In my daily travels across the ecommerce universe I encounter many large traffic small etailers. These companies have benefited heavily from the fact that they set shop a long time ago, so they’ve built momentum that is paying dividends to this day. Ironically, many retailers with physical stores find it hard to compete against these cottage industries. But many of these etailers have been unable to leverage this strategic advantage in any meaningful way. The thinking seems to be something like this “I launched my site five years ago and in that time grew 200% a year, therefore only come to me with ideas if you can help me beat that trajectory.” Here is my opinion on this thinking “Dear sir, you are a moron and will soon be out of business.” What most of these etailers don’t factor in is that they’ve benefited from the explosive growth in ecommerce and the fact that the big boys have kept away (foolishly) for far too long. In such an environment even mediocre etailers do well. Two important events have developed in the last five years. One, better, bigger and more specialized companies have entered the market and two, customers have become way more sophisticated and have access to powerful peer to peer review networks (like Yelp!, RipOffReport, BBB.org, epinions.com, blogs etc). The other issue with these etailers is that they have the infomercial mentality. You remember those real estate commercials where ‘real customers’ walk to their mailboxes and pick checks from people they don’t know? Well, that’s what many of these etailers want too. And while they did enjoy that lifestyle for a while I’m sure those days are gone.
But all is not lost. These etailers still have one asset: thousands and thousands of monthly hits. I just hope the smart ones realize trends are pointing in the other direction but they have the ability to transform. So where should they start? Here are some of my suggestions:
1. Understand that the rules that made you money so far are now obsolete so engage with an outside expert and listen to their ideas. Be selective, be critical, but listen.
2. Look through your product mix. If you have over 100 products start eliminating products where you don’t have a clear strategic advantage. A store with 50 highly targeted products is way better than one with a random selection of 500.
3. Get off the new customer addiction and focus on keeping and deepening relationships with existing customers.
4. Have deep understanding of your immediate competition. If you sell Moby Wrap and so do 75 other etailers consider the market overcrowded and discover harder to find newer products. Think of yourself as a trend spotter, your job is to hunt the Internet and source products that match the needs/aspirations of your core audience.
5. Ask yourself, “why should someone buy from me?” Then ask that to your customers. Ideally both answers should be the same.
6. Most small etailers have superb indexing advantages and excellent content but the experience wrapping the site is poor at best. Have a design firm elevate your brand experience. Explain clearly what you want to achieve through the redesign. If your aim is to improve every metric take a six month vacation and come back with a list of top three ideas. Any more than three is too much.