Let’s talk about some of the insider learnings I have had by consulting with successful e-commerce businesses. E-commerce’s most important success driver is value proposition.
Does e-commerce have any strong value proposition that all?
The answer is yes.
E-commerce has a lot of value as it gives a lot of variety for people to choose from particularly for users living in Tier II and Tier III towns where they don’t have access to a huge variety of merchandise. In such situations, e-commerce comes to the rescue.
Level Playing Field-
E-Commerce creates a level playing field as it does not distinguish between customers who have deep pockets and are very sophisticated or smartly dressed when they walk into a showroom on a person who is coming from Tier III Town or rural background.
E-commerce is also completely transparent about the prices. Since prices are given upfront, there is no room for haggling or negotiation, which brings a lot of peace of mind to the consumer.
The growth driver for E-Commerce in 2019 will be B2B and not B2C. Do you know 68% of the business in the world is B2B and B2C is only 32%. In B2B the consumers which are traditionally your retailers or wholesalers are more traditional with low adoption of technology. But does B2B E-commerce offer any advantages? Yes of course.
E-Commerce can drive better operational efficiencies in business to business. Many E-Commerce companies are not able to grow because people in B2B have trust issues because the ticket size is bigger and there is a higher level of the stake so people want to do the negotiation. E-commerce companies need to develop trust among their customers.
They need to provide a social media platform wherein customers can discuss, chat, negotiate in B2B. E-Commerce transactions offline are largely based on credit. The intermediaries are not used to buying on upfront payment.
So can B2B internet companies assess the creditworthiness of the customers based on transactions which are happening on the platform? So here artificial intelligence and machine learning and big data can play a role.
Long Term Vision-
E-commerce needs long term vision. E-commerce is not for marketers who are there for the short term. Initially, it’s all about deep discounting, it’s about thin margin because the market is not ready to pay for convenience and shipping, which means the marketer has to make some losses.
It may be funded by VC money. What it means is that there will be few players who will dominate the market because you can’t make a lot of money on a small volume of transactions but what you can do is you can make small money on a large volume of transactions.
In future E-Commerce, companies will be highly tech-driven so you will need a solid recommendation engine which will assess the past purchase behaviour of customers and show them similar products and do a cross-sell and upsell. Internal search should be very powerful so that customers are able to find exactly what they are looking for.
Next important thing for success in the e-commerce is customer-centricity. You have to be highly obsessed with customer satisfaction. So you must have an easy returns policy, charge a small margin, do fast delivery. Another pertinent question is should you have a marketplace or should you go for the inventory model. Marketplace is full of challenges.
In Marketplace, customer satisfaction is low because you are basically acting as an interface between the seller who has the Merchandise or the inventory and the buyer. There is absolutely no control about the quality of material, there is no control on the process which makes it very difficult to keep the customer satisfied. Moreover, the suppliers are highly unorganised which leads to late deliveries and fulfilment.
But if you go for inventory based model you have complete control on the quality of merchandise, on timely delivery but it will require investment.
What about big players like Google shopping on Facebook Marketplace Marketplace who are entering into The E-Commerce space and you can buy products from their portal so competition is only going to intensify in E-Commerce.
Do you know that E-commerce is also a search engine where people are searching for products? So what it means if that as a marketer you can do SEO On The E-Commerce platforms. What it also means is that E-Commerce is emerging as an advertising platform.
The above tips are essential for anyone who wants to succeed in ecommerce.
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