Category: Business Motivation

If you are considering launching an e-commerce business, it may be quite sobering to consider that 90% of online businesses fail within just 120 days.

According to research*, the main reasons these businesses give for their failure include:

• Poor online marketing (37%)
• Lack of search visibility eg because there were bigger players outspending them in the market (35%)
• There was little to no market for their products (35%)
• They ran out of cash (32%).

What each of these reasons tells us, is that these online businesses failed because the owners failed to build an effective strategy for their online business before launching.

If you are going to move into the online space, whether you already have a bricks and mortar presence or not, it should go without saying that you need to develop a viable strategy first. That’s a strategy that includes:

• Research on your market and market needs – what problem are you trying to solve and is the market for solving this problem already saturated or are there niches that you can fill?
• A clear plan on how your product or service solves the problem you’ve identified. 
• A well articulated unique value proposition – why would someone buy from you and how is your offering differentiated from your online competition? This is as important for an e-commerce business as it is for any other business.

For example, we have a client who sells the most beautiful sympathy hampers and gifts. The online hamper market is heavily saturated but our client has a clear niche in the condolence gift sector. The problem they are solving is how to send your heartfelt condolences in a meaningful way when it’s hard to find the right words and you don’t want to just send flowers. Within this niche, they are able to cost-effectively gain visibility. (Check this wonderful company out at www.sendinghugs.com.au).

• A detailed understanding of your online competition. You need to know who your competitors are, what they are doing and how they are positioned against you. You can learn a lot from your competition, particularly if they are successful online, and you should be using all the data you are able to access.

You will be competing against these companies for exposure in search engines and in marketplaces so you need to work out how you are going to get visibility and deliver a better, more aligned customer experience.

You also need to have a clear assessment of your Cost of Goods Sold. You need to accurately
understand what ROAS you will need to achieve in your digital advertising to deliver your
desired level of profit. Google and Meta advisors, in our experience, will often underestimate
the ROAS you require so ensure you have a handle on the full cost associated with your online
sales.

Customer-centric, cost-effective logistics are also vital, particularly post-COVID where customer demands are high. You will need to be meeting customer expectations on:

• Fulfilment – are you going to fulfil orders yourself, use an external fulfilment service or drop ship from warehouses, remembering that today’s customers demand speed, want items to be in stock and are increasingly wanting express shipping times.
• Shipping costs – customers are now demanding ‘no’ or ‘low’ cost shipping. The definitely don’t want shipping costs to be around the same price as the product they are buying and will get very frustrated if they have to enter all their details into the cart before being advised of an unacceptably high shipping rate.
• Returns policy – customers want to be able to return anything they order without question and without cost to them. 67% of buyers check the return policy before buying but 92% will buy again from the same site after a good returns experience. Other than for elite, rare or high value items, these terms are becoming non-negotiable.

Your choice of platform for your e-commerce site is also a critical consideration and the platform you choose should be influenced by your goals and what success will look like for you. There are many platforms available such as Shopify, Woocommerce and Square as well as more customisable options. Whatever platform you choose, it should be:
 

• Scalable – you don’t want to be rebuilding in a few years if your online business succeeds.
• Fast – research says that 40% of website visitors will wait no longer than 3 seconds for a page to load and ideally, you should aim for less than this.
• Flexible – personalised search, flexible payment options and an engaging user experience are all vital.
• SEO friendly – not all templated websites have great SEO so beware of platforms that will be difficult to optimise in the search engines.

Once you have all these factors in order, you then need to start looking at analysing your customers and automating your marketing. Read our other story in this newsletter on customer personas and omnichannel marketing for further suggestions on marketing your business online.

If you’d like an obligation free chat about your ecommerce business, please contact us on 02 4322 7559.


 *Research project by Forbes, Huffington Post, and Marketing Signals

A Win for Business > A Win for the Customer > A Win for our Planet

 

If you’re committed to sustainable marketing practices, there is good news. Not only are they good for the health of our planet and our people, they are what customers now demand – and they are good for the long term profitability of business.

Here’s a sample of some up-to-date research on sustainable marketing and customer demands.

What is sustainable marketing?

Sustainable marketing is marketing that is focused on improving environmental wellness, social inclusion and equity, and economic responsibility, while delivering profit to the business. It’s about ensuring businesses are driven by a purpose that goes beyond simply making money.

 

Is sustainable marketing a costly exercise for business?

It is true that sustainable marketing MAY come at a cost in the short term, but in the longer term, it can be highly profitable.

