Why do online businesses need to define their e-commerce strategies?
The e-commerce landscape is fiercely competitive, with approximately 12 million e-commerce businesses worldwide and an estimated market size of $16.6 trillion USD in 2022. The proportion of e-commerce sales within the wider retail landscape is also growing, having made up 17.8% of all 2020 sales and 21% in 2022, and forecasted to reach 24.5% in 2025.
To win a cut of this increasingly large market, online retailers, brands, marketplaces and other players must define and continually refine their e-commerce strategies. Doing this provides a clear roadmap, guiding businesses on which tactics to implement for sales growth, customer acquisition and retention, while also ensuring that all business operations align with the company's overarching goals.
Well-defined e-commerce strategies translate into informed decision-making, better allocation of resources, and ultimately, increased profitability.
E-commerce strategies to grow your customer base and revenue
Every e-commerce business is unique and must find the right set of strategies to make more sales online. Because the term “e-commerce strategies” is extremely broad, we’ve broken it down into three of the big areas every business will need to think through: product, marketing and sales strategies.
E-commerce product strategies
A comprehensive e-commerce strategy begins with product development. It is crucial to design products with features that align with customer needs and aim to meet them. Product development should be data-driven, intentional and must consider the full product life cycle.
- Identify opportunities: Conduct thorough market research to identify popular trends, customer preferences and gaps in the market. What space will your product fill? How will it be differentiated from competing products?
- Develop new products: Choose products that align with your target audience's needs and offer a unique value proposition. Will you make product range updates to the existing line or create new ones? Consider focusing on products that have high demand and are not oversaturated in the market.
- Optimise manufacturing: An optimised supply chain is crucial to succeed in e-commerce. How will your product(s) get manufactured? Where will the materials come from? How will you keep the process cost-efficient from beginning to end?
- Bundle products: Many e-commerce businesses choose to bundle related products together at a discounted price. Product bundling encourages customers to buy multiple items at once, resulting in higher sales volumes and increased revenue. This is an e-commerce strategy that falls under the product, marketing and sales categories. One example is the gift boxes offered by Lush, which bundle together multiple products to simplify gift buying for customers.
- Differentiate between long-term and short-term products: For each new product launch, the company should have some idea if this product is meant to be a long-term part of the product line or a short-term, seasonal or exclusive offer to increase sales and attract new customers. Sometimes, a short-term product might be so successful that the seller will choose to build it into the long-term product line.
Implementing these strategies can help e-commerce businesses attract new customers, retain existing ones and ultimately grow their customer base and revenue.
E-commerce marketing strategies
E-commerce marketing is a huge topic for online businesses, as the strategies you choose play such a pivotal role in finding new customers and increasing sales. That's why this is the largest section of this guide. Below, we'll cover eight key e-commerce marketing strategies to consider for your business:
1) Utilise customer segmentation
Customer segmentation is a powerful marketing tool that categorises the customer base into smaller groups based on criteria like geographical location, age, purchase history or behavioural patterns. Businesses can then personalise and target marketing messages that will resonate with the unique needs and preferences of each segment.
Segmentation is all about understanding who your customers really are, how they behave or think, what they want in a product and their willingness to pay. It's effective, too: 77% of marketing ROI comes from campaigns that are segmented, targeted and/or triggered.
Let's look at the example of promotional emails, which can be tailored to reflect the purchase history and preferences of each segment, thereby increasing the chances of conversion. Perhaps you send a follow-up email to the segment of customers that have abandoned their cart:
Or you send an email based on a characteristic you know about the segment, like their age or current occupation or education status:
Segmentation also allows businesses to identify and focus on high-value segments, like the customers who are likely to bring in the most revenue. This personalised approach not only improves customer engagement and loyalty but also enhances the overall customer experience, leading to improved sales and profitability.
2) Create high-quality product listings
Your product listing is the only place where you have total control over what the customer sees, so it's crucial to take advantage of the opportunity to attract new potential buyers. Allocate the time and resources necessary to develop detailed and accurate product listings with engaging copy, high-quality images and videos if possible.
Selling in an international market that speaks a different language? What will your strategy be to handle this? It's recommended to have a fluent or native speaker do the translation and editing, that way product descriptions don't sound like they came from Google Translate.
3) Use Dynamic Pricing to adjust product prices in real time
Pricing is one of the 7 P’s of marketing and a key piece of the marketing mix, especially in e-commerce when price comparison is easy for shoppers to do. Every company must define its own pricing strategies, and many e-commerce sellers will use some form of dynamic pricing, an approach that involves continuously adjusting prices in real time to boost sales and optimise profit margins.
Utilising dynamic pricing can be impactful in any vertical, but is especially useful for highly competitive markets or for any business that wants to base its prices on competitors, whether that means higher, lower, or equal.
Omnia Retail is Europe’s number-one solution for price monitoring and optimisation, making it easy to implement and execute a successful dynamic pricing strategy based on your specific rules. Learn more here.
4) Reach more potential customers with Search Engine Optimisation (SEO)
Prioritising SEO is a no-brainer for any business with a website, but it's definitely not simple, especially as AI will continue to have outsized impacts on web content and the Google algorithm.
