For many, succeeding in e-commerce means understanding your customer, product and setting bold long-term strategies. The worries of traditional retailers are frequently voiced in the news, yet e-commerce is growing ever stronger.
To help you make the most of your e-commerce venture, we’ve put together 10 top insights that can give your business the edge.
Many great ideas fail because they don’t start with the people that will actually buy from you. Entrepreneurs fall in love with their own products, but if it’s not serving a true customer need, forget about it.
As Eric Ries, author of the New York Times bestseller The Lean Startup told Wired magazine: “The creation of stuff is not valued. We are trying to come up with an alternate understanding of what creates value in a startup. The thesis is validated learning: learning how to create a sustainable business. We need to reengineer companies to focus on figuring out who the customer is, what's the market and what kind of product you should build.”
Be prepared to change your e-commerce plan based on initial user feedback, even if you really thought the product would be a hit.
While adverts might snag attention for a few fleeting seconds, your products stay with people for much longer, eventually becoming your greatest brand ambassadors.
This is a point made by Jeffrey Rayport in the book Building Brands Apple’s Way: he emphasises that it’s the long-term effects of a great product that are the greatest drivers of e-commerce success. Even if you’re not selling a physical product, your service itself becomes the brand. Think about Amazon: the brand is seen through shipping, recommendations and choices, and they take the greatest care to make these lasting ambassadors.
E-commerce opens shoppers up to elements of risk that don’t exist in bricks and mortar stores (such as, is this vendor legitimate?), so you have to emphasise your stability and safety from the very start by investing in your brand.
That means developing a single look and feel for your logo, design and templates, and using these across every one of your channels, from Facebook to Etsy and eBay, not just your homepage.
It's good to make sure these are all live from the first day of trading — and also to be transparent about when you are active online, how long responses will take, and what form your interaction will take.
Learning comes from trying, failing, and thinking again, but many entrepreneurs fear failures and can even deter their employees from taking the risks. Entrepreneurship, says a McKinsey tech insights report, is a process that goes in circles, rather than a linear direction.
That means being willing to be wrong, and fail, and try again with the learnings you’ve made. These are what they call ‘productive failures’: the concept is that you will learn something valuable from each failure, even if that lesson is just that you shouldn’t spend any more money chasing a bad idea down a blind alley.
The immediacy of e-commerce transactions encourages short-term thinking, but you need to dedicate yourself to long-term investments and goals that corner the market. Part of the secret is having a coherent vision for the purpose and value your company brings to the world.
This is one of the points made by Professor Scott Galloway in his book The Four: The Hidden DNA of Amazon, Apple, Facebook and Google. Galloway, who teaches brand strategy and digital marketing at New York University’s Stern School of Business, suggests that Amazon led the way.
“Until now,” he told Marketing Journal, “the contract companies have with shareholders is: give us a few years and tens of millions of dollars, and then we’ll begin returning capital to you in the form of profits. Amazon blew up this tradition. Profits have been replaced with vision and growth — via storytelling."
What companies like Amazon do with their capital is use it to experiment. Having access to capital lets them try their hand in entirely new categories, ones that may raise eyebrows among investors, but can pay off in the long run.
Jeff Bezos, Amazon CEO, expressed this as “Our willingness to be misunderstood, our long-term orientation and our willingness to repeatedly fail are the three parts of our culture that make doing this kind of thing possible.”
From cloud computing to e-book readers and TV shows, they embrace bolder thinking even in the face of criticism and misunderstanding, because they know you’re only as good as you next greatest product.
To succeed in e-commerce, many believe you should challenge every product and process yourself before your competitors do. This is yet another example taken from Amazon’s story, and brought to life by Bloomberg News’ senior executive editor Brad Stone in his bestseller The Everything Store.
He underlines the fact that Bezos has driven the biggest ideas at Amazon, naming him ‘an ideas machine’ who brought new ideas in nearly daily. The lesson here, as Stone told The Economic Times is that you “Never stop questioning the fundamentals of your business.
Disrupt yourself before others do. Continually motivate employees so that they never get too complacent — see Yahoo, AOL and many other Internet companies for evidence of what happens when they do.”
"To gain sales, it's good to maximise the amount of time that a potential customer spends with your brand."
People often believe that their e-commerce idea is so brilliant that they don’t need to pay to market it, but the truth is that you’ll need both to succeed.
This is advice from the online marketing guru Gary Vaynerchuk, whose company VaynerMedia works on content and marketing for brands like PepsiCo and General Electric. “Look at it historically,” he told eConsultancy. “The people who relied on organic reach on Google… got burned by algorithm changes, and then they pivoted into paid. Yes, being on the first page of Google results organically is much more powerful than doing it through paid, but it takes a mix to really make your SEO/SEM work. There is no organic reach in print, radio, TV, banner ads, direct mail, or any other form of advertising.”
In other words, use a spread of marketing, paid and unpaid, to make sure you're not putting all your eggs into one basket.
To gain sales, it's good to maximise the amount of time that a potential customer spends with your brand. The higher the value of the goods, the more time they need.
This is a key point made by Robin Waite, author of the Amazon bestseller Online Business Startup. “The typical level of engagement for higher-ticket items such as cars, consultancy packages, even garden studios is seven hours of engagement,” he explains at Medium. "A business card, shoddy website and five-minute chat at a networking event will build about fifteen minutes of engagement.
Therefore, you need plenty of marketing assets to build multiple touch points.” He refers to Google’s white paper Zero Moments of Truth as recommending at least eleven touchpoints for customers, from books, videos, podcasts, longer consultation periods and free trials.
Your e-commerce venture will need a clear business plan, and part of that plan should be a decision about whether to focus on cash flow or profit from the very start.
E-commerce usually involves fast transactions and rapid turnover, so interruptions to your business can have very damaging results very quickly. Maintaining healthy levels of working capital, and having ready access to more should you need it, helps you stay focused on developing new lines, growing the business and consolidating your position.
You might also enjoy reading up on: