Digital Transformation

The basic facts of e-commerce - 12 essentials for online trading

By Hayden Sutherland |

December 11, 2012 | 6 min read

In the first instalment of his new column, e-commerce expert Hayden Sutherland lays out 12 facts you should know if you're planning on developing an e-commerce website.

1. Core proposition

Make sure you know more than just ‘what’ you are selling, but ‘why’.

Hayden Sutherland delivers grownup e-commerce advice

(Examples such as “just to make money” or “because that what we are good at” doesn’t really cut it). This should map your proposition back to your brand promise… Remember, you’re not just selling something such as a mobile phone; you’re there to help users communicate better and more effectively.

2. Products, price and profit

Understand not just your product catalogue (structure, naming, etc.) and the retail prices you want to sell at… but also what prices you could mark each product down to during a sale. Also, knowing which products have the highest margin will also give you some idea of how to merchandise and promote them.

3. Customer acquisition

Understand how you are realistically going to get customers to your site. Whenever anyone tells me “oh, we’ll just let people find us” or something similar, I tell them the Internet is not a Field of Dreams (If you build it, they DON’T come). You must have your approach to marketing: acquisition AND retention nailed before you even start.

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4. Fulfilment

Assuming you have physical product to sell… Just how are you going to store and then pick/pack/dispatch your products off to your customers? Selecting the right fulfilment partner is the key factor in providing an effective delivery service. But also make sure you have a process for swiftly handling returned goods (and possibly handing back the money).

5. Measurement

Do you know what you’ll even measure before you start? Have you got your Key Performance Indicators (KPIs) agreed in advance and are you aware who needs to get access to them? Most website managers know that an analytics package can capture clicks and further detailed usage across the site… but less of them actually ensure their analytics are correctly set up in the first place.

6. User Experience

Is your site easy to use? Does it fit the user expectations of an e-commerce site? Does it help visitors complete their goals? To start with you should understand who your typical customers are and then build the best possible experience for them.

Not sure if you’ve created a site that works exactly as planned? Then test, test and test again to make sure. The tools to do this aren’t expensive these days and you don’t need hundreds of tests to find the main issues.

7. Technology

Yes, sure you need to look at what software your site use. However it’s not just about the technology platform your content and catalogue sits on, it’s the devices your customers use to browse and buy. I also see a lot of companies at the early stages of creating an e-commerce site dive into the ‘nuts & bolts’ of specific pieces of functionality, when actually they need to worry about the size, scale and supportability of their online operation.

8. Seasonality

Don’t just plan to sell the same stuff all year round and at the same average volumes. Understand that customer needs vary over time and even pretty regular products can have peaks & troughs in both demand and supply.

9. Content

Just because you’re selling products doesn’t mean you shouldn’t produce great content and optimise it as you go. Some of the biggest e-commerce sites use content marketing techniques to build traffic & engagement and to drive users through to the right products.

10. Customer Service

The biggest web trading myth is that once you’ve moved to an online retailing model you can then ignore your other customer service channels. Well unfortunately you can’t keep all users happy with just a simple FAQ (frequently asked questions) page. Often the opposite is true though and just because you have a ‘low touch’ approach online, your prospects might still need the ‘high touch’ from a human being to convert or complain!

11. Manage your inventory

There is no point trying to selling stuff online that you don’t have, whether this be a concert ticket, a fridge freezer or a child’s toy…you just end up disappointing your customers. But on the other hand it’s inefficient just filling a warehouse full of products for months or to have seats empty for an event. Learn what quickly shifts and quickly shift what doesn’t.

12. Enjoy it!

According to most available research, the global e-commerce market is due to increase over the next 3 to 5 years. For some just venturing out it is early days, but luckily there are a lot of good examples of e-commerce best practice in existence to learn from.

E-commerce image via Shutterstock

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