The e-commerce strategy is crucial in order to be profitable with an online shop in the long term. It includes the business model , unique selling propositions and success factors that bring companies to the forefront of the competition. A successful ecommerce marketing strategies is based on customers and competitors and implements the success factors of digitization.
The E-Commerce Institute supports you in developing your strategy for success and shows ways to implement and increase profitability in e-commerce.
The basic strategy: the e-commerce code
In the dynamics of e-commerce, a sustainable strategy depends on recognizing opportunities at an early stage and implementing them as early as possible. This creates competitive advantages and advantages that increase the profitability of the e-commerce company. The basis for every discovery of opportunities is the observation of structural changes in the markets and in relevant sectors and areas of the economy. In e-commerce, the diffusion of technologies and the innovative and marketing power of companies is a decisive driver for further growth in ecommerce business strategy. However, the growth phase is not linear, the dynamics of parallel processes can be very different.
The e-commerce basic strategy starts with the empirically recognizable trends in customer behavior and competitors and aligns the four key factors in e-commerce with them. These strategic success factors derived in the E-Commerce Code determine the success of many leading e-commerce companies, so they offer a strategic benchmark for the entire industry.
The trends – customer behavior and competition
Against the background of the large number and variety of trends, a focus and strict orientation towards customer behavior is crucial for a successful e-commerce strategy. It was only changing customer behavior that made e-commerce a sales channel worth mentioning. As the company’s reach increases, there is potentially greater access to customers on the one hand and increased competition on the other. Due to the spread of the Internet and its central mechanisms, competition more intense for all companies than in the stationary, non-networked economy. Competition takes place on two levels: competition for access to the customer and competition for the customer’s purchasing decision. A sufficient online marketing strategy and competitive strategy is central to the competition for access, while the competition for the purchase decision is about products, prices, services as well as usability and user experience (UX), which can become success factors for your ecommerce strategies.
The role of innovation
Last but not least, innovation is an essential determining factor for the selection of a suitable e-commerce strategy. Even if customer behavior should be at the beginning of the strategy process, technology and innovation are the main drivers of change in connection with e-commerce. Customers react to technological changes, accept them in the form of new devices and applications, or ignore them. It is therefore important in the e-commerce strategy to observe technological trends, ideally to anticipate them and, if there is a sufficient chance of acceptance of a technology, to use it.
The customer in the center – customer centricity
The game changer in the digital age is the transparency of customer behavior. At the same time, customers can choose from an ever-increasing number of offers, read reviews and submit reviews themselves. At the same time, competitive pressure increases online marketing costs. As a strategic response to this, more and more companies are switching to a customer-centric strategy with the aim of increasing customer loyalty. Long-term customer loyalty helps to realize marketing costs and to understand and solve customer needs. Ultimately, the core of the Amazon strategy is customer loyalty, so that Amazon, as the leading e-commerce company, sets the benchmark.
Growth and platforms
Digital systems and platforms are at the heart of e-commerce operations. But logistics also enable economies of scale due to falling average costs. In this respect, an e-commerce strategy must always include a growth strategy. This is the only way that innovations, digital platforms and logistics systems can be financed and used efficiently. Online marketing is of central importance in the growth strategy.
Data Driven Marketing
The immediate availability of usage data makes analysis and especially web analysis a crucial factor for a successful e-commerce company. Data-driven marketing means that marketing decisions in particular, but also product and system decisions, should be made based on data. Data-driven marketing costs enable marketing costs to be broken down precisely and thus significantly increase marketing efficiency.
Due to its high relevance and prevalence among the leading e-commerce companies, e-commerce marketing is decisive for every company that is active in e-commerce. A differentiation strategy is also important for the development of unique selling propositions.
Ecommerce Differentiation Strategy
When defining e commerce strategy plan, a company can choose from classic strategy types that are customized for their own company.
Price leadership
The basic strategy offers the basis for efficiency advantages of an e-commerce company compared to its competitors via economies of scale and the use of technology, but also via data-driven marketing. This applies in particular to price leadership, since this requires cost leadership at all levels of the supply chain. The price leader strategy in e-commerce is characterized by offensive growth and high initial losses in order to achieve long-term dominance. Therefore, securing the financing of any initial losses is an essential task of this e-commerce strategy. If it succeeds, the price leader can achieve high market shares due to its dominance.
Quality leadership
Quality leadership, on the other hand, means achieving high market shares with exclusive and particularly attractive products. Consequently, ensuring access to these products is key. This strategy is ideal for manufacturers. The fact that customers are more willing to pay for special quality is also positive. Consequently, a central point of the quality leader strategy is to bind customers to the company in the long term. An important KPI is the customer lifetime value .
Marketplace or network strategy
The marketplace or network strategy places the assortment in the focus of a growing platform or marketplace. A large assortment is one of the most important motives for customers to shop online. If the customers are still satisfied, they remain loyal to a marketplace. This in turn is attractive for retailers who offer their goods on the marketplace, so that new customer segments can be opened up. A growth of the platform on the customer and dealer side causes the average costs to fall, so that the prices can also be reduced. More customers are reached. As you can easily see, Amazon in particular is pursuing this e-commerce strategy.
Niche or Blue Ocean strategy
A subset of the quality leader strategy is a niche or blue ocean strategy. In both cases, a company focuses on product differentiation that leads to a smaller market segment. Marketing via the Internet allows the niche product to become a sufficient market due to the better accessibility of scattered target groups. In a blue ocean strategy, the niche product is first created by differentiating an existing product. Product properties and marketing focuses are being redesigned contrary to industry practice, resulting in a new market segment. However, the new product and its deviating, atypical properties must first be communicated to potential customers, which makes the Blue Ocean strategy expensive and risky.
Internationalization strategy
The growth-oriented price strategy in particular will soon lead to market development in the home market reaching a saturation point. Further growth is then only possible in foreign markets, so that an internationalization strategy makes sense for market leaders in e-commerce. Since internationalization is very complex, this strategy in particular must be very well prepared and professionally implemented. The internationalization strategy is fundamentally interesting, but also complex, especially in the European internal market, which brings together many customers from different cultures and with different languages.
Conclusion
In the last several years, there have been significant changes in the e-commerce industry. An international epidemic has contributed to the phenomenal expansion of online commerce. Will your online retail marketing tactics remain competitive?
The 12 tactics presented in this manual highlight a range of alternatives, from those that are fast and free to others that will cost thousands of dollars and take months to implement. Your preferred marketing strategy should include a variety of measures that can precisely target your target market.
