Online retail sales are forecast to more than double over the course of the coming years, reaching a projected total of 6.5 trillion U.S. dollars.
6.5 trillion is a big number, and an opportunity worth pursuing if you’re an existing or aspiring online retailer.
Since the early days of e-commerce, online retailing was defined by four pillars: Selection, Price, Experience and Convenience. The cost of entry was relatively minimal - if you had an assortment of products at good prices in a beautiful online store with free shipping, you could compete. But not anymore, those days are gone.
Over the past few years, particularly post-Covid, consumer expectations for online shopping have drastically changed. In 2021, a relevant selection must include personalized products and sustainable brands, and convenience means curbside pick up and Afterpay. While some of these “enhancements” are optional, most are crucial if you want to gain market share.
For most cash-constrained retailers, it is difficult to determine where to invest resources to stay competitive. The most common mistakes are made when retailers chase the market or their direct competitors. My advice: don’t do that.
Instead, start with your target customer and a few leading questions:
What are their priorities? Values?
What are their shopping habits?
What do they expect when shopping in your store?
Identify your direct and indirect competitors. Through the lens of a customer, evaluate their selection, pricing model, experience and conveniences. Do this often.
Use available data and relevant KPI’s to analyze your business and assess progress. Test repeatedly. Fund the things that work, and kill quickly those that don’t work.
The market is moving quickly, and increased expectations have led customers to switch brands. To mitigate your risk, you must aim to meet and exceed your customers needs.
Here the four pillars, and what I deem are non-negotiables if you want to compete and lead. Additionally, I have included some optional elements to leverage as you evolve your channel.
Remember to use your target customer as the filter for decsions.
“Customers spend 48% more when their shopping experience and product selection is personalized.”
2- PRICE / INCENTIVES
“84% of consumers say they’re more apt to stick with a brand that offers a loyalty program. And 66% of customers say the ability to earn rewards actually changes their spending behavior.”
“Video marketing isn’t an emerging trend anymore — it’s here.
Today, videos are a vital component of every ecommerce brand’s marketing strategy. And for good reason.”
“Animoto found that as many as 73% of customers are more inclined to purchase a product after watching an explainer video about it.”
THE AMAZON EFFECT:
“Not only will customers abandon a cart if the shipping costs are too high, they’ll also abandon a cart if the shipping takes too long. Even if the cost is free, shipping that takes longer than customers are willing to wait can be a deal breaker.”
SHIPPING / DELIVERY
Your Next Step:
Once you’ve checked the boxes, create a set of clear priorities and action items that are filtered through YOUR target customer. Identify the resources needed: capital, human, and technical. Develop a near term and long term road map, and adjust it often.
If we know anything, we know that nothing is certain. Be nimble and prudent.
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