The rivers of eCommerce gold have been flowing since the pandemic began. In Australia alone we have seen eCommerce sales grow to reach 13% of total retail sales - up from 9% in 2020. This has naturally driven sizeable uptake in eCommerce offerings for large and small businesses alike.
Those with more advanced eCommerce offerings benefited from their established presence whilst those slow to move used it as an opportunity to accelerate investment into the eCommerce space.
While the pandemic has been the kick start many brands needed to truly put eCommerce on the agenda, driving growth, building maturity and scaling an eCommerce presence is a very different challenge to the early stages of growth.
One of the common misconceptions we see for those in the early stages of building eCommerce maturity is the belief that sales will continue to grow at the same rate and trajectory they have to date, without the realisation that driving that next wave or level of growth is harder without evolution of your strategy.
Building maturity and scaling your eCommerce presence
To begin to scale your eCommerce presence and build maturity, it is vital to understand that what got you to where you are as a brand will not get you to where you are going. Growth is harder to come by over time, so how can you drive the next wave of growth?
Don’t make every decision based on driving short term ROI
It’s not uncommon for organisations leveraging eCommerce to focus solely on short term metrics, which can lead to all investments being made on the basis of if it will deliver a sale today. This performance-based approach focusses on capitalising on low hanging fruit which will drive growth but may limit future success. Brands looking to scale will need to focus their investment beyond those with immediate payback today. Investment in areas of experience, brand and distribution are all important, as you can attract new customers, deliver on customer expectations in an evolving market and ensure your offering is differentiated in an increasingly cluttered online marketplace.
Look to diversify channel strategies
Too many eCommerce businesses exhibit a “channel dependency”, where one digital channel is driving the majority of their traffic and revenue. This channel dependency is an issue for a few reasons. In the digital world, being beholden to one platform or channel is a big risk to profitability and growth. In particular, social and search platforms algorithms change frequently and costs to advertise continue to rise, and being beholden can result in a sudden downturn in traffic due to algorithm changes, or impact profitability overtime as costs rise and the law of diminishing returns sets in.
Focus on driving loyalty
Those in the early stages of maturity can place too much focus and emphasis on acquisition, failing to re-engage consumers after their initial purchase. A strong eCommerce business is underpinned by a customer base whose lifetime value is growing over time. Having a sizeable and robust 1st party data asset is one strategy to enable the brand to deepen engagement and drive loyalty but it’s not the only one. Giving consideration to how to embed more loyal behaviours is also key. Loyalty programs, delivery subscriptions, and unique and differentiated offerings can be equally as effective to embed more loyal behaviours and build an engaged customer base that delivers ongoing revenue overtime.
Consider the role of marketplaces to reach new audiences
Marketplaces can sometimes be overlooked as a distribution channel driven by the perception they are in direct competition. However, marketplaces can provide valuable reach and enable you to new reach audiences beyond your own eCommerce channel to drive incremental sales.
Don’t compete with yourself
If your eCommerce offering is part of a broader direct retailing strategy, it is important to ensure that the eCommerce offering isn’t competing with other retail channels (like your bricks and mortar stores). Brands who understand its customer, moving across different channels have the most to gain, as omni-channel shoppers tend to be the most valuable, as they spend more with the brand overall and frequent more often. When an eCommerce strategy is thought of as a separate channel and adopts its own pricing and merchandising strategy it creates customer confusion and incentivises customers to shop via the most cost-effective channel at the time which impacts profitability across the board.
Build team capability
If you are new to eCommerce retailing, chances are your team is learning on the job. Whilst on the job learning is a great way to learn practical skills, it can also be an expensive exercise as you forego sales as a result of in-experience. Identifying key skill and talent gaps are vital to ensure the team is equipped to tackle the challenges ahead and tap into the growth opportunity that exists in your category.
Are you looking for help with building your eCommerce or digital strategy? We work with leaders to build transformation strategy and drive lasting organisational change. Get in touch with us to have a chat - we'd love to help!