Your options to beat the competition are quite limited, the most important being:
The most important benefit of an e-commerce strategy is that it helps you, as the seller, understand your market. You need to know who your buyers are and how they buy.
Additionally, you must be aware of the impact of national and global crises on your e-commerce business. Let’s take a look at the COVID-19 pandemic, which is not expected to go away anytime soon—research by McKinsey & Company shows that online sales increased by 15-30% due to the impact of COVID-19 on businesses.
Source: McKinsey & Company
The benefits are obvious: sales, sales, and more sales. There are also other advantages of using e-commerce software:
The challenges of engaging in e-commerce are less obvious but no less important.
There are probably hundreds of thousands of companies competing to get their share of the remaining 40% of online sales. Some sources estimate this number to be 300,000, which together make sales of $149.6 billion (the total e-commerce sales being $374 billion).
E-commerce is here to stay, which is why you should have a long-term strategy for online marketplace sales. To implement a strategy, you have to understand your market.
The market you are in is made up of customers and prospects, as well as competitors. It is critical that you start by understanding who they all are and how they behave in different circumstances.
Your e-commerce objectives are closely related to your business objectives. If you want to increase revenue, you need to sell more—but it's not the only way to make your business more profitable. You can also sell the same number of products at a higher price or keep the price and reduce costs.
Your e-commerce objectives depend on the stage of development of your e-commerce business, but it is important to note that this isn't necessarily related to the size of your company. Some small companies can have a successful track record at selling online, while some large companies may be just starting their e-commerce efforts.
Let's take a look at a few e-commerce objectives for each stage of your online business:
Remember when I told you that in theory, you could sell to anyone online, but the reality is a bit different? (Just checking to see if you've been paying attention.) Well, even when there are no legislative or cost constraints, the success of your online business hinges on your effective leveraging of the right market segment. Not only do you need to find a market segment made up of people who are interested in your products, you need to find ways to reach them effectively and persuade them to buy from you. The secret to any e-commerce business is to find the right types of customers and keep them.
Except when your content goes viral or you’re featured on a TV show watched by millions of people, buyers won’t come to you. You have to find them and convince them to buy your products. It is therefore essential to know where they spend their time online and where they are more likely to buy.
Your website: The traffic on your e-commerce website can be beneficial to generating online sales. There are just a few things you need to consider to turn website visitors into buyers:
Email: No, email isn’t dead; it’s doing quite well, actually. The number of email users worldwide is expected to reach 2.9 billion in 2019, and 254 million by 2020, in the United States. All these people are sending 105 billion emails each day.
Social media: Social media may seem easy when you use it just for fun, but it can be quite complicated for sales. As you know, several major social media platforms are used globally but some are especially popular outside of the United States. For instance, Xing is an alternative to LinkedIn that is used by almost 13 million people in German-speaking countries. Comparatively, LinkedIn only has 11 million users in the same region.
If you want to target B2B customers through social selling in a certain region or country, make sure your business leverages the correct social media tools and e-commerce features such as selling on Facebook Shop.
Besides the geographical location of social media users, you need to know other demographic details such as age, level of education, and so on to leverage the benefits of social commerce. Some data sources can provide valuable information on who uses social media. Statista is a good example, as well as the Pew Research Center for U.S. data. The chart below shows the percentage of U.S. adults using social media, by age (click on the graph for details on education, race, gender, income, and community).
Source: Pew Research Center
The next step is to figure out the best times to post on social media. There is much research to help with you, some of it very detailed. This report by Sprout Social shows the best times to post on each platform, per industry sector. (Did you know that the best time to post on Instagram for tech companies is Wednesday mornings at 10 am?)
To better understand your social media audience, you can use solutions such as social media analytics software or social media monitoring software. There also are tools that can help you promote your business on social media, including social media marketing software and social media advertising software.
What's less obvious is how to approach m-commerce. Here are a few things that you should consider:
There are major differences between how different people buy online. One of the most important variations in buyer behavior exists between generations of individuals. Boomers, millennials, Gen X, Gen Z—in case you’re unsure about the differences between those demographics, here’s a quick overview:
In 2020, all of these generations are active online and on social media channels, which makes them potential e-commerce users. Besides the use of technology, there are also different approaches when it comes to how people buy.
