The digital revolution has not only made it possible for consumers to pay for goods and services more efficiently, but also more cheaply. Fewer overheads, bigger audiences and the ability to offer a more diverse range of products (because there are no space restrictions like in a shop) all give online operators more freedom to innovate.
For example, Amazon is able to offer a more competitive price on the goods it sells because it has millions of customers. Essentially, online retailers are more willing to take a smaller margin because their volume of sales will be large enough to ensure they still make a healthy profit. In contrast, a high-street shop will get a fraction of the footfall a site like Amazon gets which means it has to charge a higher price in order to make a profit.
As online sellers are able to turn a profit by charging lower prices and offer mega sales such as Amazon’s Black Friday, consumers almost always expect to find lower prices online. This supply and demand dynamic is the reason online operators are thriving and will continue to thrive long into the future.
Online Retail Wars
In fact, with the e-commerce world now thriving, it’s not simply a case of live retailers vs. online retailers anymore. Online price wars are now a very real thing and that means modern platforms need to find a way to compete with the big boys. One of the most interesting examples of how online businesses have innovated in order to top the competition is the lottery industry.
The UK’s National Lottery (Lotto) has been running since 1994 and, in line with all major businesses, it now has an online presence. However, thanks to the diversity of the Internet, players now have the choice to ante up and play for millions in a different way. Lottoland is an independent lottery site that allows players to take part in dozens of international lotteries.
Instead of purchasing a lottery ticket directly from the Camelot (the Lotto’s owner), online players can pay Lottoland instead. In simple terms, Lottoland players are betting on the outcome of a draw rather than investing directly in it. However, the beauty of this model is that everything else works in exactly the same way. Players pick the same amount of numbers, participate in the same draw and, importantly, win the same amount of money.
Innovation Means Better Pricing
So why would someone want to play via Lottoland and not directly with Camelot? Well, as we’ve discussed, sites like Lottoland have the power to innovate. Because it offers access to many lotteries (players have traditionally been restricted to draws in their local region), Lottoland generates a lot of traffic which means it can create its own offers.
For example, anyone who plays EuroMillions at Lottoland in September can beat the recent price hike and ante up for just £2. Even though Camelot has decided to up the price of a EuroMillions ticket to £2.50, Lottoland players don’t have to worry about this because they aren’t investing directly into the game. With Lottoland willing to take a financial hit, players can play EuroMillions for less but still win just as much money.
It’s only the dynamics of running an independent online business that make this possible. Because Lottoland has a ton of traffic and the power to set its own rules, it’s not only able to beat its competition but give players a better deal. Taking this idea and applying it to the virtual business world as a whole, it’s easy to see why becoming an Internet platform is a wise move. Having the ability to innovate, experiment and offer more value to your customers is something every entrepreneur should aspire to and that’s why going online is essential for any business.