e-Commerce Success – the Shocking Truth
Estimated reading time: 6 minutes
In order to get the ball rolling on e-commerce success, in the epic words of Eminem
Let’s get down to business,
I don’t got no time to play around, what is this?
Must be a circus in town,
Let’s shut the *** down on these clowns
Can I get a witness?”
I’m sharing this mind-blowing reason for which your eShop’s still average. Or why most Romanian eShops are still average, for that matter. Hopefully, my statement will not be regarded as offensive, but constructive and my epiphany has more to do with perspective and adaptation. It’s that crucial viewpoint. The pair of glasses we put on to see things in a completely different light.
e-commerce questions that keep me up at night
- Think Medium and WordPress. One’s successful, one’s been gunned down. Why?
- Think Instagram. Do you remember Hipstamatic, its predecessor? My thoughts, exactly.
- Think YouTube and Vimeo. How do they both coexist? No, I don’t think it’s merely a coincidence.
- Now think your eShop and EvoMag. Or eMag for that matter. Two of Alexa’s Top 10 Romanian eShops. Unless you own EvoMag or eMag (and I do doubt that either Mihai Patrascu or Iulian Stanciu read my articles), what makes the differences between your shop and the major leagues?
- Focus on the relationships people built on social media, instead of individuals
- Gather data from customers and base decisions on informational patterns rather than use information to optimize internal processes
- Advance from tools based technologies to integrative software infrastructures
- You’re not Platform Thinking. YET. That’s the epic reason why your eShop hasn’t had its breakthrough.
- You’re thinking how to control your resources instead of how to generate them
- You’re thinking in terms of optimizing your management processes instead of how to manage your relationships, partnerships, etc.
- You’re still focused on customer value instead of having the entire ecosystem in view.
- Data is the new currency we’re trading in. Not money, data. And, to be more specific:
- AI leverages algorithms to make logic based decisions
- Machine Learning leverages data to make KPI based decisions
- Deep Learning leverages learning itself to make Long Term Predictions
- Human Resources Management becomes Community Management
- Your old Sales Funnel becomes the new User Journey
- Real time customization is the new Market Research, etc.
Well, as I mentioned before, it’s a matter of mindset.
A tale of two business models
Once upon a time, humankind was heading towards globalization. Paint that as your broader context. A couple of decades ago, way before omnichannel and optimization became a thing, globalization and economic integration were THE buzzwords. They stood high and strong as landmarks for all our efforts. The strategy to get there involved an easy and free trade. So, we began creating the premises for that.
The 3D business model
Businesses are built on 3 main strategic pillars: people, information, and technology. And in different historical times, progress happens in all 3. Harmonically or not.
Anyhow, at first, heading towards globalization, everything was going smoothly and naturally. Businesses’ growth and over border expansion were instinctive, consistent, somewhat uniform (in wider areas such as economic unions). But, most of all, it seemed sustainable.
The 2008 financial crisis, though, had other plans. It speeded things up because of fast adaptation – not furious, though, just Houdini-fast – was key to surviving. Its main characteristic was unpredictability. Though the signs were there, we couldn’t see it. So, we became obsessed with speed and predicting the future, instead.
Thus, the new business world order would:
The business models we’re building today (should) have a tendency towards being dynamic. Indeed, we’ve shifted from static to dynamic. From individual to context or ecosystem. From Pipeline to Platform Thinking. [Tweet this, yes!]
Your eShop’s business model
Well, if your eShop didn’t reach its well-deserved e-commerce success till now, you’re most probably still keen on pipeline management and the individuality of that business model.
A change in your root perspective from Pipeline thinking to Platform thinking means a new locus of control. You don’t make decisions based mainly on inner organizational performance, but based on outlier interactions with your customers.
According to the Platform Manifesto – the 16 principles of Digital Transformation, here’s how it goes:
The formula to e-commerce success
Think Medium and WordPress. One’s successful, one’s been gunned down. Why?
Data: Medium manages user data and feeds articles based on your interests and earlier reads. WordPress doesn’t.
Networks: Medium leverages networks through publications, WordPress doesn’t.
Technological Infrastructure: Medium has a very simple architecture, whereas WordPress is just about blog structure and functionalities.
Think Instagram. Do you remember Hipstamatic, its predecessor? My thoughts, exactly.
Data & Networks: Instagram is about socially sharing pictures. And it uses your network information to feed pictures and stories from your most viewed friends.
Technological Infrastructure: Hipstamatic was only about infrastructure. The application would allow you to take pictures and add filters, basically, all features Instagram offers, as well. Only minus the network and feed.
Think YouTube and Vimeo. How do they both coexist? No, I don’t think it’s merely a coincidence.
Data: The YouTube feed is driven by user preferences and past behavior.
Networks: Both applications have strong communities, only with a different orientation. YouTube focuses more on video consumption and users post just about anything; whereas, on Vimeo, users can only post videos they’ve made themselves or closely participated in making. So, the latter is dedicated to video creators. YouTube encourages dialogue and opinion based engagement. Vimeo, on the other hand, fosters intimacy. User videos are harder to find unless published.
Technological Infrastructure: Both made sure they delivered a strong and stable infrastructure for quality videos. Vimeo more than YouTube to be honest.
All four – Medium, Instagram, YouTube, and Vimeo have platform-based business models. Apps that didn’t make it are the ones whose model is still static and doesn’t leverage the three dimensions: networks, data and technological infrastructure.
In terms of eShops, considering eMag from the 3D perspective of networks, data and technological infrastructure, we’ll notice that it adopted platform thinking, as well. What seemed to have especially worked for the Romanian giant is real-time content customization and UGC (User Generated Content).
eMag does real-time content customization through eMail Marketing, offers (that they’ve recently positioned immediately after product presentation) and their suggestions feed. On the other side, UGC is heavily pondering their network building.
In conclusion, you’ve got 4 examples of what you need to do and how you need to shape your eShop to finally reach e-commerce success.
Basically, to increase ROI, you want to improve UX, increase processes efficiency and make sure you don’t waste anything on the way to e-commerce success.
Shift from individual customer focus to network focus. Concentrate efforts on building a tribe, a group of enthusiasts for your products or services. You can do that through UGC – comments, niche contests on Social Media, etc.
Shift your focus from static KPIs (such as the number of visitors) to tracking and determining informational patterns. Use Web Personalization tools, such as Heat Maps, A/B Testing, and Surveys to do that.
Another step which will get you closer to e-commerce success is choosing an easily scalable eCommerce platform – such as Magento. 😉 Or any other platform that suits your specific needs.
There you have it – Change your thinking scale to finally move those figures up. 🙂 It’s a new world out there. After all, they call it digital REVOLUTION. Old business models can only serve as inspiration now.