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Etail vs efail: How to build a successful ecommerce strategy

29th May 2014
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The internet has democratised retail and commercial barriers continue to tumble as it becomes increasingly quick and easy to set-up, launch, replatform and update online stores. But the speed of change in ecommerce also presents its own challenges, and the temptation is to adopt a tactical approach to online in order to adapt to the ever shifting landscape. However, the importance of a robust ecommerce strategy should not be under-estimated.

“A more tactical approach to ecommerce may seem ‘cutting edge’ but in actual fact may mean that firms are simply making changes to their ecommerce approach because that is what their competitors are doing or because new technology or designs are trending,” warns Kath Dawson, creative director at Strategy Digital.

“Businesses looking to make a success of their ecommerce efforts should ensure a robust ecommerce strategy is central to all activity. Without a strategy which clarifies and defines the end goal or mission and the objectives which define the steps that will be completed in order to achieve that mission, a lack of direction and purpose will soon become apparent. The ecommerce industry moves so quickly, failure to adhere to or even implement an adequate strategy is tantamount to taking your eye off the ball.”

So where do start when building a robust ecommerce strategy?

Prior to any strategy being drawn up, it is wise to conduct a situational analysis to assess your business’s internal and external environment, including economic, social and technological factors. This situational analysis can be broken down into four key analysis exercises:

Customer insight study - Understand what your customer wants and find out how to fulfil their needs, this is the key to achieving long-term success. “Gather as much data about your customers through several different research channels,” advises Simon Horton, founder of ShopIntegrator. “Utilise website visitor analytics, customer feedback from surveys and reviews, customer registration data and social media interactions. This information allows you to segment your customers to identify your key target markets. When you know your typical customers, you can personalise customer interaction with relevant targeted communication which in turn will help increase your conversion rate.”

Competitor analysis - Monitoring your competitors’ activities allows you to identify opportunities you may have missed and assess if their actions represent a threat to the future strategies you are planning.

SWOT (strengths, weaknesses, opportunities, threats) analysis - Identify the strengths and weaknesses which exist internally within your organisation and determine the external opportunities and threats that will have the biggest impact on your business. “Essentially a SWOT analysis is about developing a strategy around your strengths that capitalise on the opportunities you've identified, whilst managing the threats and weakness that could disrupt you achieving your goals,” notes Horton.

PESTEL (political, economic, social, technological, environmental and legal) analysis - Its purpose is to examine in greater detail the external factors that could impact your business. Horton adds: “After listing all the external factors, you can prioritise each issue as high, medium or low impact and assess if each one is an opportunity or threat that needs to be dealt with.”

“The most important part of any ecommerce strategy is preparation and research,” emphasises Jeremy Vernon, joint managing director at Core Fulfilment. “Time spent researching competitors and comparators; the current state of your industry and your audience is well worth it to build up accurate picture of the current situation in your industry for your business.”

Once this analysis has been completed can the formulation of the ecommerce strategy begin.

According to Paul Burns, joint managing director at Core Fulfilment, a good plan should include:

  • Where we are now.
  • The current state of the industry and where your business fits into that.
  • Competitors and comparators analysis.
  • Who is your customer and what do they want from their ecommerce experience? How do you differentiate from other retailers?
  • Objectives.
  • Strategy outline: what is the strategy and how will it be achieved.
  • Timescales.
  • Measurement and evaluation.
  • How often will this be reviewed.

It is also vital to set milestones to measure success and ensure that your strategy is on track.

Defining SMART objectives upfront ensures the etailer has clearly set out how to track their progression towards an objective and what constitutes meeting that objective. SMART objectives are:

  • Specific – objectives should be detailed, and specific to a particular area, not vague, as this makes them impossible to measure.
  • Measurable – the objective should be quantifiable.
  • Achievable – is the objective likely to be achieved or have you overestimated targets?
  • Realistic – do you have the resources, time, budget to make the objective happen?
  • Timely – you need to have a specific target time frame to work to.

Horton says: “As an example, if you've identified that your conversion rate from your email marketing database is high but your prospects’ database is too small then you would want to set a goal to grow the number of email prospects. Defining this as a SMART objective could be as follows - 'Over the next s months, by x date grow the customer email marketing database contact list by 25%.'

“A SMART objective defines 'where you want to be' but needs to combined with a clear approach that sets out 'how am I going to get there'. You need to come up with a strategy that is going to achieve your objectives and work out a set of specific tasks you will undertake to implement your strategy.”