A recent report by Criteo on Gen Z shows how its members approach shopping in general. What is noteworthy about these statistics is that there isn’t a clear preference for online versus in-store shopping anymore. It’s all a mix: where consumers find products, where they try them, and where they buy.
|Criteo identified five combinations that they describe as follows:|
It’s important to know what makes people avoid buying online so you can avoid targeting them or try to somehow convince them that their fears are unfounded. For instance, if someone is concerned about securely paying online, you can show them that the payment gateway software you use is certified by reputable cybersecurity organizations and complies with laws and regulations related to online security.
Other reasons why consumers may not buy online are more difficult to dispute. When it comes to clothing, many people prefer to try before buying. Even though there is technology to create virtual fitting rooms, it’s still in its early stages and may not make customers change their minds about their buying preferences. An alternative would be for buyers to order multiple sizes of the same product, try them, and return those that don’t fit. While this is great for buyers, it can be costly for sellers since they usually pay for returns.
Want to find the tools that will make your e-commerce business successful? Explore all G2 E-Commerce Software categories.
Almost every time I attend a conference or webinar on e-commerce, I hear how eBay and Amazon became some of the largest companies in the world or how Walmart spends millions to catch up. While these are great stories, they aren’t very relevant for most companies.
Let’s face it, the times when you were able to start a business in a garage and turn it into a multinational company are gone. Not to mention that there are thousands, maybe tens of thousands of companies just like yours. Statistically speaking, the probability of your company becoming the next Walmart or Amazon is very low.
So what matters most for you is the direct competition. A direct competitor is “a company that produces a virtually identical good or service that is offered for sale within the same market as those produced by one or more other companies.”
This definition is a bit vague, so let’s take a look at other factors that turn a company into your direct competitor:
When you have a single or many direct competitors, you can differentiate yourself by using a better strategy. That can include the use of better e-commerce software and outperforming other companies when it comes to promoting and marketing your e-commerce business.
Before you even start thinking about a plan, try to understand how important online commerce is to your company. What is your motivation for embracing e-commerce? Here are a few possibilities:
In this decision-making process, instead of being influenced by people and by circumstances, it’s best to stay objective as possible to clearly identify why you need e-commerce, what you need to succeed, and how to best put the strategy into practice.
Let’s take a look at how to answer these questions and how to use the answers to create a plan.
1. E-commerce assessment
Start by looking at where you are right now, without thinking about the future of your e-commerce business to avoid creating unrealistic plans.
Here’s what you need to assess:
This will provide a good overview of your present situation and also give you an idea of what to plan for the future.
2. E-commerce goals
I already mentioned objectives above, but now you have to think about more specific and actionable goals. Here are a few examples:
It goes without saying that these goals are directly related to the assessment above. For instance, you’ll have a hard time doubling your sales without investing in technology and qualified personnel. You’ll also have to take into account that the investment required to increase sales will be (and should be) deducted from your revenues to calculate the profit. In other words, doubling your sales doesn’t necessarily mean that you’ll double profits as well.
Now that you know what to do and why, you’ll need to think about how to implement all of your great ideas. You’ll realize that you may not be able to do everything you’d like, so you’ll have to prioritize.
A critical step is to estimate a budget for both short-term and long-term e-commerce initiatives. This should include everything that will be used to sell online—from software and hardware to employee training or hiring new personnel, working with contractors and consultants, digital advertising, website revamping and maintenance, and so on.
Once you set specific goals for your online business, you can then compare estimated revenues with the cost of the investment required to achieve your objectives. As you implement your strategy, make sure to regularly monitor actual costs and revenues and compare them with initial estimates.
Merely creating an online store and waiting for people to find it won't work. Here is what helps with your online branding:
Now that you have a pretty good idea of what you need to do to be successful in e-commerce, you’ll need the right e-commerce tools to help you. The good news is that there are lots of options available, which is also the bad news because it’s not easy to choose between so many alternatives. To help with this, here is another article on how to choose the best e-commerce software for your business.
|Read more: How to choose the best e-commerce software for your business →|
Gabriel’s background includes more than 15 years of experience in all aspects of business software selection and implementation. His research work has involved detailed functional analyses of software vendors from various areas such as ERP, CRM, and HCM. Gheorghiu holds a Bachelor of Arts in business administration from the Academy of Economic Studies in Bucharest (Romania), and a master's degree in territorial project management from Université Paris XII Val de Marne (France).
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