Unless you have been living under the rock for the past 15 years, you are aware of the term eCommerce. You might even already run an eCommerce store or plan to start soon!
Undoubtedly, there are a lot of opportunities in the eCommerce industry. According to Statista, global retail eCommerce sales amounted to 4.9 trillion U.S. dollars in 2021. This figure is expected to grow by 50% to $7.4 trillion by 2025.
Furthermore, eCommerce sales are expected to account for 24.5% of the total global retail sales by 2025.
With this amount of money flowing around, opening an eCommerce store should equate to easy money, right?
The amount of money in this sector can encourage an erroneous assumption that opening an eCommerce store will lead to automatic success.
However, a simple Google search will uncover the reality of eCommerce stores closing down their operations due to unprofitability. The truth is that, just like offline businesses, eCommerce stores are also businesses.
To build a profitable eCommerce store that thrives over the long term, you need to support it with strong pillars.
Fortunately, in this guide, we’ll explore the 5 pillars of eCommerce that have been created by the founder and CEO of Adspace Dan Ben-Nun.
Without much further ado, let’s get started.
1. Product-Market Fit
Over the years, you’ve probably heard of “genius” products that failed to sell. Of course, everybody loved the product idea and added it to their future shopping list. But they never got around to buying it.
That’s because the product failed to meet the needs of enough people. Consequently, many businesses have become extinct because they failed to find the product-market fit.
What is product-market fit?
Product-market fit is achieved when a product meets the needs of its ideal customers to achieve sustainability and profitability. Businesses that achieve product-market fit have customers who use their products on a regular basis, whether they actually need them or have become used to them.
Furthermore, satisfied customers will usually tell their friends and family about your product and the problems they solved with it.
So, before putting on your marketing hat, ensure you have a product your audience will see as a no-brainer to meet their needs.
If the product-market fit is essential, how can you achieve it? Here are some important tips:
Create buyer personas
When we say “market,” it has different meanings depending on your product. For instance, the market for Rolls Royce is different from that of Toyota.
Practically, your market consists of your ideal customers. These are the people who will see your product as a must-have rather than a luxury.
Buyer personas are documents where you can enter details of your ideal buyers. In your buyer persona, you should have pieces of information such as:
- • Name
- • Gender
- • Location
- • Income
- • Job
- • Ambition
- • Pain points
- • Favorite social media platforms
Beyond this list, there are more details you can add to your buyer persona. In addition, if you want to sell many products, you can create buyer personas for the products.
Here’s a simple example from Drip:
Identify underserved needs of customers
In most cases, your product will not be completely unique in terms of the problems it solves. But there are needs that current solutions are not meeting for some users.
This is where your business can come in to create products that meet the underserved needs of customers. When this happens, users won’t hesitate to leave a competitor for your product.
One way to identify these needs is to observe the current products in the industry. Another way is to create surveys and other feedback mechanisms to obtain pain points that customers still have.
From these pieces of information, you can build products that people want to buy online.
Clearly define your value proposition
Once you discover a key pain point that current products have not addressed, you can build your value proposition from here. However, your value proposition goes beyond that.
Your value proposition is essentially the promise you make to potential buyers on your eCommerce store. Are you offering faster delivery? Is it vintage products that buyers will love? Or is it products for people shopping on a budget?
If it’s a particular product, what makes your product and service unique compared to other similar businesses?
As a small eCommerce business, your value proposition is what buyers use to identify you. Therefore, you should communicate your value proposition on your homepage, landing pages, product pages, and more.
Specify, develop & test your minimum viable product (MVP)
Before you throw millions of dollars down the drain for an idea that will fail, you should first consider building a minimum viable product (MVP). One of the mistakes most eCommerce businesses make is to think you need months of development before having your MVP.
In reality, your MVP is a way of testing your hypotheses about the critical needs people have and the solutions they want. First, are you accurate about the problems potential customers have?
Sometimes, the problem may just be in your head, and your buyers don’t see it as a problem. Second, will your solutions satisfy their needs if the problem is real?
