For years various internet media news services have been telling us online shopping will dominate all retail sales soon. That day has come: A Forrester reports (Forrester research : US online retail sales, 2008-2013) that by next year close to $230 billion worth of stuff will be sold through 2013 in US alone (not including travel, auto).
In Asia, especially the growing India Market, it’s growing rapidly, in just last three years close to 360 online retailers have sprouted up with literally billions of new customers. By comparison, there are almost half a million ecommerce stores in the US. Another research points out that 81% of internet users research products online. This research further influences 40% of offline sales. So as such e-commerce is going to be an important part any retail strategy.
1. Tracking customer life cycle value
While low cost of setting up ecommerce stores, lowers the capital required to start an ecommerce stores. It also lowers the barrier to entry, meaning there can be many retailers fighting for the same set of customers. As such cost of customer acquisition online remains quite high. In Indian scenario, this gets pegged around btw 750-1200 INR. So if you have online store that is not able to pare this cost into atleast 15 transactions from the same customer than you are actually blowing money that is not going to come back. So its critical to track your per customer acquisition cost, operation costs and also retaining cost. And see which one is critical to your category and focus on making sure that you have a way to track and drive life cycle value higher. It takes time to build it, but if you are focused on it, you will arrive there.
2. Build and focus on core value proposition
There are great stories on how great entrepreneurs are able to build scale and value while focusing on their core value proposition. Take a look at how Cableorganizer .com succeeded and built a business worth $16 mn, completely bootstrapped. So there is clearly a future even in not trying to be Amazon. In-fact there can be only one Amazon, but there will be half a million others, who will be building viable businesses focusing on their core value proposition. There is a reason why a customer remembers your site and visits it often, don’t destroy that reason by adding too many “me too” categories. Always remember, the biggest cost in ecommerce is not marketing or customer service, but inventory.
From a consumer’s perspective, it’s even more compelling, he can shop from anywhere, anytime and store timings don’t matter. Further, stuff like 30 day return policy and payment on delivery are just sweetening the deal.
But building a sustainable ecommerce business requires more than just enthusiastic VCs or customers. It’s about paying close attention to how business needs to be run.
And nothing helps sustain an internet sales company like SalesWarp Storefront Management System. SalesWarp offers tiered platform levels to cover everything from a single online store to large multi-channel retailers like those financed by Forerunner Ventures. Compare SalesWarp Platform Levels and find the SalesWarp System that’s right for your company.