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How to Beat the Odds and Win at the Ecommerce Game: The Simple Steps to Take If Your Online Store is Failing.

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Everyone, it seems, wants to get into the ecommerce business. Big companies, small companies, entrepreneurs, venture capitalists, get-rich-quick dreamers and your aunt whom everyone has told, “You have such great gift ideas, you should start your own online store.” They may have been reading some of the many books, blog articles or watching video courses about “the wonderful world of ecommerce.”

While there are many opportunities to create successful new ecommerce stores today, and there will be increased opportunities tomorrow, the successes will be the result of hard work and application of the basic principles of ecommerce marketing, not just of someone’s bright idea and the desire to turn that idea into an ecommerce business.

The Major Trends in Ecommerce

And the world of ecommerce is changing in ways just a mere 10 years ago no one could have anticipated. Before you start thinking about creating your next ecommerce business, take some time to ponder the implications of today’s major trends.

If they have not already affected your business, they will certainly have an impact on you tomorrow.

Ecommerce Stores Are Consolidating

Lone wolves are out there, but they are getting rarer. Many ecommerce companies are actively acquiring smaller companies to take advantage of the efficiencies that come with large-scale merchandising, production, and fulfillment.

These strategic alliances let small companies gain access to deep pockets and major fulfillment muscle, and offer large ecommerce ventures a way to expand without incurring the heavy costs of starting up a new business.

Small & Medium Ecommerce Stores Are Growing More Specialized

Ecommerce conglomerates like Amazon or AliExpress may be growing, but small and medium ecoms themselves are becoming more specialized. Gone is the era of the big ecommerce store offering something for everybody.

In its place are thousands of online stores that offer specialized merchandise to highly targeted groups of consumers.

Online stores offer dental supplies, apparel for wheelchair-bound adults, bird-related accessories, teddy bears, new age merchandise, butcher equipment, astrology supplies, and much, much more.

Specialty merchandising has led many businesses to spin off new ecommerce stores from established ventures. For example, one of them, which sells greeting cards, gift wrap, and gift items, has created two new stores offering products for teachers and faith-inspired products.

The new ecommerce ventures are expected to build new business by offering merchandise that will appeal to a specific segment of the marketplace.

Ecommerce Stores Are Finding It Harder to Offer Exclusive Merchandise

This demand for specialized and segmented online stores has increased the pressure to find new and unusual merchandise that can be offered exclusively by mail.

But because the retail trade has also become highly segmented, it is harder to find fresh merchandise unavailable in stores.

But “fresh” merchandise is essential – especially in a highly segmented ecommerce devoted to a narrow category such as energy-efficient light bulbs or high-quality gardening tools. In response, some ecommerce stores have broadened their selection.

A gardening tool online store has added planters, garden furniture, and other garden accessories to widen its customer base beyond its core of master gardeners.

Others have advertised services instead of products, like the ecommerce that added interest and boosted sales by advertising Caribbean golf cruises and tours of Scotland in its golf equipment ecommerce promotions.

The Ecommerce Marketplace Only Gets More Competitive

It is estimated that there are more than 20 million ecommerce sites worldwide – and new ones start up every year.

More ecommerce stores means greater inbox glut, stiffer competition for new customers, and higher start-up costs. Yet people persist in launching new kitchen-table enterprises – and some succeed.

Customer Service Can Make or Break an Online Shopping Site

Today’s most successful ecommerce companies invest in customer service. They hire good people and give them good tools and training. When times turn tough, companies with stellar customer service operations still flourish.

And when online stores offer similar merchandise at similar prices, great customer service can catapult one to stardom… while lousy service holds the other one back.

Customer service is critical because consumers expect more. When people know they can order gifts on December 23 and still have them under someone else’s tree by Christmas, why should they spend time with a company that offers anything less?

In the best-run companies, all orders are picked and out the door in less than 24 hours. Some invest in same-day deliveries. If you cannot meet these benchmarks, you might consider holding off investing in anything ecommerce-related until your fulfillment operation is on solid ground.