In the meantime, however, every e-commerce business should set an SEO strategy and dedicate the necessary resources to succeed. This means:
- Optimising your website and product pages for search engines to improve your online visibility
- Conducting keyword research to target relevant search terms used by your potential customers
- Building content that is SEO-optimised, relevant to the target audience and actually helpful
Achieving high-ranking positions in search engine results can drive organic traffic and increase the chances of converting visitors into customers.
5) Optimise your email marketing
Email marketing has been around for a long time, but continues to be an effective way of engaging with customers and building long-term relationships. Build and maintain an email list of interested customers and potential leads, then use email marketing campaigns to share product updates, special offers and personalised recommendations. As mentioned above, email marketing is a great area to make use of customer segmentation.
To grow an audience and generate ROI from email marketing, make sure that your emails have well-crafted subject lines, compelling copy and content, optimised delivery times, targeted and relevant messaging and mobile-optimised design.
6) Use pay-per-click (PPC) advertising
In the current market, PPC is almost a required channel for e-commerce businesses to drive traffic and sales, with 96% of e-commerce brands spending money on PPC advertising. When a proper strategy is used, PPC can get you in front of customers you haven’t reached organically and drive sales even if your SEO is taking a while to get off the ground.
Developing a winning PPC strategy will require you to set a budget, choose your target keywords, optimise product and landing pages to convert visitors, launch campaigns and optimise them over time. Hiring a PPC expert is helpful if no one at your business has experience with this type of advertising.
7) Run review campaigns
Ratings and reviews play a significant role in e-commerce sales. One US survey found that 99.9% of consumers read reviews at least some of the time when they shop online. Running campaigns that follow up with customers after a purchase and ask them to leave a review can build up the number of reviews on marketplaces or your online store, making it easier for potential customers to do their research.
Pay attention also to the reviews as they are posted. Positive reviews and other user-generated content could be used for future marketing, with permission. Negative reviews and other types of online complaints must be handled in a personalised way to show customers that you care. Over time, this can increase conversion rates and build a more loyal customer base.
8) Utilise content, social media and influencer marketing
These three types of marketing are grouped together as they don’t exist in silos, but are often woven together. If you choose to use some or all of these marketing types in your e-commerce strategy, think through questions such as:
- Content marketing: What kind of content does your target audience want to see? Which pain points and interests can you address? Will you use blog posts, articles, videos, infographics, or other content to showcase your expertise and build brand authority?
- Social media marketing: How can you use your social media presence to research a broader audience? Which platforms will you use? What will be your posting schedule? Will you share product updates, promotions, customer stories, or user-generated content (UGC)?
- Influencer marketing: Which influencers and industry experts have a significant following in your niche? How will you partner with them to promote your products to their audience? How will you ensure that the influencers you choose have values that align with your brand? How will you ensure authenticity and credibility?
Influencer marketing example on Instagram
E-commerce sales strategies
Some strategies are really part of multiple categories, especially when it comes to marketing and sales. But because driving sales is ultimately the bottom line in e-commerce, we wanted to highlight a few key sales strategy decisions to place special focus on:
- Sales channels: One of the highest-impact decisions an e-commerce business will make is which sales channels to use. Brands, in particular, have countless options for where to sell products. Questions to think through: Will you have a D2C store? Partner with retailers? Sell on marketplaces? Are there any specific places you definitely won’t sell through?
- Cross-selling and upselling: Sellers can capitalise on every sale and offer complementary or upgraded products for the shopper to consider. This can increase Average Order Value (AOV) and help customers fulfil other needs or wants not met by the original product. Apparel brand Madewell, for example, offers complementary or matching items on the product page, making it easy for customers to add the extra item to their cart and create an outfit.
- Personalised product recommendations: Personalisation is the name of the game in e-commerce, with nearly three in four consumers (73%) expecting companies to understand their unique needs and expectations. Using segmentation and other individual data to offer custom product recommendations throughout the shopping process can help customers feel understood and lead to higher basket size and conversion.
- Strategic promotions and discounts: Sales and marketing can work together to build a defined promotional strategy. Is your business one that will offer discounts? Or are you a luxury brand that does not put products on sale? Every business is different; just make sure you define your strategy and continue to revisit it. When the e-commerce sales strategy does allow pricing changes, this isn’t something that can just be done as it happens; it's something that needs to be fully managed and set up with a tool to automate the monitoring of the market and the pricing calculation for the products. See how Omnia automates Dynamic Pricing here.
- Loyalty programs: Building loyalty offerings is another area for sales and marketing to work together. Rewarding returning customers is a great way to increase the number of buyers who repeat purchases along with word-of-mouth marketing.
How to choose the right e-commerce strategies for your business
There’s no one right way to operate an e-commerce business, and the strategy advice out there is seemingly endless. With so many questions to answer and decisions to make, where should you get started?
Omnia suggests beginning with the basics for these conversations. What are the values and mission of your business? Defining and revisiting these can help shape the objectives and KPIs you set, which will form the foundation on which your e-commerce strategies are built. Get crystal clear on what you want to achieve, who your target market is and how you are going to reach those customers. Finally, it’s best to set priorities for your action plan so no one gets overwhelmed by starting too many new goals and strategies at once.
Whatever set of strategies you choose, Omnia Retail can support your growth goals with seamless Dynamic Pricing automation powered by advanced Machine Learning and AI algorithms. As Europe’s number one pricing tool, you can trust your pricing blueprint in the hands of our experts.
Learn more about our revolutionary and intuitive approach to Dynamic Pricing here.
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