Strategies for a Successful eCommerce Site Part 1: Define your Market
So you’re thinking about taking some business on-line. I wish you all the success, but your dreams and my emotional support aren’t all it takes to launch a successful eCommerce initiative. The pioneering days of being the lone eCommerce store at the top of the hill are gone replaced with the thick, oppressive sprawl of a virtual big box outlets, mega-malls, shady back-alley stands, Starbucks-on-every-corner landscape. It takes careful planning and diligent execution to grab your first piece of that ePie. Let me take you through some of the key strategic elements in building an eCommerce strategy; it’s probably more useful to you than good intentions.
We’ll take a look at five strategic areas that have a large impact on eCommerce success:
- Part 1: Define Your Market
- Part 2: Choose Your Platform
- Part 3: Add Content, Content, Content
- Part 4: Select Your Payment Method
- Part 5: High Performance Tweaks
Throughout this series, I’ll use the term product to mean whatever you are going to peddle. It can be a tangible good, a package, a service, or any other construct.
Part 1: Define Your Market
Slick design, smart keyword analysis, and crafty product descriptions are usually what you start thinking about when taking that first step onto the Web. It’s all about technology, right? Well, yes, but don’t abandon what you may or may not know about marketing. The Web is about reach, but the secret is to connect with customers. Shopping cart software controls the presentation but it doesn’t do the marketing for you. The first thing you need to do before you worry about rounded corners, alpha blending, and ajax controls is define your target market.
Ultimately you want to define:
- Target Customers – who is going to buy the product?
- Product Positioning – why will they buy the product?
Defining Your Customers
OK, so who is going to buy your product? This is a very difficult question to answer, but an extremely important one. Maybe the most important one. The goal here is to determine the most attractive market segment for your product. Simply put, find the type of Internet shopper who you think will buy your product. This can be based on:
- Age
- Gender
- Income Level
- Occupation
- Education
- Lifestyle
- Behaviours
Keep in mind during this exercise that most successful entrepreneurial ventures target narrowly defined market segments. Casting a wide net can seem like a good idea, but often burns resources faster than the intiative can earn market share. That’s like selling at a loss and trying to make up for it in volume.
Just a quick word about pricing. Price is king. You can spend all the time and money getting everything else right about your eCommerce venture and then get killed on price. Do your due dilligence and know what your competition is offering. If you price too high, your competition may keep you from ever gaining traction in the market. If you price too low, you are leaving money on the table. If your competition has already driven the price down, you may not be able to charge enough for your product to make your business case.
So find your niche. Figure out who the first hundred people are that going to be your customers. And by all means, don’t be afraid to modify your product to fit the specific needs of the market. Think of it this way, Nike changed the world when they realized that they could sell a customized running shoe specifically to distance runners. It’s all about innovative segmentation.
PositioningYour Product
So you now know who your customers will be. Good work, but you now have to worry about differentiation. Yeah, but I found a neglected customer group and have the perfect product! Sure you do, but you need to tell them why they should buy your product and not your competitors. This is called differentiation and it is the reason why people buy. Michael Porter in his famous Harvard Business Review article ”What is Strategy” points out that: “A company can outperform its rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at a lower cost, or both.”
The differentiator can be both physical and perceived. Physical differentiators can include features, ingredients, materials, and style. Perceived differentiators can include benefits, quality, usage, and pedigree. Once you understand what makes your product more attractive to your target customers, you will want to create a positioning statement on which you’ll hang the rest of your eCommerce strategy.
The positionsing statement should define the benefits the customer will obtain, rather than just defining features of your product. You want to find something in your differentiators that speaks the most to your target customers. And I mean something. As in one – two max. This thing is going to sit in your customers mind relative to their needs and the competition. In otherwords, you want your thing to rank higher with your target customers than your competitor’s thing.
Right, and an anectode: There’s this little blue pill. As heart medication it is just another heart medication in a fairly saturated market. In a more recreational application the same product earned more than $400 Million in sales in the first quarter after launch. Proper positioning can equate to a fatter wallet – don’t treat it lightly!
So What Next – Is Your Product a Good Fit for eCommerce?
Now that you’ve brought some definition to your target market, you’ll want to confirm that your product is still a good fit for eCommerce. Now you may just want an eCommerce presence to help advertise and drive traffic to your physical store. The lessons above are still valuable. If you still want to sell, you should do a quick sniff test to make sure your product and target market.
Make sure your product is in the sweet spot for selling on the Internet. Some basic criteria include:
- Good price range for credit card purchases: $50 – $500
- Easily shipped or downloadable
- Isn’t try before buy or tailored/fitted
Make sure your target customers are in a demographic that isn’t afraid to make on-line purchases.
Make sure your value statement can be communicated over the web in words and pictures.
Make sure your differentiators and value statement set you apart from existing providers. Don’t try to sell books unless you can do something Amazon can’t.
In the end, the Internet is a great communications tool and your eCommerce strategy may be highly experimental or simply for exposure. If this is the case, don’t be dissuaded, but at least go forward with that expectation.
Conclusion
eCommerce can seem daunting because of the technological considerations, but don’t lose sight of the basiscs of marketing before you get started. The Internet will let you reach to every corner of the globe, but don’t fall into the tempation of trying to do it all at once. Spend the time to clearly define your market by understanding your target customers, crafting your product’s value proposition to those customers and making sure the eCommerce business plan is viable.
Happy selling!
Tags: eCommerce Strategies