If you were to go onto the internet right now, looking for a product, no doubt there would be hundreds and possibly thousands of e-commerce websites all hosting the same product, offering the sale to you in different ways and at different prices.
E-commerce continues to see a growth of double digits each year. Online shoppers spent more than a mammoth $225.5 billion in 2012 (nearly a £150 billion) according to the U.S. Department of Commerce. This is an increase of 16 percent from the previous year of 2011.
For some business entrepreneurs who’re wondering what to do for their next venture, the endless allure of a digital retail experience is simply way too much to pass upon. Without having to purchase or maintain a physical store, start-up costs are low and the scale to which it can reach is practically unlimited. It’s an attractive place to be and the endless possibilities bring people to e-commerce. A day rarely goes by without hearing about a new company finding digital success having been formed from nothing.
Like all good things in life, there’s always something to sour the positives: the barricade of digital stores swamping the marketplace with similar value propositions can be a tricky thing to bypass. So, in order to become a successful e-commerce company in the long run, here are our six tips that you should consider:
1. Niche for now
So, you’re certain you have a great idea for your e-commerce business? Chances are at least a hundred other businesses are running with the same ideas and many of them already have it running online. It’s important to break down your initial ideas into segments, allowing you to narrow your focus on to different sections of your idea. This reduces any competition from the outset.
The best example we can offer is Airbnb. When the company launched it was an online platforms for renting space on the airbed or sofa of a stranger. This was a very focused play, they didn’t immediately launch the offers of home or apartment rentals which came later. Instead they offered a niche service that’s unheard of, this perhaps having been there success.
So, inspiration from a success story, Airbnb became successful and evolved by expanding into other areas of business. This is the key for any e-commerce company looking for recognition, start “small”, start niche. Once you’ve mastered that particular part of the market you can mature and look towards adding different focus areas, growing the business further.
2. People can’t touch what you’re selling
When you’re developing your ecommerce experience, remember that the services and products you have up for sale are initially virtual for any potential customers. This is a huge disadvantage for any ecommerce company, as opposed to a physical shop where they can visit and get a hands on experience of the product. Experiencing something in person can be critical for the process of conversion to a sale.
With this in mind, the design of the product becomes critical, as it can often fill the void between virtual and in-person interactions. At the most basic level this means appropriate product/service images, descriptions and categories must all be at a high level, enhanced by extra features to instil confidence in the buyer.
Serena & Lily are an upscale home décor business in the world of ecommerce. They excel at this because they offer on-brand product descriptions that speak about the things their target demographic cares about most. They also provide a “Make Your Bed” feature, so users can mix and match bedding combinations and see what they feel would look best on an actual bed. This transforms the virtual experience into something more touchable, interactive and concrete.
3. Design is important but it’s also got to work well
This section is easy enough. In any digital marketplace an effective, smart design will rule above the rest, resolving the problem between a virtual and an in-person product or service experience. While the design is critical, the engine inside must run smoothly.
Performance matters. That’s it. A slow website is unsurprisingly a huge barricade for any company. According to Compuware, every 2 second of a websites loading time on your marketplace will equal an abandonment rate of 8%. So, if your site takes 8 seconds to load, you potentially lose 32% of your possible income straight away. That’s a huge number. Dropping the load time from 8 seconds to 2 increases the rate of conversion by 74%.
That’s why it’s important to craft a site that’s built with speed and ease in mind. Customers don’t like waiting, they’re internet shopping for a reason. They want products pretty much instantly and easily accessible, so from the home screen to the credit-card entry page a smooth experience must be made. This means that spending time on design will improve your website dramatically. Doing it with a firm understanding of your site, its plug-ins, cloud, provider mechanics, purchase process flow and more will help you along your way. It’s incredibly easy to craft a marketplace now-a-days, but to build a marketplace that runs smoothly and efficiently can be an experience in itself.
4. Don’t go chasing trends, stick with your community
Tadashi Yanai, CEO of Uniqlo’s parent company once said: “We don’t chase trends.” Those who follow his words would be people of wisdom, so we recommend you do the same.
Every year a new trend will crystallise in the e-commerce space, trends that we think will improve our chances of business and position us for a greater success rate, both immediate and long term. In reality, depending on your business, trend-chasing can mostly be a diversion to success, as something things don’t work for every single company.
The best example of this is gamification. Whilst this is valuable in certain contexts, some companies have integrated a pointless gaming mechanic into their purchase process. Why? Simply to follow the latest trend. Sometimes, a trend can even become the business model of the day. Flash sales? Whilst gamification offers flash sales, other timely trends can be, and have been, implemented successfully. They don’t necessarily work for everyone and should be considered thoroughly.
What’s agreeable to all is how community is the core to any e-commerce marketplace.
Keeping a sense of community alive and nurturing it into a successful being across your company is key and this is where social media gets introduced. Social media integration enables interaction on and away from your website, allowing your users to promote products and services to all their friends/followers whilst sharing their experiences. This is a brilliant process of advertising too as word of mouth is and always have been the main avenue of customer awareness. The recommendation aspect plays an important role for lead-generation, but it’s also a centre for your community to develop and grow all from the influence and words of your customers. It allows a level of engagement that wouldn’t necessarily be possible. So, whilst other e-tail trends come and go, the importance of community will always remain.
5. Collect data and personalise
Building a great e-commerce community means speaking to each user as an individual, not as part of the crowd, both pre and post purchase. A successful e-commerce website incorporates multiple end-user points throughout as part of the total experience. Each interaction is an opportunity for insight from that person, giving them a more personalised experience from your company. This in turn enables targeted campaigns to drive retention, reduce abandonment from existing customers, and nurture long-term brand loyalty. Amazon is a great example of this, being a website that personalises itself based on your purchase and search history after each visit, moulding an experience that’s specific to a customer’s interests.
In order for this to develop, a well thought plan for analytics capabilities and a comprehensive marketing plan must be in the pipeline, ready for the launch. Data will be the lifeblood for on-site product/service discovery, as well as targeting personalised campaigns, with third-party automation vendors such as InfusionSoft, Marketo and Silverpop providing such technologies.
6. You’ve got to spend money to make money
Last but nowhere near least, always remember that in building a truly successful company takes time, especially from the revenue and profit point of view. After your shop is successfully set up, don’t expect to see the money just roll in straight away. As it is with any business, it takes more than a fair share of growing pains before you begin to see the traction you want. Calibrate your expectations according to the outcome.
These are our 6 top tips to keep in mind when starting your e-commerce company. What else should we consider?