Follow this easy method to plan your ecommerce model
The COVID-19 crisis has led to an unprecedented increase in online shopping by Canadian consumers. Virtually all types of merchants have seen their online sales more than double since the start of the crisis, according to Absolunet, an electronic commerce consultancy agency in Montreal.
Entrepreneurs who want to develop their e-commerce must act now. Customers may adopt habits that will last long after the pandemic, whether your business sells to other businesses or directly to consumers, or both, because consumer behavior online is similar in both cases.
The business model framework
There are several things to consider when you are considering offering products and services online.
To do this, our team often uses the framework of the Strategyzer business model .
We'll explain how to use this tool to examine every aspect of your business in the context of e-commerce.
1. Customer segments
For the first component, we will look at customer segmentation. It is important to identify your key customers and segment them according to characteristics like these :
- Value and margin
- Online shopping and buyer behavior
- Products of interest
- Activity area
Then go a little further and understand what makes them unique.
For example, you could create a high-value business segment for business customers with an average order value greater than $ 10,000, and then segment it again by product line. Think of customers in this segment, and ask yourself what shopping and shopping experience they are looking for.
2. Value proposition
Once you understand the trends that distinguish your most valuable customers, you will be better able to develop strategies that meet their needs.
The value proposition refers to the ways in which your business provides added value to each segment. It explains why customers in each segment buy from you and continue to do business with you.
It is important to think about your value proposition for each segment in order to tailor your ecommerce website to the buying habits in each of those segments.
Think about the information required for each segment and make sure it is at the heart of the shopping experience for buyers in that segment. If your high-value segment customers have more of a product advantage, be sureto target those customers in your message. For example, you can structure your product catalog based on the interests of buyers in your key segments.
3. Channels
It is important to know how and where people will buy your products or services.
Most of the time, the main sales channel is a website that attracts users and converts them into customers. To be successful, you will have to design and promote your website in the right way and put in place tools and methods capable of analyzing its effectiveness.
Design of your website
Your website should be uncluttered and targeted, i.e. that it should only offer relevant content and functionality. Also think about the multiple platforms and devices that your customers will use when shopping.
Next, it is important to examine the content of your website. The information you present to clients must be brief, compelling and relevant. For longer content, consider creating a blog. Blogs can greatly increase your visibility in search results pages.
When creating your site, always be sure to analyze how it interacts with search engines such as Google and Bing. Most customers start their online shopping experience from these portals. Your goal is for your website to be among the top results when a user searches for information, a product or a service on the Internet; make it a priority.
Promote your ecommerce site
For most businesses, the main sources of website traffic are paid search and SEO, but email and social media can also be very useful.
If you are considering an email marketing campaign , including newsletters, group your customers by characteristic and send them appropriate emails (by segment).
Also, view the emails coming as a chain of communication. For example, your first email could present your range of products and services. The next one could feature one or two of your products or services and have a call-to-action button, like "Buy Now".
Don't forget your current customers, and treat them differently from potential customers by email.
Another important point: think of the communication channels of your social media platforms, by creating a content calendar . The content must be adapted to the way potential customers use each platform.
Analyze your results
The beauty of online business is that you can see very quickly if it works .
Once your site and social media pages start attracting visitors, it is important to set goals for your online marketing efforts and measure results using analytics tools. ).
You can use what you have learned to improve your web presence.
It's best to start small and focus on small, incremental changes.
Use the data to determine what works and what doesn't, then adjust to improve your results.
4. Customer relations
As you launch and optimize your online business, it will be crucial to define the kind of relationships you want to build with your customers.
- What is loyalty for your business?
- How are you going to show that loyalty matters to you?
A good example is live chat for customer service. Many people expect to be able to do this and use chat to communicate with a business. Consider using chat or contact forms on your website to communicate with customers - perhaps even incorporating social media tools, such as Facebook Messenger.
5. Income stream
Your website will be the basis of your business and will serve as a channel to boost your sales.
As a complement to your website, you could also consider doing business in open markets, such as Amazon, eBay, and even social media markets.
Do you have a traditional store that can still thrive in today's economy? Now is the time to ask yourself what a business and customer experience looks like in an omnichannel environment .
6. Main resources
If you are new to e-commerce, your priority should be web exploitation.
Depending on the importance of e-commerce in your activities, you may choose to work with partners (see point 8) rather than relying on your internal resources.
You should at least ask yourself if you have employees capable of performing the following functions:
- Fulfillment of orders
- Customer service
- Digital marketing
- Operation of the e-commerce platform and the website itself , and resources required to operate the platform
- All e-commerce activities, including all new processes and systems required
7. Main activities
Several new functions of your online business will inevitably be unknown to you.
It is therefore essential for you to understand and define the functions and processes of your new e-commerce business.
Here are some of the main things to consider:
- Inventory and warehouse management (depending on scope)
- Customer service
- Online Marketing (including content and product marketing)
- Fulfillment of orders
- Systems administration and integration
- Analytics (it is important to learn data and use it for continuous improvement)
8. Main partners
Of course, your web platform and all of the technologies that make up your infrastructure are the foundation of your new e-commerce business. Be careful, don't forget to ask yourself how your current suppliers and partners could change their way of doing things.
For example, with online sales, you may have new demand planning and warehousing needs, or different requirements. Shipping a few items is not like preparing to load a truck.
Consider joining forces with the following partners:
- A web platform provider
- What technology are you going to invest in?
- Who will be your supplier or partner?
- Can it grow at the same speed as you?
- Shipping Partner - To fulfill your orders, you will need to be able to count on a reliable and affordable supplier who can manage your request without harming your sales or margin.
- Storage - Your storage space may be insufficient for your new online request.
- Marketing Partners - To attract visitors to your website.
- Current providers - They could stay the same, but it is important to assess the consequences.
9. Cost structure
With the addition of partners, systems and processes, new costs are also expected. Take into account the new recurring costs for your business; it is important.
Consider the following:
- Shipping costs
- Adding employees and salaries
- Website operating costs and platform license fees
- Transaction fees
In the image below , we show what we believe to be the main challenges for businesses moving to e-commerce.
We invite you to do this exercise by yourself . You can also contact us if you think you need the help of an expert to build your ecommerce website .
Never stop optimizing your business
Examine each of the components presented, and you will be well on your way to launching your online business.
Remember to ask yourself the following questions:
- What products do you want to sell - from a demand and margin perspective?
- What will your growth look like, and how will you grow?
- In which technology does it make sense for you to invest? Choose a technology that is well supported and scalable.
And finally: Never stop optimizing your business.
The key to a successful online business is to take small steps, assess the situation and monitor your results closely.
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