Factoring in the following three key elements will also help you to develop a robust strategy:

  • Your brand's position and online value proposition (OVP). Identify where your business sits in the marketplace amongst the competitors. “Determine what you offer that differs from that of your competition and identify how you might use these differences to your advantage,” recommends Horton.
  • Customer segmentation and target marketing strategy. Analyse your existing customers to segment them into distinct customer groups with distinguishable wants and needs. “Once you understand the principal needs of each group you may then set about defining a marketing strategy that targets each customer group with relevant material,” Horton advises.
  • Content strategy. Segmenting your existing customers helps you understand the type of visitor who is most likely to be interested in your business. Plan a content marketing strategy based on typical customer demographics you want to attract. “A combined strategy of on-site search engine optimisation (SEO), in-bound content marketing and off site content marketing can all focus on producing marketing content of interest to the key demographics you want to visit your website,” adds Horton.

Dawson adds: “In this 24 hour economy, in which consumers expect a seamless, high quality experience throughout every aspect of ecommerce, the strategy must be all encompassing, incorporating everything from the aesthetics, functionality and content of the site, to marketing, supply chain and customer service. The specific content will of course vary dependent on the firm’s sector and target markets.

“An ecommerce strategy should define the target audiences/customers and how they will be reached; marketing, social media and content strategies and tactics, sales targets and details of any plans to diversify into new product or target markets. Strategies which define how each objective will be achieved are crucial, as is splitting breaking down these strategies into tactics and actions assigned to individuals with set deadlines and specific responsibilities.”

The best way of ensuring you develop a comprehensive and robust strategy that not only identifies objectives but also precisely how you’re going to get there, is by using tried and tested planning frameworks.

Having already squared off the situation analysis and objectives, Horton recommends following the remainder of the SOSTAC planning model to conclude the development of an actionable ecommerce strategy. A popular model that has been around since the 1990s, SOSTAC incorporates:

  • Situation analysis - where are we now?  Understanding where your business is currently positioned in the market place and how you compare to competitors is an important starting point in identifying opportunities which may exist.
  • Objectives – where do we want to be? Defining SMART objectives allows you to define a clear business strategy to achieve your goals.
  • Strategy – how do we get there? Knowing where you want to be places you at the start of a journey. A business strategy is then required to define how you'll proceed on this journey and what you'll need to achieve to meet your objectives and reach the end.
  • Tactics - exactly how do we get there? Consider the seven Ps of marketing; Product, Promotion, Price, Place, People, Process and Physical, as these will help you write a tangible plan on how to achieve your objectives.

- Ensure your organisation has the right people in place and effective processes to undertake what you're setting out to achieve.

- Establish that you're selling products people want and at a fair price that is a reflection of the quality of the product and service you provide.

- Promote what you have to offer through marketing channels that reach your target audience that are in the right place to act upon your marketing. 

- Give customers the physical evidence they need to understand the benefits of what you're selling as well as reinforcing your company values which boost the customer's confidence in using your business.

  • Actions – What is our plan? Create a project plan assigning tasks for each person to work on. Set target dates of when each person is expected to produce their deliverables. Be clear on any specific approach you want to take when producing those deliverables and what budget is available to implement each task.
  • Control – measuring success?  Decide upfront how you will track the progress and performance of each deliverable on the plan of action. Identify the tools you'll use and the data you'll need to analyse the outcome of achieving your goals compared to where you were before you started.

“Whilst the strategy must be central to all ecommerce activity, it should not be rigid, rather subject to revisions if or when necessary,” advises Dawson. “Implementing regular checks to ensure the strategy is on course, along with quarterly reviews which examine its progress in more depth, are essential. If things are not working as planned, the tactics, strategy or even objective can be tweaked to help ensure they do, before everything veers too far off course.”

Also an important consideration is how ecommerce will integrate with your other retail channels. In a multichannel world, with a channel-agnostic consumer, it is important that all your touchpoints are aligned, meaning ecommerce mustn’t operate in a silo.

“Arguably, your main priority should be developing a robust, integrated digital commerce strategy – not just an ecommerce strategy,” suggests Max Childs, marketing director at Amplience. “Analysts at Gartner predicted that businesses would be receiving half of their web sales via mobile platforms by 2015 and in fact, speaking to our customers, it’s evident that many of them have passed this stage already. Some brands even start by designing for mobile, then expanding real estate and content for tablet and desktop browsers. Either way, the growth of mobile dictates that at the very least you must have an effective mobile site if you don’t want to be left behind in the multi-screen digital environment.”

With all of this taken onboard, you have the perfect opportunity to develop a powerful strategic approach to your operations – something that can keep you at the cutting-edge of ecommerce, no matter the changes that lie ahead.

“Eight to ten years ago it was hard to develop and implement a robust strategy as most technology and best practices were still being tried, tested and even invented,” says Phillip Smith, UK Country Manager at Trusted Shops. “Now we know what fundamental basics (logistics, customer service and the supply chain) work, there is no reason why any ecommerce business, big or small, should not introduce an effective strategy.”


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