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While every company knows they need an eCommerce strategy, few have taken the time to responsibly develop one specifically for their business. The key point is that a business is where it is today based on what it has done and how it did business in the past. This must be the basis for the incremental improvements an eCommerce strategy can provide.
There is a very basic premise that should be considered.
If your competition is doing eCommerce, then you must! If your competition is not, then you must!
It seems obvious but today eCommerce is not a fringe technology. It should be the basis, in one form or another, of the sell-side of most businesses.
The common solution seems to be to hire consultants and or a Digital Marketing Executive to create a plan. This is usually based on their previous knowledge in a prior (often unrelated) company or engagement without first, understanding the details of your specific business. Also, most defer to younger staff because “they know more about that technical stuff”. While all of the above can provide valuable input, it must constantly be “course-corrected” back to the reality of your specific business.
eCommerce is typically (and often wrongly) defined as taking online orders over the internet. And it usually focuses on an Amazon-like (B2C) model. Based, on personal use, this is often the paradigm that is thought to be appropriate for all businesses…of any kind.
Definitions:
B2C (Business to Consumer) eCommerce is generally targeted to “casual” user who accesses the site, buys an item, expects free freight, and pays the published price using a credit card. They may or may not ever return. A B2C site has one catalog that everyone accesses, and all get the same price.
Typical B2C usage:
B2B (Business to Business) is very different. B2B eCommerce is an extension of an existing relationship. The customer is known. They are in your customer master file. They have established terms and pricing policies and generally have an assigned sales representative. Access to the site is a privilege and credentials are supplied. A login is required for access. Knowing who the user is via their login credentials, a unique catalog can be presented, the customer’s special pricing can be displayed, and messaging can be targeted to that user.
Typical B2B usage:
Only after understanding the differences above, can you now begin to develop your eCommerce strategy.
At this point there are questions:
Who is your customer? (This is not always obvious. A customer is somebody who pays you for a product. If you sell to a distributor, then the distributor is your customer. The distributor’s customer, who buys your product, is an end-user.)
What makes sense for online ordering?
With the above understanding, you can now begin to formulate the strategy. While most (99%) think increasing sales is why you do eCommerce, there are many other factors which are not as obvious that could add significant (more) value:
Before you say you want to go B2C…
Assuming you are a manufacturer/distributor (B2B), and before you say you want to go B2C to end-users, you must step back and think very carefully and understand the cost and impact on your business. One must set aside the emotion and make a business case that supports a B2C initiative. There are many factors to consider:
If you have historically sold through distributors, going B2C makes you a competitor to your channel. You are selling products directly to an end-user bypassing your traditional customer (the distributor). How will they react to that? If your response is that the distributors discount and we will sell at list price, then why would anyone come to you and pay more money?
Have you discussed this with finance? Selling to end-customers might require sales tax reporting. Sales tax rules have changed significantly and the impact on finance could be significant.
If your business has been organized around selling pallets of product to distributors, are you able to efficiently sell a quantity of “one” to an end-customer? Are you ready and staffed to be able to react to customer service calls and product questions generally handled by the distributor?
Do you have a marketing plan and budget to support the project? Simply putting up a B2C site without the necessary SEO and marketing and simply waiting for orders, will not have a good chance for success.
B2C customers expect immediate shipment. Are the products you intend to sell using B2C consistently in stock? Are you aware that B2C exposes your business to the competition? They can see your pricing; they can place orders and test your customer service.
Have you figured out a freight policy? Unlike B2B, most B2C sites have free freight. Most B2C customers expect free freight.
The big question is… and taking emotion out of the equation… and looking at your current and future business… and the necessary budget to responsibly implement B2C… is there, in fact, a real ROI?
B2B eCommerce is often overlooked. In most manufacturers and distributors, taking orders by phone and fax is traditional. The businesses (and customers) are used to it. However, there are many benefits to extending (not replacing) your core business to an eCommerce model. Since you expect, on a personal level, to be able to check order and shipment status online, why shouldn’t you provide that to your customers? Also, why shouldn’t a customer be able to reprint and pay an invoice online rather than calling and asking for one? Process an RMA?
With any of these initiatives, there will be technological challenges. Most often the current website resource is asked to develop the eCommerce platform. In most cases, the effort is mostly focused on user experience (UX) and not integration to the business system. This usually results in reduced functionality (when the budget is exceeded) and a bad experience for the users. Proper and perpetually supported business system (ERP) integration is key to the success and benefits of the project.
In summary, and taking the above into account, there are many things to consider when developing a responsible eCommerce strategy. It is much more than increasing sales using online ordering and it may not be a B2C initiative. Look closely at your current business and see how to leverage this technology in your core business first and then see how it can be expanded.
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