The eCommerce Issue
Description:
With annual sales topping more than a trillion dollars, eCommerce is bigger than ever. It’s also more competitive. In this issue, we’ll explore ways to give your brand an edge, so you not only attract online and mobile shoppers, but turn them into buyers, too.

The eCommerce Issue

Fall 2013

The Basics of Successful eCommerce Operations

by: Brennan Bennett
The Basics of Successful Ecommerce

In the U.S. alone, eCommerce sales are encroaching on $300B. User experience means everything if you plan on tapping into that revenue stream. Sales funnels need to be to the point with as few distractions as possible, but at the same time, merchants need to connect with the consumer to optimize retention.
The US ecommerce market from 2009-15

 
Al Ries, Chairman of the Consulting Firm of Ries and Ries in Atlanta, summarized commerce:

"Most customers don't want to waste time picking out absolutely the best and cheapest product on the market. They just want to make a good choice."

I can think of a handful of professional bargain shoppers that would fiercely disagree, but I think it’s true (mostly because I am a very impatient shopper). The easiest way to turn people like me into brand advocates is sound operations. The easier the experience, the happier I am at checkout, the more money I’ll spend in the long run.

The philosophy of eCommerce is both its greatest strength and its greatest weakness in regards to operations. This viewpoint revels in the perception that a digital business is cheaper to start and easier to run than tangible stores. The short answer is a hesitant yes, but the long answer is a rather long inference.

THINKING

Good ideas may not necessarily be operationally feasible. Take a step back and take a look at the big picture.

PLANNING

Understand that the success of sound eCommerce operations is directly attributed to market research blended with the ability to fundamentally grasp digital marketing. The objective is to automate both with the tools you need to streamline inventory flow, establish distribution networks, manage accounting, run customer service and operate the platform of your choice to max capacity. These tools are the five steel cogs of any eCommerce operation that all other cogs wish they could be.

Breaking down the steel cogs layer by layer, you will come to realize that support operations can be as easy or as complex as you choose to make it. The trick is automation. There are thousands of CRMs, accounting tools and whatnot that can enhance an eCom startup, but what makes the elusive "4 hour work week" remotely possible is digital mechanics a.k.a. infrastructure.

INVENTORY FLOW OPERATIONS

Unless you make your own widgets, drop shipping is more or less a key element to inventory flow, but not always to consumer demand. Meaning, choose your merchants who you want to sell first, then your drop shipper second. The truly genuine ones have exclusive partnerships with top tier merchants who, like all manufactures, are always looking for ways to offload product to make room for new stuff. Keep in mind that it is the drop shipper’s responsibility to acquire wholesome business partnerships with eCommerce entrepreneurs who then drive sales. Use common sense, be wary of product sources from shady parts of the world, but more importantly, look up consumer reviews because the reputable ones are never free.

Supplier Recommendations: Doba.com, Simplx.com

MARKETING OPERATIONS

Having a sound digital marketing operation will only get you on par these days. You need to find your edge, sniff out your market segment and maintain a fresh brand image with a colorful brand voice. You must take advantage of every resource, from paid search (including product listing ads and PPC), SEM and email capture/list building to forums and networking groups. You can analyze your web traffic all day and build out the world’s most sophisticated remarketing program, but only after you get some traffic.

Remember, comprehensive marketing operations have a lot to do with automation, but you should have a good understanding of the technical objectives of each campaign. You don’t have to be an expert in PPC, but if you hire a PPC manager to automate your PPC operations, be sure you understand fundamentals like conversion metrics and product listing ads. Your budget will thank you later when it has doubled in size instead of dissipated because you didn’t know how to gauge whether or not your PPC manager was doing an effective job for the cost of service.

What is a successful marketing operation without brand image? Enter digital real estate, which can be optimized in many ways. Owning a niche specific domain is ideal, but not impossible to work around. For example, what comes to mind with the word "Woot?" Unless you’ve shopped on Woot.com (specifically deals.woot.com), which is a very profitable coupon site, you would probably not think anything of it. That’s the power of advertising. The market is so saturated now that an intelligent sense of humor is the best selling point in a domain name, which is the tip of the spear in regards to your marketing operations. Work your marketing strategy around your content and networking skills and people will notice.

Marketing Research Recommendations: InternetRetailer.com, VentureBeat.com

PLATFORM OPERATIONS

This is where things can get interesting. With the proliferation of SaaS suites in the almighty cloud, eCom platforms have made huge strides in incorporating much-needed operations management and intelligence tools all in one spot.

Platform Recommendations: Magento, WooCommerce, Zencart
Ecommerce market pie graph





 

ACCOUNTING OPERATIONS

Yes, accounting. The whole point of this exercise in life is to make money, right? Well, if you want to stack it and not burn it, you need to take accounting seriously.

Most notable web based accounting software offers automation solutions via APIs that integrate with your shopping cart. Look for options that take advantage of automated remarketing services that enhance the customer service experience. For example, automated emails from an accounting CRM that thank a customer for a purchase or email customers about products that match their buying habits are pretty much liquid gold when your primary focus is retention.

Accounting CRM Recommendations: QuickBooks Online, PayPal Payflow Pro

CUSTOMER SERVICE

Be available. When a customer has a question about a product or wants to be updated on shipping, you have to be there with the correct information. Sound customer service operations are integrated parts of any marketing strategy.
  • Reward your loyal customers or your social fan base with exclusive deals.
  • Be sure to have a plan in place like a deep discount coupon in case you have to put out any fires.
  • The more transparent the customer service, such as onsite forums, the more likely customers are going to trust your brand.
Successful eCommerce operations are not built overnight. Unfortunately, some brands learn this the hard way and sacrifice their reputation in the process. If you need guidance, focus on your own experience as a customer. If you have to talk to five people before you get to the right customer service rep, take note. If you can check out your purchase in three clicks, take note.

Overall, keep it simple; stay plugged into the industry. Operational tools are only as good as the builders who use them.