I’ve been working in eCommerce for a while and I thought I’d share the some of the lessons I’ve learned about the fundamentals of eCommerce along the way. As with any blog post I don’t expect to cover everything – this is not an exhaustive list.
The carrying power of a bridge is not the average strength of the pillars, but the strength of the weakest pillar. Zygmunt Bauma
What I’ve found with the eCommerce projects I’ve worked on regardless of the client, vertical, objectives, or strategy – is that successful projects all seem to feature similar key concepts. This is why I call them the pillars of successful eCommerce because you don’t always need all of them but you should aim to have real strength in the ones you have.
If you look at the growth of eCommerce and who the big players are, the online brands that have flourished have been the ones competing on price-point: Amazon, Alibaba, Walmart and eBay for example.
Having the best price is a big deal because unlike physical retail stores, it is no effort for an online customer to go to another store -competitors are literally a click away. At least in the real world there is some resistance for customers leave a store, but it would be naive to think that your online customers don’t already have few other online stores open while they are browsing your website.
Price is important but it is certainly not an essential pillar for success. Factors like getting the product quicker, easier, with a better warranty (see service) can easily trump price. Nicholas Lovell talks about value at length in his book The Curve [22013 Penguin]), saying people will actually pay more for what they want and that retailers need to change the way they think about charging: for the products and their packaging. This brings us to the loyalty pillar. In short, if people can buy the same thing online somewhere else for cheaper – most of the time they probably will.
This one is not too difficult to explain: if you can’t get a product anywhere else, then customers have no choice but to buy it from you. This could be in the form of an exclusive distribution deal, being a brand owner, or buying the entire stock available in a country (a client I worked with actually did that).
Exclusivity for eCommerce extends to:
- Region. e.g. Do you have stock where the customer needs it?
- Price. e.g. Is it cheaper than everywhere else? (sort of links back to price)
- Service. e.g. Perhaps the product is only purchased after an interaction or how is convenient to the customer which is my next point.
Now let’s get a bit more digital now. At Net Prophet 2014 eBay VP of marketing Jody Ford shared a stat:
“In the US 39% of customers paid online and picked up their purchase in-store”
Being able to offer your customers the convenience to fit the pickup of a purchase into their schedule, and have no delivery cost to boot – is a win. People like being in control of the way they engage with brands and products,so doing things customers like will drive more sales. Online-offline integration, or omni-channel, is a big buzzword at the moment and it’s because retailers who are able to offer customers convenience and utility by linking the digital and real world are seeing massive success.
Another thing Jody Ford talked about is people expect better service online than they do on a retail store. We need to make the decision to purchase effortless. Things like having to wait for the delivery of an item, a courier that makes you go to the post office to sign for a parcel, having to find parking, having to leave the office, being stuck in a car waiting for your kids to finish school – the human stuff – makes purchasing a schlep. Include a service element in your eCommerce strategy that will leverage the human factor with service. Things like loss aversion andseducible moments play a role in applying these to the UX.
A benefit (or a drawback) of an eCommerce store is you do not need to limit your stock regionally. Physical stores have the choice to not stock items that won’t fly off the shelf due to location or seasonal factors. Nationwide stores can stock different ranges in different locations. Online shoppers, on the other hand, will find an alternative if an online store is out of stock.
It’s easy for customers understand why their favourite local lunch restaurant is out of something like avo today; but when it comes to e-commerce being out of stock of, say, tennis balls, doesn’t go down well online. Warehousing is an expensive part of the eCommerce business, so one option to get around that is by drop shipping (suppliers can pick, pack and ship directly to consumers): but can only work with reliable suppliers.
I’ve left loyalty for last because it’s a large, specialist field that really deserves its own topic. I’ll dedicate my next blog post to it. For now, I’ve tried to distil my point down as much as I can to avoid rambling on about it forever.
Loyalty is a bit of a trump card as it can override purchase factors like price, exclusivity, convenience, service and stock. Perhaps loyalty is the base for the pillars of good eCommerce.
And That’s That
The 6 pillars of eCommerce seem to pop up again and again – they are important parts of the eCommerce puzzle that leads to success.
The trick is actually to not think of an online store any differently to a bricks and mortar store. These concepts come from retail, not eCommerce. Try to approach your eCommerce store as your flagship store, remember the brand and marketing potential it has, keep the human element in mind and remember your online store is operating 365 days a year, 24 hours a day.
Remember that customers are trying to solve problems; does your strategy offer solutions to help them?
Nick works in strategy, marketing and UX. From England and currently living in Cape Town, South Africa. Learn more about Nick.