Ecoms Are Achieving New Levels of Production Quality

Digital photography, desktop video editing and virtual/augmented reality (AR/VR) are leveling the ecommerce playing field.

There is still room for the simple one-picture-and-a-short-description online shopping experience, but customer expectations have risen along with production standards.

A sloppily prepared and produced promotion will be forgotten in favor of an ecommerce that takes its production seriously.

Ecommerce Sites Are Becoming Even More Promotional

Like their retail counterparts, ecommerce stores are seeking new ways to build market share and customer loyalty.

Discounts, rebates, early purchase discounts, house credit, free shipping, deferred payment plans, and frequent-buyer programs are growing more common.

Ecommerce Stores Are Looking for New Markets

Lines between consumer and business-to-business ecoms are beginning to blur as ecommerce stores cross categories to build new business and smooth out sales cycles.

Companies are repackaging consumer gift ecommerce businesses for the corporate gift market, e.g. selling professional art supplies to the creative person at home or creating stylish office furniture online stores for the home office market.

Is there consumer demand for your business-to-business products? Could your consumer products work in a business environment?

Ecommerce is Going Global

As the local market reaches saturation, many companies are looking overseas for sales growth.

Some large companies are setting up overseas operations to also reach less-developed markets in South America, Asia or Africa – but the investment is high and the risks are significant.

Smaller companies are concentrating on selling to more developed markets.

Considering that translation and shipping costs go down every year, are there opportunities abroad for you?

Ecommerce Companies Are Exploring New and… Forgotten Alternatives

Live commerce or livestreaming ecommerce coming from Asia.

Amazon reviving online the QVC-like hour-long product demonstrations.

Package inserts with additional discounts and specials.

Direct mail promos as well as traditional, print catalogs coming back.

Phone ordering.

Mobile apps.

Subscription models.

Bill me later schemes.

Product customization.

Buying directly from social media storefronts of Instagram or Facebook.

This all means that ecommerce is always changing and there is so much more to come.

But while all of these alternative formats and tactics help attract new customers, they will supplement but not replace, for now, the traditional ecommerce store. Because the traditional ecommerce store is still the easiest to browse though and easiest to buy from!

Success and Failure in Ecommerce: What Traps to Look Out For

What constitutes the major elements of success and failure in the ecommerce field? Here is a handy list of 9 basic factors that spell the difference between success and failure.

The Right Thinking

One of the key things you find in every successful ecommerce is a blending of two important attitudes. First of all, there is an entrepreneurial spirit throughout the entire organization.

There is an openness to new ideas, a willingness to explore previously uncharted avenues of opportunity. Although it is difficult to describe in concrete terms, there is a sense of adventure that continues long after an ecommerce businesses has been established.

It is also important to have performance marketing and classic “mail order” thinking, a recognition that you are dealing with people who have never met you face to face and have to trust you when you promise to fill their orders.

Many new ecommerce sites are started by entrepreneurs whose past experience has been in retailing. And they continue to think like retailers. But dealing with a sight-unseen audience is far different from dealing with the same kinds of people face to face.

Successful ecommerce calls for different product selection and presentation. It forces you to counteract your inability to deal directly with customer questions and concerns at the moment they arise by supplying answers in advance.

And once you have attracted new customers, performance marketing thinking is an absolute must.

A Unique Selling Proposition

One element that distinguishes all of the successful ecommerce stores is that they have been able to establish a USP – a unique selling proposition that distinguishes them from other ecoms in the marketplace.

Every ecommerce marketer must battle for a share of the consumer’s mind, attempting to be remembered as the source from which to buy specific kinds of products.

Far too often, a new online store tries to capitalize on the success of existing online shopping sites by copying their product selection, presentation techniques, and/or copy style.

While keeping abreast of your competition’s every move, using ecommerce spy tools etc. is all fine, but rarely if ever the copycats are able to win out over the stores they copy.

Particularly if they copy ecommerce businesses that had already gained a share of customers’ minds with a clearly recognized unique selling proposition.

To gain a share of mind, an ecommerce should be number one in something meaningful to its customers. Everyone, for example, claims to have quality products.

