SINGAPORE, MONDAY 2 JANUARY 2018 – As people devote more time and attention to online pursuits, marketplaces are turning increasingly digital. The Internet is not only where we interact, it is also where consumers clamour for the products and services they want and need. Businesses wishing to thrive in the next wave must follow their customers onto the Internet.
But it’s not just about setting up a webstore, or selling your goods in cyberspace. To be truly successful, brands must be be able to recognise, execute and deliver a complete e-commerce experience.
Let’s start with a look at how an online strategy benefits businesses.
The benefits of going online
By now, you should be personally familiar with the Internet and what it can do. You can extrapolate your own experience to understand how the Internet can affect and benefit your business.
The foremost advantage of going online is the removal of geographical barriers. A grocer’s market that used to be limited to its neighbourhood now has the opportunity to sell to the entire nation, and maybe even beyond. This is powerful, especially for boutique outfits and smaller players – it effectively equalises business opportunities, giving everyone a seat at the table, without necessarily having the deep pockets to put a physical presence on every street corner.
Yes, going online also requires new skills and tools, and even marketing is done differently on the Internet. However, businesses who get their online marketing strategies right find that they can do much more with much less. Just think about how much it cost to create and air a TV commercial. With the online tools and channels available today, brands can create their own commercials, upload them, and enjoy wider reach on a much smaller budget.
And if you’re still not convinced, a study commissioned by PayPal found that online operations had a significant benefit on the bottom line of businesses. Check out the following encouraging statistics among SMEs in the US:
- 64% said the Internet had increased their revenue
- 48% felt the Internet helped expand their geographical reach, allowing them to expand their customer base
- 73% of companies surveyed saw a reduction in their administrative costs, which translated into savings
Engagement: the secret of successful e-commerce
Now that you understand how a business can benefit from an online strategy, you’d expect virtually every single vendor to already be involved in e-commerce, selling their products and services online, and raking in wads of Internet cash. And you’d be right, but only partially.
You see, is it estimated there are 12 – 24 million onlines stores on the Web. However, only a meager 650,000 manage to generate annual sales of over $1,000.
Why aren’t more online stores more successful?
Well, there’s a secret to unlocking the full potential of going online, and that is what entrepreneurs should be focussed on. More than making a sale, the primary function of e-commerce should be to create engagement.
The importance of engagement
Why is engagement so critical? Well, simply because engagement turns shoppers into buyers.
Let’s take an example from the pet supplies industry. Brands dealing in pet food and accessories do not sell to their primary users – which are the pet animals themselves. Instead, they really have to market to pet owners.
Notice how pet supplies are packaged and designed to look like children’s supplies – bright colours, cheerful fonts, appealing flavours, prominent photos of bright-eyed and happy pets frolicking in idealised settings, etc.
These are all designed to appeal to pet owners, who increasingly regard their animal companions as family members and even young children! Suppliers of pet brands know to engage pet owners by appealing to their sense of “parenthood”.
In much the same way, brands that engage their audience see better results. And the good news is, brands can engage their audiences online in ways they couldn’t really do offline. Recall Red Bull’s wildly successful YouTube videos featuring skydiver Felix Baumgartner that sealed the brand’s place as the undisputed leader in the energy drinks market.
However, brands don’t always need to go to dramatic heights to engage their audience. For example, Starbucks regularly posts photos of their drinkware and other lifestyle merchandise on their Facebook page, which are widely shared and commented upon. This extends the coffee chain’s reach well beyond its physical stores, and right into their customers’ consciousness.
Engage first, and sales will follow
When building your online strategy, bear in mind that e-commerce should encourage engagement first. When there is adequate engagement, sales will follow.
In online retail, everything about your product – from design to delivery – has the potential to be a powerful touchpoint between you and your consumers. Good e-commerce recognises this, and should foster engagement at every touchpoint.
When designing your e-commerce solution, look out for online tools, services and solutions that create access to key touchpoints along your customer’s journey, and empowers you with the means to manage them.
At the very least, you should be able to easily and quickly manage all your social media accounts, perhaps with the help of chatbots to assist customers with frequently asked questions.
Your e-commerce system should also provide you with visibility of your business, so you can head off any potential problems, or move to meet spikes in demand. For bonus marks, such info should be easily and quickly available, and come in the form of easily digestible, at-a-glance readouts.
Another important touchpoint that many businesses fail to take into consideration is delivery, also known as last-mile fulfilment. Never underestimate the negative impact of a missed of failed delivery – one incident is all it takes to wipe away any goodwill you have fought so hard to built up till then. Here, technology can work wonders. Look for smart delivery algorithms that allow delivery adjustments on the fly, and tracking systems that realise a real-time feedback loop.
An engaged customer is a happy (and returning) customer
Any business (yours included) needs to watch their cost of customer acquisition, which must be brought under control if the brand is to survive, much less thrive. The ideal scenario is to spend minimally on new customer acquisition, with returning customers providing the bulk of the revenue.
Because a happy customer is much more likely to return, and engagement keeps customers happy, wouldn’t it be worth your while to build engagement into everything you do?