Considering launching or relaunching an e-commerce initiative? Tom Flierl, VP of Marketing & Business Strategy, breaks down the seven questions brands and retailers must answer to ensure e-commerce success. Download the infographic at the bottom of the article to help keep your e-commerce efforts on track.
1. Who are you?
Is your company a retailer or a branded manufacturer? This question alone has significant implications as each has very different concerns.
Retailers and etailers represent many brands with many SKUs. In these channels, conversion (i.e. product sales) is the end game. Many retailers and etailers benefit consumers by offering a one-stop shopping experience: an array of inventory across brands and product categories. Of course, this means that cross-selling and upselling are great opportunities for retailers and etailers. The consumer experience is largely about product, variety and convenience. Amazon has set the standard.
Branded manufacturers are also seeking conversion. However, the concern of the branded manufacturer is less about product and variety and more about the brand. Telling the brand story, offering useful content, engaging the consumer and developing loyal, long-term customers is the best way to avoid commoditization. Consumers that believe in a brand will buy it — and recent research suggests that they are more likely to buy it from the brand’s website.
This question alone has significant platform implications (keep reading).
2. What is the opportunity?
Have you modeled the opportunity? Start by building a three-year P&L with realistic growth rates. The margins are appealing, but have you also considered the costs of acquisition, fulfillment and technology? The revenue forecast might not be appealing to start, but remember, this is the best marketing channel you have. A recent study suggested that 52 percent of customers visit a manufacturer site first before making a purchase.
Also, don’t forget about the massive impact your online presence has on offline revenue. As of 2015, Forrester estimates that up to 40 percent of offline revenue is influenced by online experiences. How can you afford not to invest? The goal should be to create a great online experience that not only drives online revenue, but more importantly, influences the offline revenue you generate at retail.
3. How strong is your brand?
Organic search is a strong indication of brand strength. Organic search is relative to other brands in the category and the strength of their organic search. If your company’s name is not recognized as a branded term or if your search volumes are low relative to your competition, invest in your brand and be prepared to spend more on demand generation and overall marketing.
In an era of product commoditization, a strong belief-based brand should be a top priority for all companies. Watch our recent presentation on Building Your Digital Brand for more information.
4. What is your three-year vision?
There are a host of considerations when selling direct. The first is clearly understanding your consumer, having a strong brand and position in the marketplace, and then creating an incredible online experience. Other considerations include content, product information, traffic, social, in-store pickup and more. The reality is, few companies have the resources and capacity to tackle everything at once. Clearly defining the business objectives, making an assessment of the market and the opportunity and then developing a multi-year road map and vision are essential to positioning a firm for success.
5. Do you have the right partner and staff?
Did your e-commerce ambitions start with an open-source developer looking for a new project or your marketing manager attending a seminar on online display advertising? If so, you may want to pause and start with an integrated strategy. Most organizations today are not staffed to be truly successful in e-commerce. Having a shopping cart and moving some product on your website may feel good, but incremental sales may be hindering true growth — or costing you more than they’re worth.
The same is true when choosing a partner. Many first generation e-commerce platforms were developed in-house or by IT vendors with little knowledge of e-commerce best practices or skill with customer experience in an omnichannel world.
The digital landscape is rapidly evolving. The skill sets of your staff and your partners must evolve as well. An e-commerce strategy must be grounded in the entire digital ecosystem, with an eye on the future and an understanding of the customer.
6. What is the right platform?
The right platform should be driven by a clear vision, strategy and requirements process. There are many platforms to choose from and many considerations. Retailers and manufactured brands have different concerns that should be addressed when developing requirements for a platform. Traditionally, sophisticated manufactured brands have used content management systems (CMS) to build incredible brand experiences and engage consumers with useful branded content while retailers have used e-commerce platforms to push product and conversion.
Today, the lines between CMS and e-commerce are blurring with many leading CMS systems integrating shopping carts and many e-commerce platforms building blog and landing page functionality. Ironically, many brands are now jumping onto platforms originally designed for retailers and primarily pushing product with limited content, while retailers are slowly moving to CMS platforms and seeing the benefits of scheduling, workflow and relevant content. REI is a great example of a retailer that has focused on content and commerce with lots of “how to” content that drives organic search and immediately ties back to the shopping cart.
For more on the value of content and commerce, check out our article, 'How to' Grow E-Commerce Through Content.
7. Are you prepared for change?
While a three-year vision and road map are crucial in determining priorities, iterations will occur along the journey. Markets are being disrupted; influence in the path to purchase is changing; and consumers’ shopping habits are evolving. Be prepared for a fun ride!