In the excitement of beginning an online business, it can be easy to overlook some of the basic factors essential to turning it into a long term success. Alexandra Wiseman, e-commerce expert and Senior Business Developer at Nordea Connect, discusses the five things to remember when starting out in e-commerce.
It might seem obvious, but establishing that there is an actual need in the market for the product or service you are going to offer is an absolute first step. I have encountered many companies that overlook basic market research at the beginning, focusing too much on the product or idea itself. Keeping it simple and having a creative idea is great but it is still important to define what’s so special about the offering in a usually crowded marketplace.
Thinking this through will really help to develop a solid marketing strategy as well as establishing clear brand values. E-commerce companies can often begin by thinking a few Facebook or Google ads here and there will be sufficient in terms of their initial marketing efforts. However, it is always preferable to have a solid strategy from the beginning to be clear about exactly what it is that you want to achieve with your marketing.
Thinking about these things at a deeper level also means going into more detail about the values that the company stands for. Some helpful questions to ask can be: What do I want my customers to associate my company with? How can I make them feel part of the community I want to create? It’s really important to focus on how your customers can engage with your brand and identity. Build a community around the things your company stands for and make sure that they are part of the experience throughout the whole customer journey.
It’s important to understand that marketing should not be driven by a channel approach but by a strategy based on your goals. Google ads are of course a very different way of marketing than social media, which is all about engaging with customers and having a dialogue with them. Without a coherent brand story to build a dialogue around, it will be extremely difficult to engage potential customers on social media.
Many e-commerce companies see marketing as something that will solve itself but at the very beginning its critical to get the offering and brand story established, with the selection of marketing channels following as a result of those foundations.
Alexandra Wiseman, Senior Business Developer at Nordea Connect
Another common pitfall when starting an e-commerce business is not fully thinking through the potential operational workload to come, especially if the business is as successful as hoped. It can often be a case of saying “I am just setting up this store and I will send this product to whoever buys it.”
Sometimes it’s easy to think about a business idea only in terms of design and production but there are of course a great deal of practical issues to consider at the delivery end of the value chain. This is especially important to think about if you work full time and are beginning the business as a kind of professional hobby. You really need to be careful about how you spend your time.
It is a good idea to already establish how much operational workload you can cope with once the orders begin to pile in. Developing an operational plan should provide a much clearer idea of when it makes sense to outsource logistics over a certain amount of orders per week. It might also make sense to set up a 3PL (Third Party Logistics provider) process from the very beginning because then you will be able to focus on growth and marketing instead of getting caught up with time consuming practical issues. Establishing an efficient process for running the business is critical.
Automisation might also be relevant for other areas of the e-commerce company than just logistics, such as marketing. For example, there are good tools available to help with publishing and scheduling content on social media at certain times of the day. Any areas that can potentially be automised to free up time for critical tasks should be closely assessed.
It can be natural for a company starting out to focus on keeping costs close to zero and trying to do everything in-house. However, in some cases it might actually make sense to invest a bit more in automation and operational structure as spending time on the low value adding tasks may inhibit other areas of the business.
Getting practical hands-on experience of running different parts of your company in the beginning is undoubtedly a good way of making sure you become more business savvy. Once you find out which areas are more value adding, you can gain a better idea of where to optimise time. It’s very important when starting a business to make sure motivation stays high despite the initial challenges.
In general, most e-commerce businesses begin with their home market and see how things develop from there. The advice I often give is not to be afraid of going global already from day one. This doesn’t necessarily mean undertaking marketing in all of the different countries as that may become quite expensive and difficult to keep an overview of without the right people and tools. It’s more about considering whether to have different domains for each country and translating web pages into local languages as this often helps conversion rates.
On top of that, local payments are an extremely important factor to consider in each market. The Nordics in particular are very fragmented with different currencies in the four home countries as well as different forms of preferred payment methods for consumers. There are lots of things that you can do to increase your global reach but you also need to make sure that your customers feel the local touch and are safe and secure enough to buy on your e-commerce platform.
Once again, in considering the scope and type or your international reach, it’s important to do research. For example, reports have shown that some countries can be more open to reading content in English than others, so this is obviously something to think about when building a website. This is true as well for currencies, with the willingness of customers to pay in a different currency than their home currency varying in each location.
It’s important to do the research for each and every country to make sure you adapt to that country’s specific preferred standards. You can’t just think that US dollars, euros and English will be sufficient for your customers and your business, adaption based on data is very important.
Taking the time to consider these key elements will really help you to differentiate your offering from others. It’s also about finding out how best to communicate with potential customers in each country. Being smart about the details will always make a difference.
Alexandra Wiseman, Senior Business Developer at Nordea Connect
When it comes to improving operational efficiency, it’s always important to choose tools and platforms that can help you to scale. It can often be the problem that we are so focused on the here and now that we end up choosing the absolutely simplest and cheapest solution available or are driven to make a choice as we think we do not have the right knowledge to use a particular option. It’s often only when you begin to use a tool that you learn and understand what it can do.
It’s important to think about finding tools and solutions that match your business goals and can help you in the long term. If you have a large assortment and expect to have a high turnover of different products, then the e-commerce system that you have chosen might not really be the best in that case for those kinds of business needs.
For example, you may choose a web platform that focuses on design with many different pre-set options available as that is important for your business. On the other hand, an open source web platform might work but then you will need to have access to someone who is able to code. If you don’t know anything about how to build an e-commerce store then it will of course be a challenge. Or if your whole website crashes because you get too much traffic or the set-up is incorrect and you don’t know where to search to solve the problem, it will be difficult.
There are different Software as a Service (SaaS) options out there that might be more expensive but are preferable as they provide helplines and online support. These options can often be a bit more stable for a business with no developer skills. Whilst many experts would say don’t lock yourself into a system that is not open source as you can’t make changes yourself, as a small company you need to be able to make ready adaptations easily and efficiently without the need for too much complex in-house knowledge.
It’s always important to make sure that all of the tools that you end up choosing to support your e-commerce business are compatible with each other. For example, the web platform that you choose has an automatic integration to your accounting and backend systems and email marketing services can be added on top. The idea is to make sure that all of the tools are integrated together so that you don’t work in silos.
There are many great tools and solutions out there but you can’t really gain a full overview if these systems are not talking to each other. This can create huge problems, especially when it comes to data because you need to be able to measure everything that you are doing in a detailed and holistic way. A good question to ask is whether you are able to get data out of the systems you are using and whether you can consolidate it together so that you can easily analyse your performance and see how things are progressing.
From my experience, many smaller companies really don’t think about strategies based on consolidated data at all and think it’s just something for larger companies or for when you have a business up and running. It’s of course extremely important to be able to measure everything you are doing even if you are just beginning on your e-commerce journey. Otherwise it can be very difficult to justify your marketing investments.
Data can become far more easily accessible if you use tools that can gather and consolidate it automatically such as funnel.io or something similar. A common misunderstanding I often see is companies tending to think that Google Analytics is the only tool that is required to gain a full overview. It’s definitely a good start but by building up a solid marketing stack which includes your spend data, you will be able to gain a much more comprehensive summary to inform decisions on whether to cut spending or invest more into what works.
Instead of spending time on collecting the data, you will be able to spend time on reacting to the data and the conclusions you can draw from it. Lastly, it can be very worthwhile looking into Google’s online courses and academies as they can help you build your knowledge around analytics quickly.