A Deloitte study from 2019 showed that purpose-driven companies achieved higher market share gains and grew on average three times faster than their competitors, while at the same time achieving higher staff and customer satisfaction.

 

Why is having a ‘purpose beyond profit’ good for business?

Extensive research tells us that today’s consumer wants to buy from companies that stand for more than the products they sell. They want their brands to have a purpose.

An Accenture study in 2018 found:

• 63% of consumers prefer to buy from companies whose purpose reflects their own values and beliefs.
• 62% want companies to take a stand on matters they care about in relation to the environment, social and cultural issues and politics.

 

What attracts a consumer to a brand other than price and quality?

The 2018 Accenture study found:

• 66% said brand culture – how a brand delivers on its promises
• 66% said transparency
• 65% said they were attracted by brands that treat their employees well
• 62% said they supported companies that believe in reducing plastics and improving the environment
• 62% also said they look for ethical values and brands that are authentic.

 

How important is authenticity in sustainable marketing?

Today’s consumer is highly informed, highly demanding and driven by more than just price, product quality and convenience. They will not accept greenwashing and require claims to be able to be substantiated.

• 53% of consumers who are disappointed by a brand’s words or actions on a social issue will complain.
• 47% will walk away from the brand in frustration
• 17% will never return.

 

Do today’s consumers take sustainability into account when buying a product?

An IBM study on consumer behaviour in 2020 revealed:

• Nearly 57% of consumers would be willing to change their shopping habits to reduce the impact on the environment.
• Nearly 80% said that sustainability was important to them.

 

But are consumers willing to pay a premium for sustainable products?

For those who say sustainability is very or extremely important to them, over 70% said they would be willing to pay a premium of 35%.

 

What sustainable attributes are they willing to pay a premium for?

• Greater health and wellness benefits
• Simplifying their lives (getting back to basics)
• Organic ingredients
• Supporting recycling
• Authenticity of the products
• Environmental responsibility
• Full transparency such as on sourcing materials, ingredients and information on the supply chain.

 

Are all generations willing to pay a premium for sustainable products?

A Global Sustainability Study in July 2021 found:

• 42% of Gen Y would accept a premium of around 31%
• 39% of Gen Z would accept a premium of 32%
• 31% of Gen X were willing to pay a premium of 21%
• 26% of Baby Boomers would pay up to 14%.

 

Are people actually taking action to become more sustainable?

A Deloitte study in March 2021 in the UK showed that:

• 61% of consumers had cut back on the use of single use plastics
• 45% were buying local
• 39% were buying less new goods
• 34% were choosing brands that were committed to environmentally sustainable practices.

 

What are the reasons for people not adopting a more sustainable lifestyle?

• 22% were not interested
• 16% thought it would be too expensive
• 15% did not have enough information
• 10% believed that their actions would not make any difference.

 

Is this research relevant to Australia?

According to a Finders Green Report in 2021, Australians seem to adopting sustainable practices even more readily than in the UK. The research showed:

• Only 14% of our population are doing nothing to reduce their carbon footprint
• Of these, 9% aren’t interested and 5% think it’s too expensive.

 

How do businesses implement sustainable marketing practices?

Whatever sector you are in, consider these general guidelines:

• Work with your customers, employees and other stakeholders to deliver on your shared values. Collaborate to make a difference and communicate your joint achievements.
• Be authentic. Communicate your measurable goals and where you are on your journey. It’s okay not to be perfect now.
• Be transparent in your messaging. Consumers often feel they don’t have the information they need to make sustainable purchasing decisions so clearly explain environmental benefits on product labels or websites. Don’t use broad terms such as ‘natural’, ‘recyclable’ or ‘low carbon’ without explaining facts behind the claim.
• Apologise when you get it wrong. With all good intentions, brands will get things wrong when aiming to be sustainable so be upfront and you will be forgiven.
• Be vocal about issues that matter to your customers. Be authentic in standing up for issues, even if that means collaborating with your competition.
• Take action on issues that matter to your customers. Show your customers that you do more than simply ‘talk’ by sharing information on your actions.
• Educate your customers. ‘Lack of knowledge’ is a key reason why consumers don’t buy sustainable products so don’t assume they understand why they should buy from you. Inspire them with real facts on how their adoption of sustainable practices and purchases will actually have a beneficial impact on the world.
• Make your customer the centre-point of your storytelling about your sustainability efforts. Talk about how your customer is changing the world by their sustainable purchasing decisions and make them feel good about the choices they have made.

If you’d like to discuss your marketing strategy and communication needs, please contact us for a free initial consultation.