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In theory anyone could list their book library on the web and become a widely successful online retailer - the next Amazon. Looking at the amount of e-commerce technology related vendors and solutions for everything from international payments to drop-shipping, packaging and re-marketing and conversion, which promise set-up and operations in minutes with easy and simplicity, the path to becoming the next Jeff Bezos has never been more straightforward and more within reach. Yet, in practice, creating and maintaining a successful e-commerce business or an e-commerce department within an existing established traditional retail corporate organisation is anything but easy and straightforward. Starting up a new e-commerce business or creating a new DTC channel an eRetail partnership (wholesale.com) is disruptive and challenging, and people and teams responsible for making it a success have their hands full with both operational implementation tasks and strategic implications of a new venture and new sales channel.
Low market entry barriers made e-commerce a hyper-competitive industry with cut-throat price competition determined by dynamic pricing algorithms and scale of logistic operations which yield razor thin margins
While it is true that, today more then ever, there are numerous solutions and models for bringing your business online and becoming an online retail business, it is even more true that these low entry barriers or easy market entry has made e-commerce a hyper-competitive industry. E-commerce cut-throat price competition is determined by dynamic pricing algorithms and scale of logistic operations which coupled together mean razor thin margins where only biggest and fittest can expect continuously sizeable profits. However, as emerging markets continue to drive the cross-border e-commerce market growth there are more than enough market opportunities for new players that can take advantage of rising tidal wave of technology advancement, emerging markets spending power growth and customers migrating online.
There are over 100 million e-tailers all over the world with whom online merchants must compete to gain a share of the estimated $1.5 trillion online market.
E-commerce websites currently comprise 10-12% of the Internet; by the time this article is posted, there will roughly be one billion of these websites aggregated on the Internet. That’s over 100 million e-retailers all over the world with whom online merchants must compete to gain a share of the estimated $1.5 trillion online market.
Differentiate your shopping experience
Retailers face a lot of competition, both online and offline. And in many cases the products they sell are very similar. As an e-commerce marketer, how do you differentiate? How can you ensure that your website is not seen as a commodity? Start by creating (differentiating and unique) better e-commerce shopping experiences to drive customer loyalty. How many of us, even when buying a branded item, will start our search on Google to find the cheapest price? We may compare and contrast seller reputation and potential shipping time, but ultimately we have created a “commoditized” shopping experience. This commoditized experience is based not on the item itself, which could be a non-commoditized product, but the distribution of the product. The post-purchase so to speak, is functionally a commodity to us as buyers. And this is where new market entrants and those that want to tackle established ones can make smart decisions - differentiate on the post-purchase.
How many of us, even when buying a branded item, will start our search on Google to find the cheapest price? We may compare and contrast seller reputation and potential shipping time, but ultimately we have created a “commoditized” shopping experience.
How to stand apart from the crowd?
E-commerce industry has effectively commoditized the routine shopping experience forcing traditional retailers to look for ways to survive. It seems like e-commerce technology is commoditized by default. Ecommerce websites tend to be standardized. It is as if someone created a couple of standard templates, and everybody chose the one they liked. Sure there are custom graphics and colors, but the overall experience on most e-commerce websites is identical. This is why the post-purchase, and differentiation in post-purchase is your gateway to creation of unique shopping experiences and customer loyalty.
The length of delivery time, variety of delivery options, tracking visibility and communications, how your product is packaged, the ease of exchanges and returns—it all contributes to your brand perception (promises you make) as a whole. Meeting them or failing them has a significant impact on your top line revenue as it will determine whether the customers will have a positive experience and start developing loyalty and join the repeat customer segment that can drive up to 40% of revenue for an average e-retailer. But how do you know on which elements of post-purchase can you differentiate and how? What are the market averages and implied customer expectations?
In this way, they learn how well the targets perform and, more importantly, the business processes that explain why these firms are successful.
Learn from the best to win : competitive benchmarking of leading e-retailers
Benchmarking is a tool for the systematic assessment of the competitive power of an enterprise. It is a process of comparing one's business processes and performance metrics to industry bests or best practices from other companies. In the process of best practice benchmarking, management identifies the best firms in their industry, or in another industry where similar processes exist, and compares the results and processes of those studied (the"targets") to one's own results and processes. In this way, they learn how well the targets perform and, more importantly, the business processes that explain why these firms are successful. Strategic benchmarking focuses on how companies compete. This form of benchmarking looks at what strategies the organisations are using to make them successful. Insights gained from strategic benchmarking results will be your definitive guide to determine across which dimensions the target market competes and across which dimensions of post-purchase you can differentiate while taking into account the established market averages.
Strategic benchmarking results will be your definitive guide to determine across which dimensions the target market competes and across which dimensions of post-purchase you can differentiate while taking into account the established market averages.
Strategic benchmarking of post-purchase performance of leading e-retailers is at the heart of the SO DIGITAL GLOBAL E-COMMERCE BRAND EXCELLENCE PLATFORM. Our platform enables competitive cross industry performance benchmarking of best performing e-retailers across dimensions of online (post)purchase experience, including but not limited to, phases of delivery, tracking, packaging - out of box experience, and return & refunds. Market benchmarking results can be compiled into user made customisable reports - per dimension of shopping experience, data point, retailer, country etc. to enable market (average) performance comparison and learning insights. It is a management tool that helps companies formulate, evaluate, and improve their e-commerce strategies by providing a systematic assessment of competitive performance of post-purchase experience across markets.
Discover how you compare against best performing e-retailers across different markets and uncover their reasons of success by contacting us today and scheduling a free no-commitment 1-on-1 walk through of the client use case of Nike (EMEA).
SO DIGITAL | GLOBAL BRAND EXCELLENCE SOLUTIONS is a technology company based in Amsterdam specialised in serving headquarters of global brands. We are proud partners of leading global digital growth brands like Nike (EMEA) and Uber (EMEA), but also other brands like TomTom (WHQ) and AS Monaco. With offices in Amsterdam, Berlin, Barcelona and Balkans we help global brands reduce complexity cost of global branding by delivering speed, scale and efficiency in execution across markets.