There’s no buzzword (buzz phrase) quite as hot as “eCommerce strategy,” now is there? But, as with all buzzwords, the term gets thrown around perhaps a lot more often than it deserves, and often in circles in which its implications are not fully understood.
So, let’s take a step back and define what we’re talking about. There is a right way to go about defining an eCommerce strategy and outlining the steps you will take to execute it, and there are many wrong ways.
This short guide should help sort out some of the fundamentals of what a strategy is, how to establish one, and why it matters in the first place.
What an eCommerce Strategy Is and Why It’s Important to Have One
Simply put, an eCommerce strategy is the encapsulation of the actions a business will take to sell goods and services to members of their target market online, and what steps they will take to accomplish that.
It requires businesses to develop and position their goods and services, establish core value propositions that enable them to compete effectively, and define and actively target a buyer persona (or several target customer personas).
An effective, well-defined, comprehensive eCommerce strategy is not only essential to success, it helps to define activities and ensure a level of efficiency and direction when allocating funds, resources, and efforts.
In addition, a well-defined strategy can:
- Ensure long-term company health and stability
- Provide a foundation for growth for your online store
- Produce operational and cost efficient processes
- Result in more affordable, effective advertising and marketing plans that generate a better user experience, sell products, reduce shopping cart abandonment, and support the customer journey.
- Serve as a foundation for competitive analysis
- And reduce response time to shifts in market conditions
- Among other benefits
These are some of the most salient reasons to invest in an effective, defined eCommerce strategy.
Now let’s talk about how you can go about doing that,
Understand Yourself and Understand Your Market
Before you can identify buyers, before you can allocate a budget, before you can do quite literally anything else, you need to understand, fundamentally, what it is your business produces.
As Sun Tzu said, we must know ourselves as well as our enemies. This means you must understand what your company makes, and what it does not make.
This invariably requires you to produce a core value proposition, as well as one, or several unique value propositions that will enable you to compete effectively.
Is your company a low cost producer of a commodity? Do you sell accredited services that have no equal? Do you produce premium, luxury goods and compete on quality only? Do your services produce time-saving economies of scale? Are your employees more creative than your competitors?
These are the things you need to define. Figure out what you sell, because then you can stop wasting money chasing something you aren’t. No entity can be all things simultaneously to all buyers. You must take and occupy a competitive position.
Once you establish what your business offers, you can then consider what sorts of potential buyers constitute your market. Are they obsessed with the finest quality in your corner of the industry? Do they buy on price alone?
What are their interests? How old are they? Where do they live in the country? What sorts of occupations do they have? What are their pain points? What makes customers feel like buying products like yours?
The goal here is to come up with one ideal buyer persona (or several, this is also possible). This will enable you to craft eCommerce marketing strategies and messaging that target the strategy to these buyers.
The more closely you target, and where possible, personalize, your marketing, the more effective it will be.
Determine Which Digital Marketing Channels You Want to Pursue
The next step in establishing and defining a viable eCommerce strategy is to determine which digital marketing channels it makes sense for you to pursue.
There are many different channels, and each of them will offer your business a unique advantage. In some instances, it makes sense to utilize only one or a specific subset of channels.
One of the main digital marketing channels is search engine optimization, also known as SEO. This is a collection of practices that are taken to improve a website’s optimization with respect to search engine algorithms.
In layman’s terms, a website with good SEO will show up high in the search engine results pages when you search for something.
Search engine optimization is the one digital marketing channel that all eCommerce businesses, regardless of vertical, should be pursuing. There are no restrictions, SEO is a long-term, highly scalable process, and it also offers the highest ROI of all channels.
Then there is pay-per-click, or PPC marketing. This channel enables a business to bid on certain keywords, search terms, or locations/positions in an effort to “pitch” paid ads/listings to a specific audience.
PPC has a lot going for it. You can set a budget easily, automate bidding, and very closely define where, when, and to whom your ads show. It’s also very easy to track performance of a PPC campaign.
