Each option has its pros and cons, but the point is that eCommerce allows businesses to choose between the two, depending on various individual factors such as finances, time and manpower.

Fulfillment & Shipping

Increased Relevancy

About 10 years ago, eCommerce sales were responsible for a mere 5.1% of all retail purchases. In 2019, eCommerce accounted for over 16% of all retail transactions, or approximately £465bn. Given current trends, by 2030 eCommerce may well make up over 25% of all retail sales. These numbers demonstrate the importance of being able to utilise this trend towards eCommerce in order to maintain relevance in a market shifting towards online retail.

Better Utilisation of Market Data

One of the added perks of utilising the capabilities of eCommerce is being able to store and access much larger and more detailed volumes of customer data. By knowing the kind of consumer niches you want to sell to, and collect data on, you can much more effectively create, manage and diversify marketing campaigns targeting individual groups of potential customers. This move away from generic advertising can increase the chance of sales from customer to customer.

What makes for Successful eCommerce Diversification?

There are many aspects to diversification that you could look at as part of your planning process, some of which will be unique to your business or sector. Here are some of the more frequently seen aspects that are important to consider.

The first is the ability to add new entire product ranges quickly and easily. This can be done by onboarding products from multiple sources to keep the time to market as short as possible. This adaptation to new demand from multiple market sectors to fill a gap within a market, coupled with achieving it in the shortest possible time, is one of the key things that differentiates good businesses from great businesses.

Another key factor that needs to be considered is the management of business growth. eCommerce businesses, especially those that are able to fill gaps in the market on a short notice, are likely to experience rapid growth. This sounds like a great thing, however this needs to be balanced against the ongoing stability of the company. You should make sure that your business is agile enough to manage and accommodate large amounts of products and consumer data.

A final key factor to consider is the ability to be agile enough to add new sales channels. New sales channels are critical for the long-term safety, stability and profitability of a company as it allows for a much greater customer reach. Businesses should also be able to keep track of the huge amount of data that is generated by multiple sales channels in order to maximise profitability.

Using Product Information Management (PIM) can be a really helpful and intuitive way to ease your path to diversification. PIM gives businesses a single place to collect, store and view your product data.

For a more in-depth look at how using PIM can boost your business book a demo today