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Thursday, July 16, 2020

E-Commerce July 16, 2020

How to create an e-commerce strategy for your business?

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.

ProPhonez Team 0

E-Commerce July 16, 2020

Mini Guide on Using the Business Model Template to Launch an E-Commerce Website

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.