It might feel like there are a million things to do when you first start an ecommerce shop, and there are. A website must be launched, a supply chain must be established, a brand must be developed, and so on. eCommerce strategy.
These preliminary stages, however, aren't just a to-do list to get you ready for launch. Your ecommerce strategy's core building components are these. The most successful online shops use their initial launch to establish an ecommerce strategy, which they then improve on over time.
A strong plan, on the other hand, does more than prepare you for a successful launch. It helps you achieve long-term success by focusing your efforts. On a given day, everyone (and their team) has a limited amount of time. A good plan can help you prioritize what has to be done and, more crucially, what doesn't.
What is an ecommerce strategy?
An ecommerce strategy is a set of decisions regarding how your company will run that are all linked together. A good strategy addresses the products, customers, and company's whole lifecycles.
Here are some of the most important strategic considerations to make while developing your ecommerce strategy:
To create a product strategy, you must first decide:
Research & development. What methods do you use to create your present and possible future products? Do you develop them yourself or use a third party, and how often do you do so?
Product positioning. How will your product(s) fit into the market and, ideally, meet a need that isn't being met by present offerings? This helps to inform the product descriptions on your product page. When designing this, a 2×2 matrix might be useful.
Product supply chain. How does your product get to your target market? What production and delivery partners do you choose? These factors have an impact on the quality of your goods, delivery timeframes, and profit margin.
Product line depth & breadth. How many goods would you like to carry initially and in the future? Will your product be available in a variety of colors or flavors? Will your subsequent products be a new product line (for example, offering a t-shirt to go with your jeans) or an extension (for example, introducing more lightweight jeans to go with your present range of jeans)?
Product lifetime. Will your products remain perennial, or will you provide limited-edition or seasonal items?
A solid ecommerce strategy considers the customer's whole lifecycle and provides solutions to many of the decisions made along the way:
Target audience. What is the demographic of your target market? A buyer persona document is a standard technique to collect information about your target market.
Branding. What values does your brand stand for, and how will buyers recognize them? What do you want your consumers to think about you?
Customer acquisition. What are your plans for reaching out to your target audience and how will you do so? From social media to email marketing, this could be anything.
Customer experience. What are your expectations for customer service? Will you, for example, pay shipping and/or return expenses and give a guarantee? Will there be a subscription option?
Customer retention. Do you want your current clients to reorder once a month, once a year, or never? How would you assure that they do so again?
Many ecommerce website owners go into the industry because they care about their customers or their products. As a result, company strategy is sometimes a last-minute consideration. A good corporate strategy, on the other hand, maybe a tremendous facilitator for your company.
The following are some of the decisions to think about while developing a company strategy:
Number of shareholders. Who do you want to be the owner of the company? It might be appealing to own 100% of your company since you get to make all of the choices. However, for other people, this might mean missing out on significant business partners or investors who, in addition to providing capital, are typically well-connected, knowledgeable, and willing to help. At the same time, shareholders and investors want to be paid for their time and money, so if you take on shareholders or investors, you'll need a strategy in place to ensure that they receive their money back.
HR strategy. Even if beginning an online business is now easier than ever, it still necessitates some capital. Where are you going to acquire the money? Loans, investments, savings, pre-sales to clients, and crowdsourcing are all options. Businesses that are already up and running, on the other hand, require a finance plan as well. They may need to place large purchases of products or meet seasonal demand, which necessitates a strategy for having adequate cash on hand at the proper times.
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How to create an effective ecommerce strategy
At first, all of the aforementioned questions may appear to be overwhelming. They are, nevertheless, a foundation for determining if your approach is complete. Once you start preparing your approach, you'll notice that they're all interconnected and that by making one decision, some of the others will start to fall into place as well.
Consider breaking up the construction of your ecommerce strategy into four phases to help structure this strategic decision-making process:
1- Decide on your personal goals and values:
Your ecommerce strategy is built on your unique goals and ideals. This isn't a witty remark; it's a business fact. Your values will guide everything you do, from who you do business with to how you manage your product line, based on your aims.
Here's an example of how objectives and values influence your pricing and branding strategy:
- You place a premium on natural components and make it a point to use them exclusively in your goods.
- Natural ingredients must be sourced from providers who do not use chemicals.
- Because such suppliers demand a premium, you'll need to price your items higher than the market average to keep your gross profit margin intact.
- You'll need to invest more heavily in brand building and customer experience to justify the higher price point and maintain a high conversion rate.
- Because the natural components cause your goods to decay faster, you'll also need to spend on post-purchase consumer education and experience.
Running a business that is in line with the owner's aims or ideals might be difficult, but it is essential for keeping motivated and proud of what you're doing. Try identifying your anti-goals and values if you don't know where to begin when naming your objectives and values. What are you opposed to? What type of life or financial circumstance would you like to stay away from?
2- Get to know your potential customers:
Establishing product-market fit should be one of the first priorities of every new ecommerce company. This is when you have a product that your target clients (your addressable market) are not just interested in, but are ecstatic to have the chance to buy.
The best method to achieve product-market fit is to do extensive research and have a thorough understanding of your target audience's demands. It's entirely up to you how you choose which consumer to serve. It may be as broad as “women between the ages of 45 and 60” or as particular as “CrossFit fans in southern Ontario“. Ask yourself, “What group of people do I know who have a need for the sort of product I have in mind?” to discover your ideal target market.
Understanding your consumer may assist guide your brand positioning, marketing channels, and customer service standard, in addition to product-market fit. If you're not sure where to begin when it comes to knowing your target consumers, identify 5–10 of them and ask them questions about your concept and their requirements. If their responses astound you, reach out to other potential consumers! Given how crucial potential consumers' feedback is in the early stages of your ecommerce strategy, it's practically impossible to spend too much time chatting with them.
3- Create your long-term vision:
You'll be ready to think about the long-term once you've done consumer research to confirm your first product, branding, and marketing channels. A vision completes a fantastic approach.
Although “vision” may appear to be something only the Steve Jobs of the world can generate, it is a rather straightforward activity. Simply ask yourself a couple of different variations of this question: What will our future look like if we are successful?
Add a time frame and make it precise to make it more practical:
- What does our brand feel like in 5 years if we succeed?
- What does our product line look like in 5 years if we succeed?
- Who are our key partners (supply chain, resellers, collaborators) in 5 years if we succeed?
This is similar to goal-setting, but the objective is distinct. Setting goals allows you to identify a sequence of precise activities that will help you achieve your vision. Setting a vision allows for ambiguity: you don't have to specify how you'll get there in five years, simply how it looks and feels.
4- Ruthlessly prioritize:
After completing the activities above, you should have lots of ideas for each aspect of your business. Prioritizing is the final phase. Determine the single most critical item to do in each of your business's areas (product, customer, and corporate). If you're not sure how to find them, consider this question: What is the largest impediment to your business developing financially, and how can you overcome it?
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Saying no to good ideas to make room for outstanding ones is an important part of a successful ecommerce strategy. You may set your shop up for long-term success by recognizing and assessing all of the levers accessible to you for your business, but concentrating on the most important ones.