Analyze your sector of activity and the capabilities of your business to establish a strategy for your online activities
The immediate impact of COVID-19 was rapid and trying: companies had to adapt to new ways of doing business.
Most factories and stores have been closed, and office workers are trying to work from home. Essential service companies are putting in place new operating procedures to make the workplace safer, and consumers have put e-commerce websites to the test by exploding online orders.
Many believe that these new behaviors will persist after the COVID-19pandemic , which will lead to the creation of a new normal. Online shopping and the provision of distance services, in particular, are behaviors that could persist after the current crisis is over.
Companies planning now and adapting to this new reality in the business world will stand out at the time of recovery.
However, it is not enough to establish an online presence. Our experience has shown that companies that take the time to plan their business online are much more likely to be successful.
This blog aims to provide you with a framework for analyzing your current context and your organizational capacities that will allow you to develop your strategy for your online activities.
Observe your competitors to better understand them
The first step in developing an online business strategy is to understand how online sales currently work in your industry.
A good starting point is to observe and understand the actions of market leaders and your direct competitors in order to understand best practices and the positioning of competitors.
For example, if you are a sports shoe retailer, you will visit altitude-sports.com, decathlon.ca, footlocker.ca and others. You will wonder:
- How do these companies stand out?
- Who are their target customers?
- What are their online promotions?
- What are the main features of their website?
- What can you learn from these companies?
- How can you stand out?
Analyze your customers
The next step is to understand your customers:
- How old are they? What are their interests and preferences?
- Why do they buy online?
- What attributes are they looking for in a website?
You already have customer data that you have collected from activities on your website and offline; this is a good starting point.
For example, a spa or retailer of exclusive beauty products may find that women aged 25 to 34 tend to buy online and those aged 45 to 54 prefer to buy in stores.
This information will then allow the business to improve its website and online marketing to increase sales.
Measure the impact on your business partners
As your business relationships with various partners may be affected by your online sales initiative, you will have to weigh each of these relationships.
How much do you depend on each of your partners? Then, what is the added value that each brings to the relationship? Here are some key questions to incorporate into your analysis.
Take the example of a specialty product manufacturer that distributes its products through a network of independent retail stores in Canada.
The launch of the e-commerce site is likely to threaten the distribution network, which could sense that the site will cause reduced store sales. How can you handle the situation?
- Will you share a percentage of online sales from a certain region with distributors?
- Will you favor store pickup?
When defining your new business relationship, think of the value that your distribution network brings, especially in the form of advice, expertise and inventory management.
Develop your internal capabilities
The next step is to analyze your internal capabilities and determine the changes necessary for the success of online activities.
Transactional website
First, you will need a technical team that can assess the different options for creating and updating your transactional website . Who will build your website? How are you going to update it? When making these decisions, think about the customer experience you want to create on your website and in after-sales service.
Digital marketing
Second, you will need to develop digital marketing capabilities. Even if the basics of marketing remain, it will be essential to put the technology in place to capture and analyze customer data.
Logistics
Third, the success of online sales depends on the reliability and speed of shipping, the ease of returns and the availability of stocks. You will need to acquire capacities and systems or resort to outsourcing for the execution and shipping of orders as well as inventory management.
Change management
To help your team get through the period of change brought about by the implementation of online sales, you will need to maintain communication to ensure that the project is well understood, as well as mobilize employees in the effort to change and support by offering them training on their new or modified role.
Digital mindset
A digital mindset is also of great importance for your online sales initiative. Indeed, the systems and technology for the website, digital marketing and new logistics for your business will force all employees to acquire new digital skills.
Agility and openness
Launching online sales is a huge project that requires adapting to new ways of doing business. To be successful in this transformation, it is essential that you listen to your customers, employees and business partners and that you maintain the agility necessary to make these changes over time.
Build your business case
Once you have done the background work, you will need to make financial projections to establish the profitability of your online sales project and set your financial goals.
We suggest that you establish a budget over a three-year period. We present below a very simple example with fictitious data to give you an idea.
| E-commerce project (in thousands of Canadian dollars) | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Progressive income | 200 | 400 | 800 |
| Initial investment | (100) | ||
| Recurring operating costs | (100) | (100) | (100) |
| Additional costs | (50) | (100) | (150) |
| Cash flow | (50) | 200 | 550 |
To establish sales forecasts, use the percentage of online sales made in your industry. Adjust the percentage according to your business situation. Also, take into account that your sales will increase over time. Finally, get estimates for start-up and operating costs from potential suppliers for website, marketing and logistics.
Create an optimistic sales scenario and a pessimistic sales scenario and determine the level of sales required to break even. Put your team to work for this work.
4 tips to define your objectives and establish your action plan
If your business case is positive and you believe you can make a profit, you can make your plan.
Here are four tips in this regard:
1. Gather your team
Mobilize your entire management team and employees occupying key positions who, in your opinion, can provide a good contribution to your project. Several heads are better than one. Review and share with them all of the previous analysis so that they can fully contribute to the project.
2. Define your goals
Then define the specific objectives of the project with your team:
- What goal do you want to achieve? When do you want it to be reached?
- What is your vision for a successful online launch?
3. Develop an individual action plan
The action plan should be as specific as possible. Responsibilities and deadlines must be established for each element. Prioritize actions so that efforts can focus on a few important deliverables at a time.
4. Communicate and follow up
Finally, call the action plan to all employees and put it updated regularly. Hold follow-up meetings at least once a week to discuss progress.
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