There is nothing unique in that. But online stores that have been able to communicate how their products (or services or prices or offers) are superior to those of others manage to survive and grow.

The key thing is to find something someone else is not doing and then use that as a starting point for building a convincing USP.

Involvement of Management

Another factor that distinguishes the winners from the losers is the extent to which top management is involved in ecommerce operations.

Over the years, I have had contact with different ecommerce organizations. And I am still amazed by the degree to which everyone, from the CEO down, is involved in the day-to-day operations of every profitable ecommerce venture.

If you would like to delegate it all, the ecommerce business is not for you.

When you take a look at some of the ecommerce failures, you discover they were started as a hobby, rather than as a business. Someone probably thought it would be great fun to make the rounds of trade shows and vendors to pick products and to work with the artists and copywriters to create a beautiful product selection, then leave the nitty-gritty to hired hands. It just does not work that way.

There is all too often a desire to start changing things once they become old hat. Successful ecommerce marketers, however, recognize that it is what they are doing now that is attracting their customers.

As pointed out previously, the basic formula of ecommerce marketing is that Prospects = Costs; Customers = Profits. In other words, you spend money (sometimes far more than you get back) to make a prospect buy from you for the first time.

Profits come when you can go back to satisfied customers and get them to buy again and again. When you change too much, you turn your old customers into prospects again.

Instead of an “old friend” coming to call, the revised ecommerce site and its promotions are a “stranger,” and you have to resell your customers on buying from you. That costs money and is a drain on profits.

Successful ecommerce marketers are willing to stick with what is working, even when it is boring to them. Of course, when what you are doing is not working anymore, it is important to change. But do not change simply for change’s sake alone.

Long-Range Ecommerce Strategy

There are few instant successes in the ecommerce field. As mentioned previously, you should allow at least three years before you can fully evaluate the potential of a new ecommerce.

And since you invest to bring a new customer into the fold, it takes time to make back those dollars that have been invested. While some large ecommerce marketers work on five- or ten-year plans, most seem more comfortable working on a three-year basis.

One of the terms you hear over and over again in the ecommerce field is “the lifetime value of a customer.” This represents the amount of profit you can expect an individual customer to generate while remaining an active buyer.

My suggestion is that you make such calculations on a three-year basis. This involves considering the gross profits you can reasonably expect from the merchandise the customer is likely to purchase from you during that time, less the costs of promotions you will be sending to the customer during that period.

Once you know that figure, you can make a reasonable judgment about how much can be spent to bring an individual from a list of prospects onto your customer file.

One of the problems many retailers have faced when they have tried to join the ecommerce realm is an unwillingness to establish a separate ecommerce operation.

They have someone create an ecommerce presence, but they fail to back it with dedicated merchandise, special fulfillment, and customer-acquiring marketing budgets, as well as a way to measure its true effectiveness.

When they do not immediately find extra profit at the bottom of their financial statements, they assume the ecommerce venture is a failure. Actually, the failure was a lack of performance marketing thinking, coupled with the absence of long-range strategy.

A Willingness to Gamble

Although we live in an age when highly complex research and evaluation programs are what drive many of the most successful companies, the majority of successful small to medium ecommerce businesses are driven by an old-fashioned gambler’s instinct. This, of course, goes hand-in-glove with entrepreneurial thinking.

Expecting losers is a part of the game. The successful ecommerce marketers average between 20 and 33 percent losers among the products included in each promotional campaign.

They do not cry over them. They just eliminate them from the next promotion and spend their time seeking more products like the winning items.

And they know you have to give new products a try or you will just find yourself standing still. You expect to have losers and simply accept them as one of the elements of a successful ecommerce business.

But if you have spent your life in a business where any loser is a symbol of failure, it is difficult to change clothes and become a gambler. Yet a promotion of nothing but “safe” products is most often a dull promotion – and dull promotions are most often unprofitable promotions.

The Right Product Selection

Just because you like certain products, and just because there are products people are buying from someone else, does not mean they are the right items for your ecommerce.

What is important is that your audience wants to buy those products from you. That is something successful ecommerce marketers fully understand.

