Getting on Board With E-Commerce

Fifteen years ago, e-commerce companies like Lazada and Shopee didn’t even exist. Today, they have a large presence in regional and international markets, becoming household names in the e-commerce sphere.

In larger countries like Malaysia and Indonesia, building a consistent retail presence across the entire country can be unfeasible for smaller businesses. Both brands and consumers may face challenges dealing with traditional logistics in more remote areas and instead embrace online logistics to expand their reach.

As a growth trajectory, e-commerce no doubt appeals to traditional businesses. With the Internet, reaching out to new markets has never been easier for companies both large and small. However, setting up shop in the online marketplace is easier said than done. Your plan should account for the fundamental properties of the Internet and user behaviour. When customers shop online, they’re having different experiences and looking at your brand from a new, digital perspective.

Even as you’re jumping on the bandwagon, remember that tried-and-true strategies do not guarantee increased profitability online; what appeals to an offline shopper may not appeal to an online one. No matter what your e-commerce strategy ends up looking like, its success rests on customer acquisition, customer loyalty and channel optimisation.

Enterprises are increasingly moving towards a multi-channel commerce model that integrates online, print and sales channels into a single unified ecosystem. Traditional businesses looking at this new model must take several new key elements into consideration. The road to e-commerce strategy forks at the beginning – you must decide whether to sell on your own platforms, or through third-party online marketplaces like Lazada, Shopee and Qoo10.

Strategising for Maximum Potential

In crafting an e-commerce strategy, you should first understand your e-commerce position relative to your competitors; this can be through a detailed competitive analysis. In some industries, nimble e-commerce companies have capitalised on their lagging traditional counterparts entering and expanding the playing field with varying levels of success. Elsewhere, unconventional companies have broken new ground, speeding ahead with the momentum from their first-mover advantage.

If you find yourself in such an advantageous position, you should not be complacent, but instead continue to invest and innovate to maintain your early lead in the market. That said, don’t worry if your company is not a first-mover or an early bird; you can still weave into established markets as the first business to provide unique services or value propositions. In order to catch up and keep pace with industry leaders, you’ll need large investments and a willingness to explore new business models and processes.

After evaluating your position in the market, you’ll want to look inwards – your e-commerce strategy should be consistent with the overall corporate strategy. To customers, brands are the most visible aspect of your business; companies often rely on strong branding to build trust and acquire customers. Effectively positioning your brands online helps both new and existing customers find the company’s products and websites, providing a starting point for them to explore your business and discover other products.

For this reason, you’ll also need to decide what products to offer on websites. When your products don’t have to compete for shelf space, they collectively become more noticeable, marketable and can widen your potential consumer base. This is a powerful inherent advantage of online channels. For instance, American retailing giant Home Depot appealed to customers and maximised the effectiveness of their online platforms by offering a wider variety of products than their physical store equivalents.

While e-commerce platforms hold great potential, one thing customers will miss from shopping in physical stores is the helpfulness and personal touch offered by retail assistants. To inspire loyalty in online shoppers, it is critical to build reliable customer and fulfilment services.

“When your customer service is just as great online as it is offline, your e-commerce users will grow to trust your products and services – this is the differentiator that will make them repeat customers.”

Don’t make the mistake of viewing your e-commerce website and physical store as two separate entities. Think cross-channel coordination with an emphasis on convenience for the customer. For example, when you allow customers to pick up and return online orders through your physical stores, you’re making your business more accessible to them and elevating your customer and fulfilment services in their eyes.

Budget Planning for the Customer Journey

In contrast with traditional offline businesses, e-commerce does not require heavy initial investment in infrastructure, rent, shop space and stocks. Nonetheless, proper stock management, forecasting and planning remains necessary even as you take your business online.

Just like any other business, you’ll need to take fixed and variable costs into consideration when starting out in e-commerce. Some examples of fixed costs include business licences and website domain names, while variable costs include media assets and products – for instance, you may need to hire a photographer, designer or writer to produce high-quality images and product descriptions that can win over potential customers. Inventory and shipping costs must also be considered when procuring and delivering products; this includes import duty taxes incurred from shipping to and from overseas when you’re engaged in cross-border selling.

Budget planning should not only include the above factors; it is best undertaken while keeping a long-term strategy in mind, with particular focus on the development of your online presence and platform. One of the biggest misconceptions about online channels is a temptation to view them as merely standalone digital shopfronts, rather than crucial customer touchpoints that can generate customer loyalty and increase online sales.

For any e-commerce budget build, the rule of thumb is to always think about the customer journey that you hope to facilitate. If you are a florist, you might aim to enhance your mobile conversions and delivery experience. On the other hand, a contact lens seller may want to have a more engaging, personalised website that can offer different products based on customers’ preferences.

When you understand the customer journey, you can outline the possible requirements for your website upfront – this makes it easier for you to consider the most optimal website functionality for your needs and how it can contribute to your e-commerce business in the long run.