In 1999, when Nick Swinmurn wanted to start Zappos, he went to his local mall and took pictures of shoes. Then he posted the images on the website to gauge demand for them.
This way, Nick could verify the demand for his minimum viable product without buying expensive inventory.
Once you develop an MVP, you should roll it out to take feedback from users. During this period, you’ll know what needs to be improved, added, and removed from your eCommerce business.
Analyze market satisfaction
After rolling out your eCommerce store, what do buyers think about your store and products? One way to analyze market satisfaction is to take feedback through surveys, emails, and other marketing channels.
You can provide an incentive to encourage users to give feedback about your product. From the market satisfaction, you can determine whether you have a great idea that will prove profitable in the long term.
Likewise, you can obtain information to improve your products.
Having said these, it’s important to note that, even if you have a product-market fit today, your products must evolve as your customers’ needs evolve.
2. Site Experience
When buyers visit your website, they want to find their favorite products and checkout without stress. Unfortunately, if your site experience is poor, this may chase buyers away, never to return.
So, while trying to sell the best product possible, you need to ensure a sleek user experience on your website. The good and bad news is that customers share with others when they have both very good and very bad experiences on your website.
According to research by Temkin Group, 44% of people told friends about a very good experience compared to 46.7% about a very bad experience.
When we talk about site experience, it involves many elements. Here are some essential steps to take to boost your site experience:
Improve your website navigation
How fast can shoppers find products on your website? If they have to take too much time to find products, many of them will bounce off your website.
One way to improve website navigation is to have extensive product categories at the top bar of your webpage. Beyond that, a search box will help them find the product they want to buy. Here’s an example by Etsy:
With these features, it’s easy to find any product. Generally, the best practice is that no visitor should take more than 4 clicks to find a product page.
Apart from categories, you can use personalization to improve website navigation. Naturally, personalization ensures that buyers see products they’re interested in.
There are many approaches to personalization. For example, it can be according to a shopper’s location, purchase history, website behavior, or time of the year.
These two significant steps will ensure buyers can quickly discover the products they love on your website.
Make your eCommerce store mobile responsive
A large number of shoppers today browse eCommerce stores on their mobile phones. For instance, according to data from SEMrush, 72.17% of Amazon’s and 82.84% of Walmart’s traffic in the U.S. in April 2022 were from mobile devices.
Therefore, you must ensure that shoppers have a great experience on your mobile site. If there’s no budget constraint, you can build mobile apps on Android and iOS.
In some cases, you can even integrate unique technologies into your mobile app. For example, Warby Parker uses Augmented Reality (AR) on its mobile app so that shoppers can see how glasses fit their faces before they buy them.
Perform UX testing
While there are many best practices for building an excellent site experience for your visitors, there’s no design that works all the time and for every audience.
That’s why you’ll find that the best-designed websites have changed significantly over the past 5 years. But what informed these changes? Just changing page elements because you fancy it won’t yield the best results.
But with user experience (UX) testing, you can easily discover changes that lead to a better experience. To achieve this, you can test changes by creating variations of your website pages and tracking their metrics.
To perform UX testing effectively, you need to use the right tools depending on the elements you want to test. A popular tool for this purpose is UserZoom.
With these tools, you can set up your tests and obtain insights into how shoppers use your website.
Analyze significant metrics
To improve your site experience, you need to understand metrics that provide insights into your visitors’ experience. Here are some website metrics to track to know how good your website experience is:
- • Bounce rate: when visitors hate the experience on your website, one obvious way to show it is to leave. The bounce rate calculates the percentage of visitors who only viewed a single page before leaving your website. So, you want to keep the bounce rate low.
- • Time on site: this is another metric that shows people are satisfied with your content and usability. If visitors spend a lot of time on your pages, it’s a sign that you’re providing value. Consequently, you can improve your Google search rankings.
- • Pages per visit: this is the number of pages a visitor views before leaving your site. As an eCommerce store, you want people to view many similar products before making a purchase.
- • Returning visitors: how many of your visitors come back to your website? A high percentage of returning visitors allows you to convert more buyers and increase repeat buyers.
