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February 23, 2011

Ecom strategy checklist

If you're thinking about taking your online business to the next level or want to get your ecommerce strategy going, we've put together a quick checklist of things you might want to consider.

In essence all strategies boil down to achieving two key aims:-

  • Increasing footfall (how to make more people visit my website)
  • Conversion rate optimisation (how can I sell to more of these visitors?)

Your ecommerce strategy is about how you achieve these two main aims.

Budget, Investment and Venture Capital

First things first - where is the money coming from to get things going? Is the figure in your head realistic? Here are the areas where you'll mainly be spending it:-

Human Resource Roles

Regardless of how many people you employ they will need these skill sets to ensure things get done:-

  • Retailer
  • Sales Promotion
  • Conversion Rate Optimiser
  • Web Manager
  • Art Director
  • Copy Writers/Content Providers
  • Picker and Packers
  • Customer Services
  • Business and Sales Analyst
  • PR
  • Marketing
  • Advertising

All of these roles are crucial, so your budget needs to account for employing people with the right skill sets to give your business a real chance. Your budget and financial planning needs to outline how any investment will generate a return and the timeline on which you envisage this happening.

Time

A key resource that's related to your people is time. This is often the commodity that is singularly undervalued and underestimated. You cannot apppoint people with existing jobs into your online business without freeing up sufficient time from their existing role, otherwise very little is going to get done.

In addition, some people think there are quick fixes (a silver bullet solution). Short cuts are not the foundation of a successful business. Making a decent ecommerce website work takes time and making a great ecommerce website takes a lot more! Make sure you realise that even doing the basics well takes time.

When you hear "work smart, not hard"  your BS detector should be hitting level 10. Ecommerce requires continual work and there are always a 101 things you could be doing to improve your website. Prioritising and knowing what works best is vital - but you need to be realistic - you're going to have to work hard to make the business a success.

Systems & Solutions

Ecommerce relies on a core online sales "platform" - the system which links your content management functions with your stock management and retail functions. In addition to the ecommerce platform you'll want a raft of other functions to be handled somehow, whether that be native within the ecommerce platform or through an integration process.  The acquisition of these systems should be determined by your needs. It is easy to spend a large chunk of money on enterprise solutions, but is that what you need? Be realistic; remember there are a lot of free and open source solutions that might fit the bill in the initial phase of your business. Here's a quick breakdown of common  functions required by ecommerce operations:-

  • Stock Control/Management
  • Secure Payment Gateway
  • Content Management System (CMS)
  • Customer Relationship Management (CRM)
  • Sales Promotion/Retail Functions
  • Emailer System
  • Web Analytics
  • Conversion Rate Optimisation (A/B and Multivariate testing)
  • Blog
  • Unified Tracking Solution

Although you want value for money with all your systems and solutions, going cheap can be a false economy as nothing is integrated and your access to insight and joined-up thinking is limited. So your "saving" is actually an opportunity cost for a more efficient and profitable business model that was left unrealised.

Infrastructure - Stock, Storage & Fulfilment

If you sell something you're going to need infrastructure to support the operation. How much stock will you require in your business plan?

  • Buy too little and your website will have nothing to sell and drive potential future customers away
  • Buy too much and your money is tied up in stock you may not be able to sell.

If you can negotiate "sale or return" with your wholesalers/suppliers do so. This minimises risk and exposure.

Likewise there is no point getting carried away with warehousing or storage - keep within your sales projection requirements (with positive and negative sales targets taken into account). Leasing is more flexible, but buying can work out cheaper if you have the capital for investment. The advantage of buying is that the business holds assets, but make sure this is not to the detriment of working capital.

If your business is slightly lower down the scale, then warehousing may be something that can be addressed a few years down the line. Once you've grown sufficiently then you may want to consider taking fulfilment in-house; but until then using the services of a fulfilment company makes sense. They'll take on your warehousing, picking and packing and your distribution.

