E-commerce: A good e-commerce user experience is unobtrusive and transparent– ‘it just works’… The best content in the world won’t drive revenue if nobody sees it…E-commerce: Build a business, not a website. An e-commerce website is a business– first and foremost; the website is merely the commerce delivery channel. An effective e-commerce site begins by understanding and defining the business strategy, goals, and metrics for the site, and then crafting a website that is tailored to meet those site objectives.
Begin with 5-Ps: Proper-Preparation-Prevents-Poor-Performance: You don’t build a house without an architect and a blueprint, and you shouldn’t build website without a digital equivalent. If you want your digital ‘house’ to crumble, the surest way to ensure failure online and waste untold time and money is to skip proper planning and jump blindly into implementation.
A successful e-commerce business must deliver real economic value… The Internet has torn up the rulebook by which businesses have traditionally operated, and the new rules are still being formulated… According to Evans and Wurster; companies must be prepared to repeatedly revise their ideas and strategy as their e-commerce business evolves. They must also be prepared to rethink, radically– the structure of their organizations and not shrink from making major changes to operations. The future of e-retail is global… there is an increasing trust and confidence in purchasing online… e-commerce is becoming an integral part of any country’s economy and should be considered so…
According to Helen Thomas; e-commerce trends for 2013 clearly pose a win-win situation for both the brands and their customers. Online retailers will have to build distinctive strategies to suit their business motives, whereas consumers will be ‘picky’ looking for better alternatives. Companies will have to spend more time building brand loyalty by consistently providing a great user experience for both existing, as well as newly acquired consumers. The trends that are shaping e-commerce are: Go Local! Go Mobile! Go Cashless! Get a Video, Share it Social Media! Get Short, Simple, Original Content!
E-commerce Market Trends: B2C e-commerce sales in 2012 grew 21.1% to top $1 trillion for the first time, according to new global estimates by eMarketer. This year, 2013, sales will grow 18.3% to $1.298 trillion worldwide, eMarketer estimates, as Asia-Pacific surpasses North America to become the world’s No. 1 market for B2C e-commerce sales.
Sales in North America grew 13.9% to a world-leading $364.66 billion, in 2012– a figure expected to increase 12.2% to $409.05 billion, 2013– as more consumers shift spending from physical stores to retail and travel websites– thanks to lower prices, greater convenience, broader selection and richer product information. But despite strong growth, North America’s share of global sales will drop from 33.5% in 2012 to 31.5% in 2013 as Asia-Pacific surges ahead. B2C e-commerce sales in Asia-Pacific grew more than 33% to $332.46 billion in 2012.
This year, 2013, the region will see sales increase by more than 30% to over $433 billion– or more than one-third of all global B2C e-commerce sales. The rapid growth in Asia-Pacific sales is a result of several factors. Three Asia-Pacific markets– China, India and Indonesia– will see faster B2C e-commerce sales growth than all other markets worldwide in 2013, while Japan will continue to take a large share of global sales. China, unsurprisingly, is the primary driver of growth in the region.
The country will surpass Japan as the world’s second-largest B2C e-commerce market this year, taking an estimated 14% share of global sales, as its total reaches $181.62 billion, up 65% from $110.04 billion in 2012. The U.S. will remain the single country with the largest share of worldwide B2C e-commerce spending, at 29.6% in 2013– down from 31.5% in 2012 despite relatively strong growth. This will continue throughout the forecast period, though China is closing the gap fast. In 2016, China will have 22.6% of the worldwide market vs. 26.5% in the U.S.
China also boasts the highest number of people who buy goods online in the world– nearly 220 million in 2012, according to eMarketer– a result of increasing Internet penetration; burgeoning middle class with growing trust in online shopping; government-driven campaigns to promote consumerism; improved infrastructure; greater product selection and services offered by online sellers and retailers.
According to eMarketer, B2C e-commerce sales in the U.S. will grow 12% to $384.80 billion in 2013—after growing 13.8% to $343.43 billion last year– as average B2C e-commerce sales per user reach $2,466 this year among those who buy goods online in the U.S. Average spending per user is lower in China– set to reach just $670 this year, eMarketer estimates– but the sheer growth in China’s digital buyers is staggering. The country will nearly double the number of people buying goods online between 2012 and 2016, eMarketer estimates, resulting in considerable upside for B2C e-commerce sales in China through the forecast period.
In the article Trends That Drive E-Commerce Strategy by Heather Clancy writes: Retail businesses are in the middle of one of the most profound business model transitions for the industry ever, as consumers transfer their shopping habits to mobile devices and e-commerce Web sites. So where should business development executives and merchandise managers’ focus their attention?