An ecommerce store is not primarily a medium for changing needs into wants or for convincing people they should want to buy specific products from you.

Every online store has an authority level that communicates to an audience that it is the right source for certain products. Making sure all of its products fit within that authority level leads to a stronger ecommerce business, one positioned to lead customers to think first of that online store as the logical source for specific kinds of products.

Listening to customers is a way of life for the successful ecommerce marketer. The secret is to let your customers decide which products your should carry. An important rule: Trade on your winners and say good-bye to your losers.

Every online store, then, becomes a product testing vehicle. If your customers tell you they do not want to buy a new product from you or do not want you to continue to carry an older product, listen carefully. Sales records tell no lies.

It is almost impossible to take a loser (a product your customers have failed to support with their orders) and turn it into a winner. You may be able to turn a marginal loser into a marginal winner by presenting it in a different way. But when you have an out-and-out loser, kill it ASAP.

When you have a winner, though, you may be able to make it an even bigger winner by new presentation. Or you can boost sales in future promotions by presenting more products like those your customers have told you they really want to buy from you.

Exclusive Products

Successful ecommerce marketers follow a set of very simple but important guidelines in choosing products for their promos. They try, where possible, to feature “exclusive” products.

An exclusive may be only marginally different from similar products found elsewhere, but even a little difference can increase sales. Perhaps you can supply the product in different packaging, in a different color, with your own special identification, in a unique combination with other products, at a different price point, or in some other way that permits you to say it is exclusive with you.

Such identification suggests to the buyer, “Do not look elsewhere. If you want this product as we have presented it, it is available only from us.”

It is also important that all products fit your ecommerce’s image. Products that do not seem to fit confuse the customer. And confused customers usually turn to another source to do their buying.

The Importance of Customer Database

The cornerstone of any performance marketing business is the customer database.

The secret to success is the amount of attention the ecommerce marketer pays to customer segmentation. They recognize that no database is merely a single list, but contains categories and subcategories.

And each of those segments responds differently to various promotions. By carefully analyzing each category (including everything from demographics, on-site behavior and original sources to buying patterns and types of products bought), the winning ecommerce marketers are able to tailor promotions to true prospects and eliminate others.

This way they keep promotional costs to a minimum and profits to a maximum.

An Entrepreneurial Organization

The flow of ideas throughout an ecommerce operation is vital to its success. Too often, companies inhibit new ideas by an attitude that says, in effect, “We are already better than anyone else” or “We can do no wrong” or “It is company policy” or “We tried it before and it did not work.”

This has been especially true in established organizations, such as retailers and package goods companies that have tried to integrate ecommerce selling into their marketing mix.

If everything that might make an ecommerce venture work is perceived as a threat by entrenched middle management, the ecommerce has a much smaller chance of success.

Most major corporations have a rigid staff-and-line structure. They operate with committees, which most often move slowly and carefully to protect individuals from having to take direct responsibility for specific decisions.

These slow-moving committees also tend to create a barrier which closes the door on input from others – unless they prepare detailed reports which can be studied and discussed by a committee.

But successful online stores are more often highly entrepreneurial businesses where everyone’s input on an informal basis is welcomed and quick decisions are common.

The fast-moving entrepreneur, however, is a bastard child in the typical corporate structure. And he is told to step aside and await an eventual decision by the committee.

Emphasis on the Back-End

Far too few new ecommerce businesses recognize the importance of all that happens after the promotional campaigns hit prospects email inboxes or social media feeds. But that is where the real successes are made and where the biggest failures occur.

Unfortunately, too many organizations fail to recognize that every contact with a customer is a marketing opportunity. Often everything that occurs after the promos are launched becomes the responsibility of those departments within a company that may consider customers “their enemy.”

Operational personnel often believe their operations would run more efficiently if they did not have to deal with “difficult customers.” Financial people often find their lives complicated by customers who do things that lead to unbalanced books.

IT departments find that customers create problems for their computers. The efforts of such people are measured on how efficiently they run their departments, so they strive to get rid of customers who reduce department efficiency.

