Let’s face it. The e-commerce marketplace is saturated with retailers who offer the same products at the same prices and often on the same platforms. So how can a small business stand out in this environment?
Think about it this way: your e-commerce strategy is not just about you, it’s also about your customers. When shopping for something online, customers will typically choose one of three options:
- Buy from a known brand that they’re familiar with using their traditional browsing methods (e.g., visiting an online store and adding items to their cart).
- Research a specific product using an online search engine (e.g. type in a product name, and view the first few results on a search engine).
- Visit and shop at an e-commerce website that they’ve never visited before (e.g., someone searching on a search engine to find a product).
So your business’ e-commerce strategy must focus on marketing products and services to customers who are most likely to purchase these. This means that customers who come from an existing brand (say, “MySpace”) will still be familiar with the products when they enter your website, but they may not be as easy to convert as those customers who could visit your website for the first time.
What is an E-Commerce Sales Strategy?
E-commerce sales strategy is the process that a company such as Amazon implements to convince customers to buy a product on their website, and is divided into two main categories: pricing strategy and marketing strategy. Pricing strategies are aimed at making a maximum profit while marketing strategies are aimed at increasing profits through customer acquisition.
How does it work?
Pricing strategy may be used by e-commerce companies to have competitive prices in comparison with those of traditional retailers or may be based on providing low retail margins for the sake of accessibility. On the other hand, marketing strategies might include using personalized targeting techniques or always offering free shipping.
Why is it a Good Idea to Know E-Commerce Sales Strategy?
Knowledge of e-commerce sales strategy can be beneficial for entrepreneurs who are looking to build a startup business or for existing companies who want to increase profits. Marketing strategies can assist in new customer acquisitions and will also have an impact on customer retention, whereas pricing strategies allow the company to compete against other companies in the same market. It is important to consider the different strategies and marketing methods when building a sales strategy to make the most of a company’s potential.
Who are the Major Players?
The top four e-commerce companies based on the size of revenue are Amazon, Apple Inc., eBay, and Alibaba. These firms use different pricing and marketing strategies to acquire new customers and keep existing ones. There may be a commonality in pricing strategy among these e-commerce companies, but overall they each have their unique strategy. For example, Amazon has become known for its low prices (although this has been argued) whereas Alibaba focuses on providing low retail margins for both businesses and consumers (to its Chinese background).
Factors to consider when building an E-Commerce Sales Strategy
The first step in developing an e-commerce sales strategy is to conduct primary research to determine the most important factors that will have the greatest impact on your company. Researching these factors will allow you to prioritize your company’s goals and objectives, and will help you in identifying the strengths and weaknesses of your competitors.
The following are some of the main factors to consider:
- Customer Satisfaction: How to get customers, keep them and make them return in future business transactions.
- Competitors: Where are the competitors? What are their unique strengths and weaknesses? And how can I best exploit their weaknesses?
- Product: What products do you offer, and what’s better than others? Can you create unique products and services?
- Pricing: How much should a product cost ensure a profit margin for the company, but still be within the price range of customers looking for value-for-money products or services?
- Promotion Method: Which method is best suited to promote products/services to customers? Is it through social media or paid advertisements? (ie Google AdWords).
- Technical Issues: Are there technical issues in your webpage making it difficult for customers to navigate? This will affect sales.
- Support: What kind of support do you offer? Is there free support? Is there a service desk and how easy is it to contact them?
- Verification Process: How do you verify that a customer is who they say they are? And will this save you money in the long run as you don’t need as many customer accounts as say eBay and your verification process can be automated?
- Payment Process: How easy is it for customers to pay for and receive their orders or products? What is the best way to take online payments? Do you accept all major credit cards, payment plans, etc?
- Promotional Needs: Do you need promotional tools? Is it best to stick with the email newsletter or other marketing methods to accomplish your goals?
- Distribution Methods: What is the easiest and most cost-effective way for sending orders to your customers? Can you use the same carrier for all orders or do you have different carriers for different types of customers?
- Website: What about your website? Does it show a positive image of your company and how easy is it to find products/services on your site? Is it easy to browse through the entire site?
- Cost of Website: What are the cost of maintaining a website and the cost of replacing the website if you need to change it in the future? Can you just change certain parts of the site or do you have to rebuild from scratch?
- Integration with other systems: Is your company integrated with other systems like accounting software, inventory management software, etc? If so, what is the cost associated with integrating the systems, and will it be cost-effective for you to integrate with other systems?
- Customer Service: How does your customer service process work? Who handles customer complaints, returns, and the cost of customer service response time for various problems (as in situations like bad summer weather that may result in delays).
- Marketing Strategy: How does your company market the products and services you offer? Is this best done through a direct marketing campaign or promotion through social websites?
- Promotional Tools: Are there any free promotional tools that can increase sales such as email newsletters, coupon codes, and social media resources like Facebook and Twitter? These promotional tools are also known as referral marketing tools.
Thus, e-commerce sales strategies are more than just relying on price reductions to attract the maximum number of customers. The right strategy is always a key to success, along with a strong product, service, and support.
An E-commerce sales strategy is a systematic technique for maximizing business results by adapting and customizing the best sales strategies to the local markets where the company conducts its business. Each company’s e-commerce sales strategy is based on its individual goals and objectives, as well as its strengths and weaknesses compared with its competitors. As online markets evolve, it is important to understand how existing as well as new players in the market will generate revenue through various marketing channels such as social media, online advertisements or affiliate marketing, etc. This can be done by conducting primary research before developing a comprehensive e-commerce sales strategy.
(Above mentioned article is a Consumer connect initiative, This article is a paid publication and does not have journalistic/editorial involvement of IDPL, and IDPL claims no responsibility whatsoever.)