The e-commerce business industry is exploding. Shopping online used to be a convenience and a luxury. Now – it’s a necessity. As the pandemic continues, many companies have pivoted to online-only sales to survive and avoid disruptions and keep employees and customers safe. Aspiring entrepreneurs who are considering changing their business plans to launch companies online rather than in brick-and-mortar spaces need to understand that it takes more than a digital storefront to create a thriving e-commerce enterprise.
Many folks want to know what the e-commerce business is all about and how to be successful in it. If your goal is to make a quick buck – that’s all you’ll do. The goal should be a scalable, profitable business that lasts. You have to have a long-term vision for building an asset that brings true value to the market.
What is E-commerce
Ecommerce, also known as electronic commerce or internet commerce, refers to the buying and selling of goods or services using the internet and the transfer of money and data to execute these transactions. Nearly every imaginable product and service is available through e-commerce transactions, including books, music, plane tickets, and financial services.
Types of Ecommerce Models
Four main types of e-commerce models can describe almost every transaction that takes place between consumers and businesses.
- Business to Consumer (B2C):
When a business sells a good or service to an individual consumer (e.g., You buy a pair of shoes from an online retailer).
- Business to Business (B2B):
When a business sells a good or service to another business (e.g., A business sells software-as-a-service for other businesses to use)
3. Consumer to Consumer (C2C):
When a consumer sells a good or service to another consumer (e.g., You sell your old furniture on eBay to another consumer).
4. Consumer to Business (C2B):
When consumers sell their own products or services to a business or organization (e.g., an influencer offers exposure to their online audience in exchange for a fee, or a photographer licenses their photo for a business to use).
What you need to succeed
While the e-commerce economy is poised for significant growth in the coming years, you can only expect to see results if you approach it in the right way.
Ecommerce businesses fail for all kinds of reasons, but those that succeed have a few important things in common. It takes more than just setting up a store and shipping product to grow and sustainably scale a business. It would be best if you had a firm understanding of what makes the e-commerce industry and its customers tick. Everything else your store needs should flow from that knowledge.
Now, let’s talk about what that “everything else” entails.
Put as much effort as you would into a Real Store.
First and foremost, just because the medium is different doesn’t mean your thinking has to be. You have to translate it into digital. If you’re running a storefront, you know location and awareness are everything. Instead of an address, think about where people are searching and set up shop to look for your service or product. Sometimes that could be on Facebook, Instagram, or Twitter. Look up tips and try your best to optimize your listing, just as you’d spend time and sweat making your brick-and-mortar welcoming to customers. Remember, this is your space; it’s worth the time and effort to make sure everything looks good for when someone visits.
A Brand Differentiator
If we had to point to one factor that drives the e-commerce industry’s sky-high failure rate, it would be competition. With all that money flowing online, everyone’s itching for a piece of the pie. Consumers can find some products that are identical across hundreds of e-commerce stores.
Too many online stores try to remedy this by competing on price and price alone. It’s a race to the bottom. And if that doesn’t sound like a recipe for business success, that’s because it isn’t. To be successful, your e-commerce business needs a differentiator that isn’t price—something unique to your store that you can do better than your competitors.
Consumers buy from online stores that set themselves apart from the crowd. How can you do that? You need to provide one or more of these:
- A better product: Faster, easier to use, customized…a better product will always set your business a notch above the rest.
- Powerful brand values and mission: Customers are also willing to spend more with businesses whose values align with their own. Being transparent and dedicated to causes you care about can help you win those customers over.
- Better customer experience: As many as 86% of consumers are willing to spend more for a better experience. Providing a seamless online shopping experience and friendly, empathetic service can be a huge boon for your business — without slashing revenue.
Target Mobile-First Audiences
The market today for e-commerce is mobile, personal, and engaging. Many of the tools to sell your product online are readily available if you take the time to learn how to maximize them. Your marketing initiatives can seamlessly be optimized for mobile through Facebook ads, Instagram ads, or Google ads.
Top-Notch Customer Experience and Service
Speaking of customer experience, it’s more than a competitive advantage in today’s e-commerce marketplace — it’s a necessity. In e-commerce, smaller stores and brands compete more directly with large brands and marketplaces (like Amazon and Walmart.) Personal, empathetic customer experience and service is your best tool for outshining names like that.
What does that really mean, though? We talk about customer experience all the time, but a lot can get lost in translation if you aren’t a seasoned marketer or customer support professional.
When we talk about providing a top-notch customer experience in e-commerce, here’s what we mean.
Around 45% of US consumers will abandon an online transaction if their questions or concerns are not addressed quickly. Exceptional customer service is critical to your business’s long-term success. You can create self-service content and detailed FAQs page, offer live chat support, incentivize product reviews, and build trust with your customers. All of this will give your store valuable social proof and create repeat customers, five times cheaper to acquire than new ones.
Pick the Right Distribution Channels
The No 1component you need to bring your business online is distribution. How will you reach your audience? If you can sell on Amazon, for example, you’re likely ready to go. Why putting a website up and hoping people will come isn’t going to work from the start. I would start by thinking about reaching your target audience, perhaps by looking at peripheral products and then deeply researching how to win in this growth channel. Some distribution channels may work right away (eBay, Amazon, etc.), whereas others, such as SEO, may take months of preparation and effort before you start seeing results.
A Great Marketing Strategy
One of the biggest mistakes e-commerce business owners makes believing launch day is where the hard work ends. On the internet, it’s easy for a new or small online store to get lost in the shuffle. That’s why a great marketing strategy is the only way to build up your store, spread the word and win customers.
Here are two things every business’ marketing strategy needs:
- A deep understanding of your target market: What are your customers interested in? How do they talk about your product? How does it impact their lives? Where do they hang out (both online and off)? Before you sit down and build a marketing strategy, you need concrete answers to all of these questions and more.
- A plan for standing out from the crowd: You know from the first section above that your business needs a way to differentiate itself — your marketing strategy needs to emphasize that. All of your marketing tactics should center around setting your business apart from the competition, so you occupy a distinct place in customers’ minds.
Finding Success in Ecommerce
Ecommerce stores fail for all kinds of reasons. But by focusing on the above strategy, you can put your business in the best position to see success. Set your business apart from the din of competition and offer a radically good experience for customers, and you’ll be well on your way to building a thriving online store.
Check out our write-up on how to increase sales on your E-commerce website.