Cracking e-commerce in the days of eBay, Amazon and Alibaba is a tricky business. With a survival rate of probably one out of ten FinTech startups, chances are that e-commerce is also a tough business to enter and hold onto. There are countless sources suggesting success factors for companies looking to hack their way into e-commerce, out of which we took six core principles.
Invest in growth, whatever it takes
One of the most important factors that can contribute to success in e-commerce is a clear, rapid growth strategy. Either through organic growth or through active mergers and acquisitions, companies need to put significant effort in constant expansion. Organic or jump-start growth, both have their advantages and drawbacks, and each player will have to access the most suitable way. It is believed that successful brick-and-mortar retailers scale up their digital businesses within two years, and they prepare their businesses for that rapid change.
DO NOT save on website development
The website is the face of the company, which means it should be attractive and compelling enough to earn loyalty and retain customers. If there is no in-house opportunity to develop strong enough digital face, it is important to invest as much as needed in contractors (agencies, designers, etc.) to build a world-class website. In fact, this is not only about the design; it's about functionality, a frictionless purchasing experience, online customer services and an opportunity to resolve any issues without leaving the house.
Assortment and pricing strategy are the livelihood on an e-commerce business so they need to be carefully thought through. Retailers must learn the way to use flexible pricing and merchandising to differentiate themselves in a crowded market.
Bain & Company, a management consulting firm, has offered its version of a golden formula for e-commerce, covering 80% of all items sold online. The company suggests following as the golden rule for merchandise:
- 20% of the online SKUs are special products—these SKUs are the same price in stores but they’re not available to pure plays.
- 30% of the online SKUs are the same price in stores but with different SKU coding—the different coding limits price comparisons.
- 30% of the online SKUs are the same—the in-store price and coding are identical, enabling comparisons with the competition.
Develop a seamless cross-channel experience
Online, mobile and social media presence have to be seamlessly integrated to create a holistic image and shopping experience across channels. Cross-channel integration implies that consumers can solve any issues occurred in any channel through any other channel. In case a customer is not happy with an online purchase, he has to be able to resolve the issue in the nearby store no questions asked.
Moreover, customers should be able to check the availability of the merchandise represented on the website in any store. Intelligently organized and available information on a particular store merchandise can make a significant difference.
Many big-box retailers now offer an opportunity to log into a personal account and check a particular item's availability in a particular store. It tips the scale in their favor instead of retailers not offering information on availability.
Have a dedicated team of digital superstars
E-commerce business should be powered by a dedicated team of digital experts. A successful team of technical and business people can implement capabilities and functions to improve customer experience.
Multiple checkout options
In the days of the mobile, wallets wars would be a mistake to miss on an opportunity to leverage one. E-commerce businesses need to offer checkout options the most convenient for the customer. With APIs being open on the left and right and extremely easy implementation of checkout options, there are no reasons not to provide multiple to the customer.
The variety of payment options given to a customer can be one of the key factors of success in the online shopping industry nowadays. The reason behind the growing number of payment options is the trend of changing payments preferences among the customer base. Those preferences are being influenced and shaped by both financial institutions and disruptive FinTech startups. The variety of options improves a customer’s shopping experience, leading to a lower rate of abandoned carts and higher sales of a higher volume.
As digital becomes the primary place where businesses can win the customer, brick-and-mortar retailers put tremendous effort and pour significant funds to improve the online experience. In fact, since the rise of mobile, it became quite clear that physical presence is sometimes redundant.
E-commerce businesses that understand the tectonic shifts in consumer behavior before they become mainstream will have a greater chance to succeed than those responding to the change. Sometimes, the response can be useless if there are players that saw the change and built their businesses to embrace the new trend.