Danny Wong is an entrepreneur, marketer and writer. He works with startups & tech businesses. Find his clips on Entrepreneur, HuffPost, The Next Web, Salesforce.com, and ReadWrite, among others.
In 2016, eMarketer and Forrester predict U.S. eCommerce companies will sell between $355 and $393 billion worth of product. Their estimates also suggest American eCommerce revenues will reach upwards to $500 billion by 2018. For brands to stay relevant and get a slice of the pie, it will be important that they update their existing business, marketing and merchandising strategies to adapt to the needs of the modern day consumer. Changes in buying behaviors and technology have significantly affected how people shop; companies that embrace rather than resist those changes will find themselves easily currying favor with customers.
For eCommerce companies, building a brand offline is counterintuitive when, in most cases, 100% of their sales are generated online. But an increasing number of digital-first brands are relying on offline promotional tactics to grow their business. As standalone efforts, offline marketing campaigns can be incredibly profitable; when coupled with online marketing strategies, brands see a compounding effect on their ROI. In fact, a study by iProspect reveals that offline marketing influences up to 40% of online shoppers to make a purchase.
For eCommerce companies, building a homegrown fan base is hard. This is especially true if you discount all the family and friends you coerced into hitting ‘like’ on your Facebook page.
But I’ll let you in on a secret: You don’t have to do it alone.
Across the web, tens of thousands of ‘ordinary people’ work long, grueling 10-hour days crafting and promoting their personal brands online. These new media celebrities call WordPress, Instagram and Facebook home. And with each blog post, photo or status update they publish, they garner the attention of thousands, if not millions, of fans who absolutely adore them.
Last year, eCommerce strategist Web Smith published a compelling case for why companies should partner with other businesses. For Entrepreneur, he wrote, “Over the course of my seven years as an entrepreneur, I’ve learned that it’s tough to be the kid on the playground without any friends. The same is true in business. You can survive alone, but you’ll only really thrive when you plug into the community around you. External partnerships can serve as a startup’s connection to an established community by making their product or offering seem more familiar and less risky. For small businesses and startups, building this brand recognition and affinity is critical.” Essentially, what he means to say is: To gain a competitive edge, companies should ally together and pool their resources to drive mutually beneficial results.
Of course, partnerships can happen in the most unlikely of ways.
When shoppers arrive at checkout, an overwhelming majority get cold feet. The data suggests that, on average, 68.53% of shopping carts are left abandoned. Additionally, for eCommerce stores, a whopping $4 trillion worth of goods are left idle in shopping carts floating around cyberspace. On the bright side, there is a 63% chance of recovering lost sales with targeted email campaigns.
But what if you could nip the problem in the bud?
As a store manager, you are expected to know every intimate detail of your business. Without hesitation, you should know which products are available, how many orders you receive each month and what your ideal customer looks like. So, it may be hard to believe the fact that there are several elements of the customer experience that are unknown to you. That is because you do not spend enough time in your customer’s shoes.
When I built my first eCommerce business, every order mattered. We accommodated as many customer requests as humanly possible to get product shipped out the door and into happy shoppers’ hands to earn an extra buck. Sometimes, we even fulfilled orders at cost because we were so eager to grow our customer base and get the word out. But when an order came in from Canada, we weren’t quite sure what to do. As a U.S.-based company focused on servicing customers in all 50 states, we felt overjoyed. It seemed as though we could open ourselves up to a completely new market and multiply sales that way. But our first cross-border shipment was disastrous....
When serial entrepreneur Noah Kagan challenged himself to make $1,000 in 24 hours, he did just that and, in the process, founded Sumo Jerky. An avid consumer of jerky, Kagan hypothesized there were enough people out there who would happily pay him money for delicious jerky. So, he spent five minutes deciding on a name and building a basic landing page. Then, he reverse engineered how many orders he’d have to sell before hitting his $1,000 earnings goal. Next, Kagan imagined who his ideal customer would be and drafted a marketing plan. Finally, he reached out to people he knew that were likely to place an order and before his 24 hours were up, he had surpassed his goal. With $3,030 in sales and $1,135 in profit, he proved to naysayers that building an eCommerce business — or any business really — is entirely possible with an almost negligible amount of upfront investment and a ton of willpower.
In 2014, research firm Nielsen conducted a study that found 85% of all consumer packaged goods (CPG) product launches flop. Of course, many see this as a necessary cost of doing business. To effectively test whether or not their ideas will fare well with consumers, big brands develop dozens of products, investing millions in the process, hoping that a handful will become wildly popular. And they do all this knowing a majority of their newest products will fail. For small businesses though, this statistic is hugely discouraging. Fortunately, there are things brands and store owners can do to ensure the next products they develop, launch and promote are a success.
Years ago, a surprise hit my inbox. Google Analytics gifted me $100 in AdWords credit with the promise that I now had the opportunity to get in front of 13 million potential customers. As a college student living off of a tight budget $100 worth of anything made me feel like I had won the Powerball (sad side note: the recent $1 billion dollar jackpot has now been claimed folks). Having just launched my first eCommerce business, this was sublime timing. So, I invested Google’s $100 AdWords credit towards pay-per-click ads on targeted search queries. Within a few days, my credit was exhausted and a quick look at our internal analytics showed a paltry number of conversions. Actually, that number was zero.
When a lot of people hear the terms “content marketer” or “content strategist,” they may not have the slightest clue what they mean. Explaining jobs to family and friends who don’t work in media is a nightmare. Not only are the titles vague, but they mean different things to different companies. Are these people copywriters? Do they plan ways for Fortune 1000 companies to dominate the world? What qualifies as “content”?
When Justin Butlion, content and social marketing manager at Yotpo, analyzed data across 18,000 small to medium eCommerce sites, he found, “30.5% of all traffic was coming from organic searches on Google, Bing, Yahoo, and other search engines. There is a constant debate going on regarding the relevance of SEO for online businesses, but 30% is significant, so it still needs to be a focus for any small online business owner.” To illustrate how that traffic translates into dollars, first we need to deterrmine average eCommerce conversion rates and order values. Then, we can gather a more tangible understanding of the value of SEO for small, medium, and large eCommerce sites.
At the end of its third year, the average ecommerce company generates $1.1M in revenue per month, according to research from business intelligence company RJMetrics. But the most successful ecommerce stores have a different story. “After three years, companies in the top quartile have almost 4x the number of monthly orders, resulting in 279% higher number of all-time orders,” RJMetrics writes in its 2015 Ecommerce Growth Benchmark Report. Unsurprisingly, these breakout stars have both an impressive start and a consistently strong growth trajectory. “By month six in business, top performing ecommerce companies have separated from the pack, reaching a monthly revenue over $600k, 329% higher than everyone else.”
At first glance, data can be deceiving. High-level overviews often hide underlying issues that secretly stymie growth. Among Fortune 500 companies, Teradata’s Andy Johnson reports that only 15% use big data analytics to learn more than the ‘known-knowns.’ That leaves the remaining 85% at a disadvantage because those companies happily settle for surface-level data which rarely reveal actionable insights. To consistently grow and develop a competitive advantage, companies must take a data-driven approach to business strategy and marketing.
Video is taking the world by storm: Cisco predicts that “[global] consumer internet video traffic will be 80 percent of all consumer Internet traffic in 2019, up from 64 percent in 2014.” Businesses that have not yet invested in video need to start now to increase brand awareness and engage consumers.