By Jacques Hart
As society adapts to our next-normal, consumers have begun to limit their spending and change the way they purchase products and services. While traditional retail has suffered from mandatory store closures and a sharp decline in foot traffic, e-commerce has seen a sizable growth, with COVID-19 accelerating the growth process. Per eMarketer, e-commerce is projected to grow 18% during 2020, a noticeable increase following a growth of 14.9% in 2019.
While retail as a whole has declined this year, e-commerce has continued its growth as consumers’ pent-up demand and boredom have led to increased spending from the comfort of their homes. A very real opportunity is forming for companies to embrace this sudden shift and migrate their business online, and if done right, it can result in a multitude of benefits, such as reduced operating costs, access to a broader, national audience, reduced marketing costs, and the ability to always be open and sell to consumers 24-hours a day.
With all that said, here are some helpful tips to take into consideration when you take the leap and embrace e-commerce:
- Fine-tune your website to optimize the shopping experience and create an inviting environment for customers
- Prioritize mobile users and ensure your website is completely compatible with portable
- Consider selling on established marketplaces such as Amazon and eBay to tap into an already massive customer base, while offloading some marketing
- Practice consumer-friendly policies such as free shipping and a generous return policy to entice on-the-fence
- Provide clear and concise information for your products, allowing customers to cross-shop and weigh the benefits of your
- Embrace social media and utilize it as a central component of your e-commerce strategy to attract customers and establish your brand
- Constantly evolve and refine your products and messaging to adapt to consumer trends and maintain a competitive position in the marketplace.
We are witnessing an explosion of e-commerce, especially now that traditional retail is feeling the pressure. The time to transition is now, and if you can see your company making the switch and benefiting from it, ask yourself what steps you need to take to get the ball rolling.
Below are some key determinants to consider while transitioning into e-commerce. Chief among them are the four pillars of marketing: Product, Price, Place, and Promotion, as well as Personnel and Investment.
Do you have a product or service that can be readily marketed, sold, and delivered online? E-commerce is unfortunately not a one-size-fits-all solution for every business or industry. For example, a national distribution/logistics company is unlikely to experience the benefits of e-commerce due to the custom and tailored nature of the business. On the other hand, if you’re an eyeglasses manufacturer, e-commerce may prove to be an explosive sales and distribution strategy for you. You have to ask yourself: do you have a product or service that can easily be found online, marketed online, distributed online, and sold online?
The moment you move from an offline, brick and mortar experience to an online, virtual experience, you move from an isolated marketplace to a vibrant marketplace where consumers have the real-time ability to cross-shop and compare products, but there is very little price elasticity online so you’re likely to capture your buyer as long as you remain competitive. You may be trading margin for volume, but you have to expand your mindset and realize that the idea is to trade a large piece of a small pie for a small piece of a larger one. Considering this, it’s going to be mission-critical that you price your product or service accordingly in these hyper-competitive marketplaces.
What is your core e-commerce strategy? Is it in your best interest to build a proprietary website that will be your fundamental sales and distribution platform, or would it be more effective to plug into existing e-commerce marketplace eco-systems? In other words, do you want to build a custom platform that you own and can build to suit, or do you use a marketplace like eBay with an established user base and tools? Once you have made this determination, then you have to invest in advanced, complex, and sophisticated advertising solutions to drive high-quality and legitimate consumers to the point of sale.
Will your brand be perceived as relevant and compelling to an online audience? It may be that your brand has a strong appeal to local consumers, but now that you’re marketing online, you’re going to be exposing your brand to a whole new segment of customers who may not be familiar with your local charm. Your local presence may not translate online, so you need to ask yourself: can you take your existing brand story and lead with that online, or instead reinvent your brand presence to engage with these new audiences? It is imperative that you develop a compelling value proposition that can compete with the e-commerce brands of the future. Look at how Warby Parker has reinvented the eyeglass space by developing a contemporary brand story, coupled with a great price point and a strong, social impact positioning.
Transitioning to e-commerce is going to require a great deal of expertise, whether you staff your company internally or work with independent partners. It will be critical that you invest in the right team to accomplish these activities. This endeavor will likely require expertise and knowledge from content creators, data analysts, digital marketers, e-commerce specialists, and retail strategists. Assembling this diverse expert team might take long and be expensive, so your best bet may be to take a hybrid approach. Leverage your existing team and collaborate with an experienced digital partner who will already have the necessary staff in place and preferably demonstrate a track record of success helping their clients migrate through digital transformation.
When all is said and done, it’s important to keep yourself level-headed and grounded in reality. E-commerce is not a viral video; you won’t turn on your website and become an overnight success with thousands of monthly sales and orders coming through every second. This is not a magic solution, it is a hypercompetitive landscape that will require determination, expertise, hard work, and even a little luck for you to get it right and build a business model that is viable long-term. As a result, some significant investments will need to be made upfront in terms of adapting your product or services to appeal to the online consumer, building the right infrastructure and analytics, building and funding compelling consumer-driven campaigns, distribution logistics, personnel, and revisiting your branding. If these changes are applied efficiently and you achieve e-commerce success, that can likely be a significant game-changer for your business.
As you read this, remember, none of these questions are meant to have a perfect answer. These are important questions to ask yourself, but it’s all dependent on your product line and strategy. This is going to require a high degree of e-commerce acumen to make a decision, so before making these decisions, it’s best to first develop your strategy and consult with experts who can help you on this business-altering journey. While setting up your company for e-commerce isn’t necessarily a few clicks away, it is an achievable transition that can prove monumental in the long-term, and the time to take action is now.