Are you focused on the right areas to generate the best returns for your online retail business? Following his popular presentation at the Online Retailer Conference, Tangent One’s Greg Jackson delivers his five key insights (plus a bonus extra) into what really matters most in e-commerce.
1. Shipping Really, Really Matters
While usability, brand, quality and customer service are factors all online retailers must consider, 34% of online shoppers cited free shipping as the most important factor in their last purchasing decision. Let’s put it out there for all to see: the biggest reason for shopping cart abandonment is expensive shipping.
Multichannel retailers shouldn’t be scared to undercut bricks and mortar stores or squander precious margin chasing them. Replicating in store offers online is a waste of time, yet a small price differential is enough to divert customers.
So run a web business. Free shipping and a few cents cheaper sells more.
Earn faster, learn faster, reduce risk of failure.
“The duration of an e-business project is the most critical success factor and projects exceed nine months do so at their own peril.” – Critical Success Factors in eBusiness Project Management
Few projects should take more than three months. If a fix will take a week’s worth of man hours, never spend a month on it. Work smarter and do it in three days.
Angus & Robertson needed a comprehensive overhaul of their online store. The site launched with 300,000 worth of products, building to over two million in three months. More product was turned over in a summer month than the previous system had at Christmas. Angus & Robertson didn’t wait for millions of titles. They started making money right away with what they had.
A big mistake online retailers make is to exclude those who don’t respond, in order to reduce costs. Instead, online retailers need to target areas of interest to increase relevance. If a customer isn’t opening or clicking, send them something else.
Target rather than exclude. Listen to your customers. Not clicking doesn’t mean they’re not interested. Test, refine and send people what they want. You will know: they start clicking, then buying.
4. Avoid the IT Death March
In short, the IT Death March is “a technology project with infinitely escalating costs and deadlines.” You can’t complete an entire project with people working on spec.
The discovered 20% makes the site useful to your business – don’t underestimate it – but planning is essential.
“50% of projects using an in-house methodology turned out successfully as compared to less than 10% of the projects using PMBOK or PRINCE2.” – Critical Success Factors in eBusiness Project Management
Keep it simple. Start making money. Add bells and whistles later.
5. Don’t get distracted
Beware the Chairman’s Wife Syndrome. There will always be someone in the CEO or Chairman’s ear, saying that certain gimmicks or tips should be featured on site – even if these features are really just big distractions or add no value. Trust the web team. Don’t be distracted by uninformed outsiders whose suggestions are based on subjective opinion rather than fact.
And don’t be distracted by suppliers offering every kind of widget, gimmick and service. When bombarded by these ‘opportunities’, it’s hard to decide which are worthwhile, and the decision process can be tough.
Be careful of a new technology. See it working for competitors first. If nobody else is using it, there may be a very good reason. Pioneering is expensive – don’t waste time and money being the guinea pig for others.
Be a retailer – it’s much more profitable.
And now for the bonus point…
6. Love Offline Marketing
Above the line marketing does wonders for your online business. Get your stores working for you and put your URL everywhere…it’s free.
- Price is paramount. Undercut your competitors.
- Build fast, earn, learn and then enhance.
- Email your customers. If they don’t respond, send something more interesting.
- A simple initial project avoids the IT Death March – and gets money in the bank fast.
- Beware the Chairman’s wife (and vendors of digital snake oil).
- Your stores and above-the-line advertising are your friends.