Building Blocks of an eCommerce Business
The eCommerce business has been growing significantly over the last couple of years (estimated to be 20% of the retail sales in the US). At the same time, it also becomes very challenging for the new entrants unless there is a strategic execution plan. Though setting up online stores are comparatively less expensive than physical stores but to be successful, demands a significant investment and planning.
Begin the eCommerce journey as a campaign with the determined investment and time. At the early stage of eCommerce, the consumer acquisition & behavioral insights weigh more than the actual revenue in terms of value. Let us look at the 12 key aspects required for a business or brand to make an impact on the top line.
1. Define goals & metrics
Set the overall objective of the business plan and identify the measurable goals. It is not always the top-line growth, but you need the other elements which help influence the conversions. Some of the examples can be the number of consumer registrations, repeat logins, profile completion percent, email or SMS subscriptions, consent of promotions, references, search impressions, social sharing, etc. Set the intended targets for those goals, so that the campaign can be more effectively executed.
2. Do Customer Research
The most important step in the process and varies based on your products or services. Identify your customer personas and figure out the demographic, geographic, economic information, and preferences. It will help what kind of resources are required to influence your customers purchasing decisions and avoid waste. If your customers are in developing countries, then investing in an iOS app would be a bad idea.
3. Design Product or Service Catalog
Not everything online sells. It is important to organize and enrich your product information so that it makes an impact on your customers. Categorize the products that are relevant for your consumers and something they can relate to easily. For example, Raymour Flanigan arranged the products based on the house layout, so customers can find products that they might not even think about.
4. Invest in Digital Content
Remember, there is not sales rep available to advocate for your brand and neither consumer have time to read about your products. Invest in building the right digital content such as posters, social banners, and short videos for ads that can get the attention of the customers. The cost-optimal way is to use the platforms like Upwork, Fiverr, etc
5. Choose the right technology platform
This is an easy step! Lot of companies promoting & selling eCommerce platforms using eCommerce channels more effectively such as Shopify, Commerce tools, Magento, and Squarespace. There is a misconception, that the right eCommerce platforms help your business growth, unfortunately not to that extent. Make sure, you chose the platform that fits your budget and business.
6. Execute Marketing Activation
Customer acquisition is the second most important step in the process. It doesn’t matter you have the right products and rich experience unless customers are visiting the store. There are multiple avenues to acquire customers, such as search engine marketing (SEM) primarily Google, Social media ads on Facebook, Instagram, and Youtube. Distribute the activations on different channels and also timeframes which yield more acquisition and registrations.
7. Set Pricing & Promotions
Many retailers today match the prices online, so from a consumer perspective price is not a direct driving force for purchasing online, and there is rising competition in the online market itself. So, products have to be appropriately priced based on the market and set the targeted promotions which increase the chances of conversion. Instead of flat 5% or 10%, set better promotions on bundles or targeted at a specific audience with a time frame.
8. Plan Fulfillment & Distribution
One of the challenging aspects of the business, which involves stocking goods, managing inventory, packing, and shipping goods. It required a significant investment to set up and manage the last-mile delivery. Other options are to use an external 3rd Party fulfillment vendor or enable drop-ship directly from the suppliers. It is also one of the reasons, businesses prefer to sell it on Amazon due to the FBA facility.
9. Decide Merchant of Record
Merchant of the record is the entity that collects the payments, performs fraud checks, and also pays the taxes. While enabling the payment gateway, the business needs to decide the merchant of record whether it wants to own these challenges or delegate them to the external 3rd parties. It will give you the time and resources to focus on customer experience and conversions.
10. Create Customer Service
Don’t forget, most of the customers need a help desk to assist them especially with the post-order cycle such as changing or canceling orders, managing shipment and returns. Leverage the automated chat Bot, FAQs, and Self service portals to reduce customer service expenses.
11. Don’t forget Reverse Logistics
Sometimes, this step is overlooked in the process but it has become critical in the last couple of years. One of the key success factors of Amazon is how they treat the returns. They make it so easy to return goods at different drop points, either packed or unpacked but with a full refund. It increases repeat sales and builds trust with the brands.
12. Perform Consumer Analytics & Re-plan
Periodically review the performance of the goals and metrics including the orders, sales, customers, reviews, customer lifetime value, average basket size, cart abandonment rate, bounce rate, top promo contents, etc. All these parameters help decide the right areas of improvement and investment.