A recent analysis from Forrester Research (U.S. Online Retail Forecast, 2011 to 2016) offers some sign-posts. Overall, the research firm believes we’ll spend $327 billion annually by 2016; that compares with $200 billion spent in 2011. Here are five trends underlying that prediction:
- Higher percentage of sales from existing online shoppers: While new shoppers are driving increases in e-commerce activities, existing ones are actually more of a factor. Forrester predicts that the average shopper will spend $1,738 annually by 2016, compared with $1,207 in 2011. So, it’s imperative that retailers consider– technology, Web site design principles, and incentives that encourage people to fill their online shopping carts with more items.
- Fourth quarter remains dominant cyber-season: More than 70% of the shoppers who purchased items online during the fourth quarter of 2011 said that they did so because of deals and promotions, Forrester reported. In November and December 2011, e-commerce accounted for about 15% of overall holiday sales, which is a much higher percentage than during other times of the year.
- Keep an eye out for flash sales sites: Forrester calls out sites that offer what we used to call ‘fire sales’ in real world retail. These are sales where the prices keep dropping, as long as merchandise lasts.
- Online loyalty programs are more of a factor: Forrester reported that in 2010, about 9% of shoppers belong to new frequent buyer programs. In 2011, about 12% of online shoppers were members of such clubs.
- The tablet is driving mobile shopping: The smartphone is extremely important for when shoppers are in stores, but the tablet is more likely to be used for researching and for browsing products online. In addition, shoppers were more likely to ‘place an order for physical goods’ using a tablet than a smartphone.
In the article Develop an E-commerce Pricing Strategy by Mark Hayes writes: With the advent of highly competitive pricing tools, winning the online pricing war can be lose-lose for e-commerce retailers. Large online retailers have an advantage in competitive pricing, as they can set the price low enough to run smaller retailers out of business. But there are other ways to compete – and it all starts with developing (or at least thinking about) an e-commerce pricing strategy:
- Know your Margins: The reality of online retail pricing is that the lowest price doesn’t always win. In fact, pricing battles usually end with you pricing your products too low. When you consistently price too low, your customers will always expect the lower price, even when it is unsustainable to your business. As a result, you could lose those customers over time.
- Know your USP (Unique Selling Proposition): What makes you different? Every company has to tackle this question to determine their value proposition and target market. With pricing competition at an all-time high, retailers have to ‘think outside of the box’ when crafting a marketing or promotional strategy for their online store…
- Lose-Leader (Selling Below Market Value): Highly discounted pricing can be advantageous if paired with the appropriate merchandising strategy. The Lose-Leader Strategy assumes that an item sold below market value will encourage customers to buy more overall… The end goal is to sacrifice losing money on one item in order to make a profit on the rest of the products sold (i.e. cereal cheap, milk expensive).
- Offer Incentives: Once you know your margins and price accordingly, then you can offer incentives to motivate your customers to buy. Even if you can’t sustain an ultra-low price in the long-term, you can always offer limited time pricing to reach these customers… Being savvy with your incentives allows you the ability to garner attention to your products, and build a reputation for having good deals, without breaking the bank.
- Diversify Product Offerings: To offer a diverse product offering that will sell, e-commerce store owners must first understand their market demand… Having a better idea of what your customers want gives you the opportunity to sell and generate profit from diversified products. The end result of proper diversification is that online retailers will offer bad options to emphasize the good, driving customers to act based on perceived value.
- Test your E-commerce Pricing Strategy: As with many things in e-commerce, one size does not fit all, so it is important to measure and test the success of changes you make to your online store’s pricing strategy. Ideally, every change should be tested and validated with an analytics tool…
While e-commerce sales will grow for all industries, according to Gartner– retail, discrete manufacturing, wholesale distribution, entertainment, and travel/leisure industries have the greatest potential for growth. No surprise here. But, keep in mind, that if you are a solopreneur or a small, completely virtual firm, you have a huge competitive advantage over larger companies trying to digitize their sales efforts.
The companies that learn how to make each customer experience a stellar one will stay at the head of the industry. Gartner sees the changes in– mobile, social and globalization as the 3 most important reasons to evaluate your e-commerce marketing strategies. The wide availability of cloud technology and finely honed market research are some additional reasons to reevaluate your product marketing strategy.
With globalization, one of the most overlooked strategies is– how well you are able to market to the needs of individual international customers. For example, while Americans prefer uniqueness and individuality; the Chinese prefer long-term relationships…
There are a number of challenges for e-commerce businesses on the horizon, and companies that adjust first– then their success will come easier and swifter… This is scary time, but for brands and companies who get it, who are able to make sense of it, this is an exciting time, a time of great opportunity… But for those who don’t– well, try something else…