There are limits, though. PPC is expensive and results are not scalable. Moreover, PPC usually doesn’t yield the same click-through and ROI as SEO. Worst of all, eCommerce sites in some industries are not allowed to advertise using PPC. anyway, making SEO a better bet.
Still, PPC can be a quick way to generate brand awareness and start generating traffic in the short-term.
There is also social media marketing, which can be either paid or organic. In social media marketing, you can reach new customers, engage more actively with members of your target market, and build credibility and authority. In some instances, you can even sell directly through the platform.
Social media marketing also enables you to share information, address customer concerns, and solicit user-generated content like images, reviews, and videos.
Some of the top social media platforms to utilize for eCommerce marketing purposes include:
- Facebook: Has probably the largest reach of all social media platforms and can be used for content marketing, paid advertising, selling, and much more.
- Instagram: This is a good channel for strategies that would benefit from the use of imagery or videos.
- Pinterest: Similar to Instagram, Pinterest relies heavily on imagery to stimulate engagement.
- LinkedIn: A good platform for advertising long-form, informative content, making it the most viable for B2B models.
- TikTok: A growing social media platform that is appealing to younger users and relies on short videos.
For most businesses, the most effective social media marketing strategy will incorporate efforts on more than one of these platforms.
There is also email marketing, which is highly effective for boosting engagement among members of your target audience that have already bought from you in the past.
Email marketing enables a high degree of personalization, which promotes repeat conversions as well as the extraction of a higher customer lifetime value. Few other digital marketing channels offer the ability to so personalize the experience, making email marketing essential for nearly all business models.
Establish a Budget and Determine Your Goals (Long and Short Term)
After you’ve positioned your products, identified your target market, and determined what digital marketing channels you want to pursue, you can figure out how much you want to spend to get there.
Actually, it makes more sense to establish your long and short-term goals, first. Then you can figure out how much you want to spend (or how much you can spend) to get there.
So, you need to answer questions like this:
- What sorts of sales figures do you want daily, monthly, quarterly, or yearly (and after how long)?
- What sorts of revenue figures do you want in the same period?
- What sort of ROI do you expect?
- How many new customers do you intend to reach and convert each relevant period?
- Do you have goals for average order value, profit margin, cost-per-customer acquisition?
- Do you want to own a certain share of the market after a year, five years, or longer?
- Do you have a set figure for how many customers you want to become repeat/lifelong customers?
These are only a few sorts of different goals you might want to consider and then set. Remember also that you can set goals for the short term (think daily, monthly, and quarterly figures) as well as longer-term goals, such as yearly figures or goals for a five or even ten-year period.
Then you can establish a budget to determine how much you’re comfortable spending to get there. Just be aware of this: the more aggressive you are with spending, the more that will affect ROI, but at the same time, failing to budget appropriately can result in a failure to meet the goals you establish.
Execution: Identify Steps You Need to Take to Get the Ball Rolling
Once you’ve determined what you will sell, whom you’ll sell to, and how you’re going to reach them, you need to figure out just what exactly you need to do to make it all happen.
Too many good ideas wither on the vine for lack of initiative. Here are some questions/considerations you’ll need to make:
- Do you currently have inventory or do you need to find a supplier to fill demand?
- Do you have the in-house capabilities to run marketing campaigns to reach your target audience? If not, hire them or outsource to an agency.
- Is your eCommerce website fast, secure, and otherwise up-to-snuff? Dated websites cost conversion rates; either hire a developer or work with a third-party expert to ensure your website will meet customer expectations and yield an enjoyable shopping experience.
- Are the tracking tools you will use to monitor KPIs and other metrics installed/configured/ready to go?
- How will you collect payment/taxes? Is that feature native on your platform, or will you need to integrate or develop custom functionality?
Once these main items are squared away, you can get started with putting everything into practice. The skeleton of your eCommerce strategy is complete, and you can get started pounding the pavement.
A final word to the wise. Don’t expect everything to be perfect in practice just because it was on paper. You have a strategy set, but adaptation can be the difference between success and failure. It won’t be perfect the first time. Don’t expect it to be. Just make the best of it, learn from your successes and shortcomings, and make changes to the strategy along the way.