- • Customer lifetime value (CLV): this is the average value of a customer during the period in which they bought products from your site. Your CLV will affect other elements of your operations, such as marketing. A high CLV shows that you’re able to turn many customers into repeat customers.
By following these vital steps, you can improve your site experience and, consequently, sales and revenue.
After finding a product-market fit and improving site experience, you need to bring people to your eCommerce store. After all, people will only buy from eCommerce stores they know.
That’s why you must create a robust sales and marketing strategy to reach more buyers. Some ways to acquire more customers include:
Generally, when shoppers love your service, they’ll tell their friends. But when they get rewarded for referring their friends? This will encourage them to share more.
Apart from referring buyers, you can also create an affiliate program for your products. This way, people who help you sell products will get rewards for it.
With referrals, bloggers who feature your products in their reviews will have an opportunity to make money when they refer buyers for the products.
Even if you have a unique product, you shouldn’t restrict the sales to your website. That’s because you can reach a bigger audience in online marketplaces.
For example, selling your products on eCommerce marketplaces like Amazon, Etsy, eBay, etc. means you’ll have access to hundreds of millions of users monthly. Furthermore, people who use the affiliate programs of the marketplaces can promote your products.
For instance, here are wristwatch brands on Amazon:
Sometimes, you have to pay to gain the exposure you want for your products or eCommerce store. Fortunately, you’ll find many paid advertising opportunities for your business.
The most popular paid advertising platform is Google Ads. You can create search ads to target keywords that your ideal customers will likely put in the search box.
By doing this, your business will show at the top of the search results when people are looking for your products. Another option is to run banner ads. More so, you can run paid advertisements on social media.
If you’ve just started a new eCommerce store, there’s a high chance that a low number of people know your business. Luckily, some influencers in your industry have built big followings due to their expertise or celebrity status.
Many of their followers trust their recommendations and look up to their advice. As a result, you can partner with these influencers to promote your products. This may be at a cost or promise of your products.
One of the most popular platforms for influencer marketing is Instagram. However, beyond Instagram, you can partner with bloggers to review your products on their blogs.
With influencer marketing, you can leverage these bigger entities to promote your products to an interested audience. Here’s an example by Alo Yoga on Instagram:
With over 4 billion users, social media is a space where you’ll find your ideal buyers. For instance, you can market your business on platforms such as Facebook, Instagram, Twitter, LinkedIn, TikTok, etc.
But with the number of social media platforms, you must choose the few suitable for your business. So, recheck your buyer persona and see the favorite social media platforms of your ideal buyers. Then, you can focus on these platforms to reach them.
Beyond your organic social media campaigns, you can run targeted paid campaigns to reach a bigger number of people.
Even though many people feel uncomfortable about it, you have to do it sometimes. Some of your potential customers are unreachable through other marketing channels. And if you run a new eCommerce store, very few people know your business.
Therefore, cold calling is sometimes necessary. However, when cold calling, ensure you’re talking to someone that will likely buy from your website. So, even in your cold calling, you should know the person you’re calling.
With an ROI of $45 for every dollar spent in eCommerce, email marketing is one of the most effective strategies you can use to acquire more buyers. Furthermore, thanks to personalization, you can now send highly relevant emails to your subscribers.
Some email marketing software packages also allow you to create automated email sequences that trigger based on subscribers’ actions on your website and in your emails.
Common email sequences you can create include welcome emails, abandoned cart emails, promotional emails, transactional emails, and onboarding emails.
The reality is that most of your buyers will use search engines when researching for products to buy. Is your website showing up when they’re searching on Google?
Again, your buyers need to know your website long before making their purchasing decisions. So, when they’re searching informational keywords, your website needs to show up providing valuable information.
How do you rank your website on search engines? While there are many SEO myths online, there are also best practices that are vital. These include keyword research, optimizing your page for a target keyword, creating content that meets searcher intent, and more.
Of course, you don’t need to execute all the acquisition strategies explained above. All you have to do is test some of these strategies and see what works best for your business. On the other hand, you can reach out to marketing experts (like us) who know what works for various eCommerce businesses.