Marketing

Your budget will also need to take into consideration how you are going to reach users and promote your online business. There are many different online and offline channels you can use to promote your business; each with an associated cost, timeframe and performance.  You need to work out what resources and budget you want to commit to attracting visitors and how sustainable each channel is within your business model. For example:-

  • SEO provides very low cost, highly targeted traffic, but it can take time to establish the right search listings for desired keywords that match your offering.
  • Paid search is immediate, flexible and ROI can be ascertained easily, but unless the cost-per-acquisition (click costs/conversions) works within your product value margins, it is not going to be profitable.

Here are two posts that help explain the landscape:-

Online Marketing Primer

Online Marketing Mix

It is important to know what channels you need to employ and how much each is going to cost. You will need to assess what can, and should be, done in-house and what should be done by an agency/consultant/contractor - and then what it is all going to cost.

Sales Promotion

As well as marketing your sale promotion skill set, it is also important to know how to fund sales promotions - whether that be competition prizes, deals and tie-ins or vouchers and promo codes - this all needs to be funded and budgeted for in advance.

We would suggest you have a detailed sales programme, and if possible tie a promotion into a viral marketing scheme to really kick-start the business.

Planning and Research

As well as working out your costs/liabilities in your budget planning, your profit and loss model will also need to have a fairly good idea about sales projections. This is not something to be glib or remotely causal about. As the old military adage goes "time spent in reconnaissance is never wasted" - well the same goes for market research when planning to grow or build a new business. The more you know, the better prepared for the market reality you will be and an accurate and successful SWOT analysis (strengths, weaknesses, opportunities, threats) can be put together.

Market Research

Your online business strategy should be tempered and guided by your market research.  There are many free and paid-for services and online tools that can help you with market research. We strongly recommend you extensively use free tools such as:-

  • Google, Yahoo, Bing - Search for relevant keywords to discover your competitors and how they present their offering
  • Google Ad Planner - Audience and demographics, identify competitors
  • Google Insights for Search - Competitor analysis, seasonality, relative search volumes. We wrote a post on using Google Insights for Search for competitor analysis here.
  • Google Keyword Tool - Top performing keywords, level of competition
  • Yahoo Site Explorer - Check backlinks to competitor websites
  • Alexa - Relative traffic volumes, keywords
  • Social Mention - What's out there about you/your competitors, sentiment, keywords, sources, top users

While this list is by no means comprehensive, they are free tools and will allow you to get a decent feel for the market and where things currently stand. For more detailed and comprehensive info you may want to commission an ad hoc report from the likes of Hitwise for click-stream related data or an online market research specialist if surveys and offline sampling are required.

Competitor Analysis

Your ecommerce business strategy must take heed of your competitors:-

  • how they position themselves and their offering
  • what sort of keyword visibility they have in paid and natural search
  • how effectively they're using social media and offsite promotion to drive their business
  • what deals, offers, promotions and incentives they use
  • what features and functionality their website provides.

All of these things should lead you to shape your own strategy in a certain way, but if you do not know intimately what they're up to, you have less chance of differentiating yourself which is going to be key to your success.

Brand Identity - Positioning and Audience

In order to differentiate, first you'll need to know who you are!

This sounds a bit vague; but it has a real impact on everything you do, whether that be what the website design must look like or media planning and buying for display advertising. Without a recognisable brand DNA it is difficult to be effective at the many components that will make up your entire online strategy.

So you must nail down your brand identity, your position in the market and your audience before any of the nuts and bolts work can begin.

Differentiation / USPs

You've got to stand out and be different or offer something unique - preferably both! Think about where you currently shop online; what makes you shop at certain ecommerce stores?

  • trust
  • offering (products, price, offers and deals)
  • functionality (search, filters/sorting, mash-up data)
  • content (user reviews, guides, information resources)
  • usability (convenience, clarity)

Whatever the factors are, you'll need to ensure that you cover the same sort of factors with your own ecommerce store if you want to attract, engage and retain customers. But you also need to apply your own DNA to these elements.

Clones and generic approaches mean that your website will be indistinct from the herd. Injecting a real sense of brand identity and some kind of unique offering will go a long way to make your business stand out.

