Top Five Strategic Issues In E-Commerce
E-commerce has fundamentally changed the way we sell goods and services. Not only does it save time and money spent in shopping and travelling for shopping, but it also adds value. Who would want to pay extra for buying it from a store if it is delivered to their house cheaper?
You need to create, deliver and communicate value to your customers. Here are some ways.
Customer Acquisition: Find ways of expanding the pie rather than fighting over dividing it. An average online retailer would ship a brochure with the purchase that lists items being sold, as well as a phone number. Next, look at your incentives. If you are offering to sell the same goods at same price over the phone, you have to hire people to attend the phones. The e-commerce model was built on one basic premise and that is eliminating retail overhead, which adds no value to the customers. The best thing to do is adopt a Travelocity-like policy, which charges an additional fee to its customers who book over the phone. The bottom line is that shady competitive practices are benefitting the traditional channels as they are seeing their sales being saved, inspite of their inefficient model. E-tailers must aim at taking market share away from the traditional channels, rather than fighting each other and resorting to measures that fritter away the cost advantage of e-commerce.
Customer Loyalty: A measure of this which has become very popular amongst the mega corporations is called customer lifetime value. It basically calculates the profit you would make if the customer kept buying from you for a lifetime. It is essential that e-commerce-based business undertake more loyalty-based programs, such as progressively reducing prices with every purchase or points that can be redeemed for free gifts on an annual basis. The correlation of customer loyalty to success is undeniable.
Customer Service: Executives and small business have changed the meaning of this phrase to suit their own definitions. Some think that mere setting up of a toll free helpline will do the job. The reason behind this is that small businesses are more often than not pre-occupied with sales on their mind. Most rarely think about customer service, but it is essential that an entire procedure is developed to provide uniform and timely service to customers.
Operations must be monitored and random surveys must be done amongst customers to check the efficiency.
Brand Management: Once again this is where the big corporations and retailers score over the average e-tailer. People buy to satisfy psychological needs. Just have a look around when people are buying. How many people would consider how durable a shirt is and how many would buy it because it is fashionable? The best ad is one that has recall value. The focus on sustained customer relationships is missing in e-commerce and here is where traditional retail scores. So if you are able to build a brand and have a large set of customers, you too can reap the benefits. All that is needed is a deep thought with a little creativity.
Content Management: Articles that look like blatant advertisements are doing the rounds on credible places on the Internet. This would endanger the entire trust-based selling as customers would understand the ulterior motives. Content management needs to find out ways of constantly bringing groundbreaking information to the audience. For this, they need to keep a close eye on the customers’ behavior and use of the products, as well as the keywords that they use.
“Content is king,” and content isn’t keywords placed in an attractive way.
Global versus local: A reason e-commerce came into vogue was because you could have the world as your marketplace. But if you have a local focus, you can have a much better optimized supply chain and serve products cheaply and also you can conduct surveys frequently to find out the changing trends and patterns. A narrowly defined vision is essential for your organization. This does not hold true for every e-tailer, but if you are competing on price or service, having a local focus will make you the smartest seller on the street.