If your business is still relying on a traditional e-commerce website, remember: There’s nothing traditional about the digital economy. Geography and demographics don’t matter anymore – they’ve given way to unseen customers who should be able to encounter you from anywhere.
Fortunately, there is also nothing magical about adapting to this new reality. It just involves finding the right sales channel strategy. And you can do this by using the data you likely already have at your fingertips.
Start by evaluating your current online channel strategy. What drives customers your way? Do you sell direct only, or exclusively via third-party online retailers, through wholesalers or resellers or all of the above? Are you optimized for mobile commerce as well as e-commerce?
Then, think about ways to adjust your marketing and sales approach once you start selling through new online and social media channels. Think in terms of your typical customer’s journey through the sales funnel – hopefully it begins with some kind of a referral from a third-party, then to consideration, a clear pitch and, ultimately, a conversion to a sale.
Here are three tried and tested approaches that might help craft your new digital channel strategy:
Digital allows companies to sell directly to consumers, bypassing retail and other gatekeepers. But before you embark on creating or augmenting your direct e-commerce/m-commerce operations, think about the following issues:
How are you going to compete with Amazon?
It’s important to either sell a product that cannot be bought elsewhere, or to sell a product that has manufacturer-approved pricing. If your products don’t fit into either of those categories, competing with a giant like Amazon can be a very frustrating and expensive proposition – partnering with Amazon might be the better option (more on this below).
What is the best configuration for your online sales channel?
Choosing the right technology partners to help you sell direct is a must. There are a wide range of options and costs associated with your website, e-commerce provider and customer relations management. Decide which will best meet your needs now and in the future, as you expand. Remember that customization will provide more flexibility but at a higher cost.
How are you going to promote your sales channel?
At this point everyone knows that “If you build it they will come” is a recipe for failure. A clearly defined marketing plan that encompasses paid media, SEO and social is essential to the launch and growth of any digital commerce effort.
Sell via channel partners
Channel sales strategies and capabilities vary dramatically. Some companies avoid any potential competition with their direct sales force. Others achieve success selling exclusively through other companies. Determine which channel seller in your industry can provide the most strategic partnerships, and then decide how much data you would be willing to share with this partner. It’s critical to determine whether your margins can accommodate the cut that any channel partner would take.
Amazon is an obvious potential channel for anyone in the consumer market. They have two main options for selling, first party (selling wholesale to Amazon, which then sells to consumers), or third party (selling to consumers directly on Amazon through their marketplace). There are advantages and disadvantages to each.
covers the complexities better than most I’ve seen.
Create your own marketplace
For companies with brand power, operational agility and sufficient online traffic, a digital marketplace can unlock significant revenue opportunities and help turn potential competitors into revenue-producing partners. Sell your products and services alongside those of your partner. Amazon is obviously the biggest fish in this sea. They haven’t released exact figures but CEO Jeff Bezos has said that close to 50% of Amazon’s unit sales come from third-party sellers. And you don’t have to be a retail giant to set up a third-party program. We are working with a client now that is a leading player in their B2B vertical and is looking to create a marketplace to sell white papers and research products from others in the vertical, collecting a commission for each sale and also cementing their place as the center of the vertical’s ecosystem. Managing a third-party marketplace can monetize a market leader’s position and secure its existing customer base, while grasping incremental benefits like advertising revenue.
By identifying the products and services your customers and prospects are seeking, you can tailor a solution that quickly and efficiently delivers value for both end-customers and selling partners.
What other successful methods have you used to transform your business into a digital player?