Operational Stuff

You will need to tie all the operational elements that make up the business together from the start. No start-up or new business is going to get everything right on day one. Make sure your team is prepared to be flexible and make changes as they go to ensure things go smoothly. Communication and a "can do" attitude are going to be vital in the early stages prior to your team developing the processes and systemic solutions that make the business work.

No matter how well you plan, at some stage something will go wrong. Your staff need to be trained to put customer needs and great service near the top of the agenda. Take responsibility, fix problems and get things done.

Pay a great deal of attention to this area; early blunders and hiccups can cost you dearly. It only takes a few vocal dissatisfied customers in social media to start your business off on the wrong foot.

Remember there are plenty of review websites out there (www.bazaarvoice.com drives Google's Product Reviews Program). Poor review of customer service, delivery/shipping problems, stock issues etc are going to be online for a long time if dissatisfied customers decide to vent their anger online.

Try your hardest to ensure sentiment is generally very good, therefore people are more likely to recommend your online shop to their friends and family or through social media - key drivers to business growth.

KPIs

You're going to need to know what's going on - your strategy should have objectives to achieve its' aims and those objectives should have measurable metrics that indicate if they're being achieved (key performance indicators or KPIs).

We strongly recommend you set out what you believe to be a measure of success and judge your actions and decision via these KPIs. This will often give you the most objective view of how your business is progressing.

Web Analytics

Many KPIs can be assessed using click-stream data and sales data with web analytics packages such as Google Analytics (free), Yahoo! Web Analytics (free), Omniture, Coremetric and Web Trends. Whatever analytics provider you decide to use it is important to understand how much you can get out of these systems.

It's often worth talking through measuring KPIs with an analytics expert/consultant to ensure you set up your ecommerce shop from day one to measure all the things you'll need to know.

It's not just about capturing the data - it's also about knowing what things mean and how to use the data. The aim is to achieve actionable insights that allow you to optimise and makes things better.

Content is King

"Good enough" content is not good enough!

The instinct to save money by doing the bare minimum with content to get by is a false economy and one that distinguishes poor websites from good ones that make the effort.

Some businesses perceive content to be both time consuming and expensive. However, this outlook fundamentally fails to grasp:-

  • Content drives traffic to a website
  • Content engages users
  • Content makes people come back

It does not matter how well intentioned your business aims - if your ecommerce strategy does not contain "content" as one of its pillars, it is likely to fail.

Product copy - this needs to be informative and engaging. Cutting and pasting manufacturers' blurbs will move your website into a generic space and leave search engines struggling for a reason to list you higher in their algorithms.

Blog/articles/guides/resources - these all provide entry points into the website and improve your chances of people linking to your website (crucial for an organic search strategy).

Photography - cheap looking photography will hamper conversions and trust. Your brand identity will be dependent on how you tackle your product images, category images and internal promotion images.

Customer Acquisition and Retention

Lastly your strategy needs to address how you plan on acquiring and retaining customers. Whilst we talked about marketing and sales promotion above, in terms of costs and budget considerations, here we want to briefly outline some of the questions you need to ask:-

  1. Where is my current audience?
  2. Why should they come to my online shop?
  3. How can I get them to visit my online shop?
  4. How can I present what I have in the best light?
  5. How can I convince them to buy from me?
  6. How can I get them to come back and buy again?

By addressing these issues your strategy will be geared towards the two main aims mentioned at the start - increasing footfall and conversion rate.

Conclusion

Planning and thinking for any strategy is really important. Don't execute your strategy until you know the answers to many of the questions posed above. Rushing into an ecommerce operation without thinking things through is a recipe for disaster.

If you've looked at the market and the audience, your capital and costs and all the other considerations mentioned above, then you are going to have a much more realistic set of objectives/KPIs. Your investors/bank/board are going to be a lot easier on you and your ecommerce business is much more likely to behave as planned.

Good luck and remember there is a huge body of help and information already on the internet - someone has almost always been there first and left some sage advice on how to navigate your way through the issue.

Author: Dom Ebel, Online Marketing Manager

Tags

  • Commercialism
  • conversion rates
  • digital communications
  • digital strategies
  • Ecommerce
  • online marketing stategies

Comments:

anna
this post is very helpful!

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