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Retail companies with aggressive e-commerce strategies are growing at a rapid rate. While Internet retailing only accounted for 11% of total apparel sales in North America during 2014, this will soon change as e-commerce, S-commerce (social media commerce) and M-commerce (mobile-commerce) explode.

Let's define e-commerce as somewhere where data meets marketing to achieve customer acquisition and satisfaction. Nowadays, consumers want to find what they want in a matter of seconds, and a company that knows how to reach them effectively through e-commerce is way above every other.

How should an e-commerce team be composed?

  • Finance: A finance team that makes sure e-commerce strategies are generating profits to boost the company's growth and create a positive ROMI.
  • Marketing: A brand marketing team that will propose customer acquisition tactics and continuously focus on driving traffic to the site. Specifics include SEO, optimize paid, earned and owned media, retention marketing strategies, creating appealing stories and new possible products for the company.
  • Analytics team: Every marketing effort should be measured with marketing analytics tools and KPI's to see which strategy worked best, which products are best-sellers, understanding which factors drive customers to purchase, or how and where to target a specific customer. Some specific metrics the team would deliver: Percentage of sales from Mobile/Social, New Visitor Conversion Rate, Average Order Value, CPC, Churn Rate, Cart Abandonment Rate and Customer Lifetime Value.
  • Customer service: Companies that are constantly listening to their customers are extremely successful. It is cheaper to maintain a customer than to acquire one, which is why resolving customers' issues and giving excellent customer service is essential.
  • Merchandising/planning: Understanding which of the products will be best sold on the website and knowing when and which new products to launch. Also, teams can use analytics to see which products are the most searched and this could turn into product innovation. If the company is not carrying the product that's being searched for by customers, merchandising could approach the product development team with ideas to develop new ones. This team will not only manage the merchandise on site but will be essential to identify opportunities for the company. They have to manage calendar, product launch, inventory, stories, make sure the content and benefits of each product are visible.
  • Development: A team of coders to bring all ideas to life is always necessary. Having in-house coders would allow constant innovation of the site. If marketing wants to launch a video carousel or interactive visuals, coders can help with the task.
  • User experience: A team that creates the path and the structure to navigate through the page. When customers go online they should be able to find what they want in a matter of seconds. The customer decision journey should be smooth and comprehensible in order for the customer to complete the purchase and return. This team may perform AB testing to select the best user experience. For example: show customers 2 different paths and allow them them to select the one they prefer.
  • Creative: When customers land on the company web page they should immediately feel related to the brand. This team makes sure imagery, fonts, videos and the entire look represent the company culture.
Ideally, this is how an e-commerce team could work efficiently. Now, regarding e-commerce selling tactics, there are 5 that could work for any company.

E-commerce selling tactics: Lessons from successful companies

1. Personalization/Data-driven selling
Amazon, Netflix, and Nordstrom
Amazon and Netflix are the forerunners of personalization. They can use data to know what customers like, dislike, track their cookies to identify what a customer has searched for, bought in the past, cart abandonment rate, where they are located, when and where they're connecting to the internet, whether they use Windows or MAC, how often they purchase online and a complete history of their purchases. Based on this, they personalize customers' experience and Up-sell. The magic with this tactic is being able to change the algorithm and do AB testing until you acquire the customer. For example, if a customer searched for a specific shoe model, he or she will probably be interested in seeing a similar model. This also occurs when a customer searches for a movie on Netflix, and is more inclined to continue watching when provided with all of the movie options from that genre.

How to use customers' information? Once the user's cookies have been tracked, the company could send him/her recommendations of similar products, if a customer abandons the purchase for a specific product, the retail company could send him/her a personalized coupon to complete the purchase, or propose complements and gear that would go well with that last purchase. There are thousands of ways to play with filters and to do AB testing to keep the customer engaged.

Nordstrom is a company that has taken personalization above and beyond. They personalize a customer's page, which means my Nordstrom page will look completely different from my neighbor's page. They track customer's cookies and every time the customer goes to the site they get smarter and the process is much more personalized.

2. Subscription model
Stitch Fix and Birchbox are 2 companies that are constantly trying to drive repeat visits to their site. Stitch Fix offers a free consultation service with the creation of a subscription. The process begins by asking women for every detail from their measurements, to dress size, occupation and most common outfits. The key is the form is quick and easy to complete. Stitch Fix offers fixed style options where customers' only task is to grade from like to dislike, or select among 4 dress occasions such as casual/night out/business or cocktail. This way customers have closed options, they don't have to spend lots of time filling the subscription, and Stitch Fix can retrieve valuable customer information in a matter of seconds.
After the subscription is created, the stylist chooses different styles of clothing based on the aforementioned categories and the products are shipped to the customer's door. She can go through everything and return whatever she doesn't like. The process allows Stitch Fix to learn a customer's likes and dislikes and offer more accurate recommendations every time.