I am not suggesting that marketing management should be in charge of everything in a company, but “marketing thinking” must be instilled throughout the entire organization of an ecommerce marketer.

The successful ecommerce sites develop systems that enable marketers to monitor every point of customer contact.

While it may be operationally efficient to batch orders and level out peaks and valleys, one of the key elements in ecommerce selling is instant response.

As a general rule, any customer request – be it an order or an inquiry – should be turned around within 12-24 hours tops. Impossible, say the losers. Absolutely necessary, say the winners – many believing that even 12-24 hours is too long.

Ecommerce winners add a marketing touch to every package. There is no better time to sell customers on wanting to buy from you again than at the moment they have just received one of your packages.

All of the little things that help make opening that package an enjoyable event tend to build customer loyalty and, therefore, future profits. Among the losers were many who simply turned this important responsibility over to low-paid shipping clerks, while the marketing people went on to concentrate on their promotion.

The winning ecoms never stop selling. They look for every opportunity to offer something new and exciting to their customers, such as package inserts or unadvertised, publicly unavailable products and specials.

And they constantly recognize the value of the online chat and phone in building a personal relationship with customers. They remember that truly caring about customers is important.

Ecommerce Strategy Checklist

If your goal is to create an ecommerce business that generates orders because it meets your customer’s expectations, is a pleasure to shop, and is easy to use and order from, before you start, check to make sure you have finished the necessary strategic groundwork.

Before you start your ecommerce venture:

  1. Define your product or service, your company, and the marketing niche you intend to occupy. Think of keywords that describe your company and keywords that do not describe it. Why is your merchandise unlike other merchandise? What spot in the marketplace can you stake out as your own? What need can you fill that the competition is overlooking? The most successful online stores occupy clearly definable niches. These are the ones that come to mind instantly when you think of outdoor sporting goods, women’s apparel, gardening, office supplies, and other categories. What niche can you “own”?
  2. Develop a unique identity that will let you succeed in the marketplace. Determine your ecommerce site’s unique selling proposition (USP). It is the result of a unique blend of your merchandise, your pricing strategy (upscale? discount?), your offer, and your presentation, including the design, video and photography.
  3. Define your competition. What is its niche? How can you differentiate your company’s products from the competition’s? If you can differentiate your company’s products from your competition’s, you have found a niche.
  4. Define your customer. In today’s data-rich environment, there is no excuse for not getting to know your customers. Collect and retain information about your prospects and customers so you can track their buying habits, assign special offers to highly responsive segments of your market, and personalize your promotions whenever possible.
  5. Choose products carefully. Choose products and services that fit the image of your ecommerce niche, have a track record of successful sales and a decent profit margin, are from a company that will ship on time, and will make you money. Look for quality items, and you will reduce returns and headaches later on. Shop the way your customer will. Be thorough. Be assertive. Be picky!

Summary or Top 10 Reasons Why Ecommerce Sites Fail

  1. The company lacks a sound inventory control plan.
  2. Inadequate fulfillment/customer service.
  3. Financial skills are inadequate to make the ecommerce profitable.
  4. The company underestimates the time it takes to build a customer database.
  5. The acquisition of prospects is haphazard, at best.
  6. The company does not understand the creative subtleties of an ecommerce or its promotional campaigns.
  7. The company does not know enough about who its customer is.
  8. The ecommerce fails to establish a clear identity or niche for the company or the merchandise.
  9. The company has difficulty getting financing or is undercapitalized.
  10. The company fails to have a plan for where it is going.

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The expert's thoughts on direct response - growth hacking - performance-based marketing activities - DIRECT MARKETING

About Me, Rafal Lipnicki.

the direct / performance marketing consultant with a strange sounding name

Who.

Not your usual "guru" but a real-world performance marketing & innovation consultant based in Europe and an experienced senior executive at leading multinational companies.

What and Where.

I am a consultant for hire, working remotely and on-site all over the world (but Europe is always preferred). See my consulting services page for details.

How.

Contrarian advice most of the time. Document-based audits, workshops, one-off projects, mentoring programs, and more.

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