When a buyer decides to make a purchase, it’s a decision that takes time. Depending on how essential or costly the product is, this can take between days and weeks.
As an eCommerce store owner, you need to understand this lifecycle and market your business effectively at every stage of the lifecycle. Here are 4 critical stages of your customer lifecycle:
This can also be called the top of the sales funnel. At this stage, the prospect is still seeking information about products.
So, they’ve not decided which product they want to buy. In fact, some of them have only identified their problems. Here, they want to find more information about possible solutions.
Therefore, you can use media such as your social media accounts and blog posts to educate your audience about vital industry topics. This way, you’ll start providing value to your prospects before they consider buying.
At this stage, which can also be called the middle of the sales funnel, the prospect has identified a few products that can solve their problems. However, they’re still looking for more information to determine the best option.
During the consideration stage, you can use marketing channels such as blog posts, social media posts, emails, and influencer marketing. The major aim here is to stress the benefits buyers will gain when they use your products or eCommerce store.
Another way to convince prospects at this stage is through social proof. This includes customer reviews, customer base, testimonials, reputable brands that use your products, and more.
Hurray! You’ve finally convinced the prospect that your product is the best for them. But your work is not done.
You have to provide instructions on how they can purchase your products. For example, what are the payment options available? What are the various models of your product?
At the conversion stage, the prospect is ready to buy, and you just need to guide them through the buying process.
While you’ll feel happy to sell your products to shoppers, that’s not the end. Your eCommerce store will truly become profitable when you turn customers to repeat customers.
For instance, Bain & Company estimates that a 5% increase in customer retention can produce more than a 25% increase in profits. So how can you ensure customers come back to buy again?
First, you have to onboard the customer after purchase. This means you can create an email sequence that provides the information your customer needs to get the best value from your product.
Furthermore, you can upsell or cross-sell other products based on the purchased product. Then, you can send promotional offers of products they may be interested in.
By understanding the customer lifecycle and creating your strategy accordingly, you’ll deliver the right messages to prospects and customers at the right time.
5. Reporting and Analytics
Once you set eCommerce goals, you need to track critical numbers. First, these numbers help you to measure your performance compared to your goals. Second, you’ll obtain insights that can provide growth opportunities.
Of course, to get these metrics, you need to use the right marketing dashboard software. Apart from that, these tools will also help you create reports for your boss or shareholders.
Then, you need to track the best metrics that provide insight into your eCommerce store operations.
Here are 6 metrics to consider:
- • Sales conversion rates: this is the number of people who buy products on your website compared to the number of people who visited. According to the Unbounce conversion report, the average eCommerce rate is 5.2%. Of course, that varies across industries.
- • Average order value: this is the average amount that customers spend per order. It’s the total revenue over the total number of orders.
- • Shopping cart abandonment rate: no matter how good your website is, some shoppers will add products to carts without buying. According to the Baymard Institute, the average cart abandonment rate is 69.82%. Cart abandonment rate is the number of people who leave their cart without buying compared to the number of people who added products to carts.
- • Customer acquisition costs: with this metric, you’ll know the average amount you spend to acquire a customer. These costs should not exceed your customer lifetime value. Otherwise, you’ll run at a loss.
- • Returning customer rate: as mentioned earlier, you need to turn your customers into repeat customers to grow your eCommerce business. This metric measures the number of return customers compared to the total number of customers.
- • Customer lifetime value: this is the value of a customer over the period in which they bought products. With this, you’ll know the value of each customer and how much you can spend to acquire them.
These metrics will provide an insight into vital aspects of your eCommerce operations. That said, this is not an exhaustive list of metrics, and you should add more metrics during your analysis.
For any building, pillars are the sources of strength. Conversely, weak pillars mean lower integrity of the building.
Likewise, this analogy applies to your eCommerce business. Every eCommerce business requires a lot of hard work to survive and thrive.
Luckily, we’ve been there and done that regarding growing eCommerce businesses. Ensure you bookmark this guide and go through it whenever you need more information about growing your business.
Are you facing any challenges in your eCommerce business? Is there a pillar you’d like to add? Let’s know in the comments!