Birchbox is another company that has taken subscriptions to another level. Similar to Stitch Fix, they offer a subscription for customers to test the latest beauty products, with the option to buy the retailer size. What's to love about Birchbox? It's similar to Sephora's culture of offering women the advantage of trying products in store before they buy, except Birchbox delivers 4-5 monthly samples to the customer's home. Like Stich Fix, Birchbox is based on the customer's preferences; it gets smarter every time and offers better and more accurate recommendations to their customers while offering the possibility to try beforehand.

So how could a company create effective subscription models and recommend personalized products for its brands? An idea for shoe brands could involve tracking the amount of miles a user has put on his/her shoes, and contact the customer when it's time to purchase a new model, sending that specific customer a brochure with coupons for the next top model and the option to order it online. As Boston is well known for the Boston Marathon, another option would be putting together personalized packages for runners with recommendations and giving them the advantage of trying products.

3. Experts/personal shopping:
Having a celebrity endorse your brand may be a good idea if you have the right person to do it. However, a more economical way and even more engaging way to go is having different experts blog about real experiences they've had while using the brand's products, and offering a forum where these experts can connect with your customers to offer them advice and recommendations.

Backcountry, the online specialty retailer, sells gear for outdoor activities such as hiking, camping, rock climbing, ice climbing, skiing and other outdoor activities. What they've done is create advocates for their brand and allow their customers to engage and chat with these advocates. Every customer can follow his/her own Gearhead depending on their interests (hiking, running, golfing, skiing, etc). The Gearhead is a real person that writes about his/her experiences as a blogger and gives his/her honest opinion regarding different products. A customer can chat with a Gearhead, ask about products and ask for advice. Also, the Gearhead will get to know the customer and what type of products he/she likes.

The new thing about this is Backcountry is allowing customers to interact in real time with pros who are actually using these products to go on adventures and offering honest opinions.

Some of the Gearheads of Backcountry. Source: Backcountry's web site

J CREW is another company that succeeds at personal shopping. A customer can book an appointment with a personal shopper who will show him products, ideas to create outfits, and what they're doing is developing a personal relationship with customers.

4. Content
One of the main problems about shopping online is customers are unsure whether the product will look the same in real life, or maybe they're concerned the sizes are different and may not fit. Here is where the brand has to make it as easy as possible so customers complete purchases.

Lululemon has done a great job showing the features of their products and ensuring customers know the value of the product they are purchasing. Let's say a customer goes online and sees a $150 bag. They always show specifications, high quality photos of the product, every detail that convinces the customer the product is worth it. They also show why they made that product, fabric and features, fit and function and extra features to help convert customers.

If the company's product has a price point slightly above competition, showing the extra value a customer is getting is essential. Videos and pictures are 2 great conversion points for consumers, taking great pictures for high-quality and high-price products may be the conversion for the customer. Also, allowing the customer to see every detail of the product, for example, highlight the value added-features, such as the gel arch support of emphasize the domestic manufacturing and craftsmanship dedication of every product.

5. The showroom trend.
Showrooming is a concept U.S. companies haven't quite grasped, but Europe has and they're succeeding at it. A big barrier for shopping online is not being able to try on the product. So either the brand creates an excellent size/fit assistance online tool so women's fear of purchasing online diminishes, or the company creates showrooms offering women the same competitive price and convenience online retailing can offer.

A second reason to start with showrooms is the increase of mobile commerce. In Western Europe, mobile internet retailing increased by a CAGR of 102% from 2011 to 2014, thanks to the showrooming trend. As more customers switch to mobile commerce in the U.S. showrooms may be the answer.

Of course, companies are worried that consumers won't go for this since 73% of consumers are motivated to shop in store by the desire of an instant purchase. However, when it comes to high quality, sports footwear where the customer may want to try the product, feel the quality, evaluate a product they'll use in their everyday roughtine, they'll surely be willing to try it in store.

If the company's products are domestically sold and made in the U.S., they could set a showroom near their facility and deliver to houses, while avoiding costs of sales assistance, huge inventory in every store and a much more personal relationship with the customer. Recreational shopping would continue to exist, since customers will be able to have the products in their hands, the only thing that would be change is where the transaction is being made.

An example of said success is Bonobos, the e-commerce business that is following the showroom trend, and the success is eminent. This company redefined the traditional retail format by venturing offline into physical stores with one difference, nothing to sell in the store. They have showrooms and allow customers to try on items, evaluate the quality, and place orders that will be delivered to their front door, while eliminating the cost of storing huge inventory and freeing sales assistants to focus solely on the customer.

From: Bonobos site.

These 5 tactics can be combined to develop one strong e-commerce strategy.

Mobile commerce and social media commerce are also something to watch. Some companies have started taking action. Myntra, the e-commerce site owned by Flipkart has just announced closing their site and moving exclusively to mobile. Other e-commerce monsters such as Alibaba and TaoBao may follow. Regarding social media commerce, according to Euromonitor, 43% of consumers around the world make purchases through social media, however 11% to 15% of consumers use s-commerce in the US and UK respectively.

Any retail company can use these strategies at the right time to innovate themselves and leave competitors behind in the e-commerce revolution.


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