Start Me Up! - The tech you need to get your eCommerce startup up and running
Many products like men's grooming kits, wine, fresh food, and mattresses that were traditionally purchased at brick & mortar retail stores are now increasingly being purchased online. Many of these new age eCommerce startups are faced with the challenge to match and exceed the unique shopping experiences that the best brick and mortar retailers are currently able to offer.
Integrating and optimizing the best available platforms for all of the customer-centric features in eCommerce helps mitigate this challenge.
eCommerce startups looking to quickly bootstrap into a functional system these days have the easy option of choosing an all-in-one, highly customizable, self-service cloud-based eCommerce platform provider like BigCommerce, Shopify etc. that require payment of subscription fees or use free and open-source eCommerce platforms like Magento Community Edition.
In either case, it is imperative to take care of the following key integrations to complete the startup's eCommerce infrastructure.
- Inventory Management
Inventory management is required to provide - a balance between supply & demand, and assure stock safety. Data from this system can help improve demand forecasts. What is also needed for the newer crop of eCommerce startups are - real time synchronization across all of the multiple online channels and the warehouse(s) or storage location(s), and the ability to integrate with the POS systems if the startup has a brick & mortar presence as well.
Having incorrect stock quantities on the eCommerce site can result in losing the hard-won new customers and can potentially create a customer-service disaster.
- Shipping / Fulfillment
Shipping can make or break an eCommerce startup in multiple ways - Charging exorbitant shipping rates, Choosing the wrong shipping partner, Not providing multiple shipping options, and not providing tracking options may result in poor customer satisfaction; eventually result in customer churn or even outright cart dropouts.
Shipping costs are almost always on the pricier side for low volume shipments. Drop shipping and using third-party logistics (3PL) providers can help reduce shipping costs for eCommerce startups.
Ideally, fulfilling orders should not be something that is constantly breaking apart; it should be working smoothly like a well oiled machine. Startups can lower the burden of fulfillment by outsourcing to a fulfillment provider.
The success of a vast majority of eCommerce startups depends mostly on the approach they take for marketing their brand. Usually founders of eCommerce startups have little or no experience in marketing. What is needed in such cases is a solid marketing strategy.
The first and foremost activity to do for marketing is to create a highly relevant and effective keyword list primarily for blogging, social media and the website. The keywords should be run through services like Google's Keyword tool and Uber Suggest to identify those with "low competition and high traffic"; essentially, these are the keywords that are searched a lot, but very few results are displayed.
Sometimes, it works best to pick a channel that makes sense for the brand and to stick with it until it works before other channels are considered. Some of the channels that can be considered are Content Marketing, Email Marketing, Social Marketing, Affiliate Marketing, Referral Marketing etc.
If there's one sub-system in the eCommerce platform that helps understand trends w.r.t customer spending, product purchases, channel conversions etc., it's Analytics. Apart from these basic numbers, it's highly helpful for eCommerce startups to be able to pull data pertaining to the total amount of refunds, taxes, shipping expenses and payment provider fees.
Website/mobile-app analytics and social media analytics tools like Google Analytics, Adobe Omniture, MixPanel help companies get a lot of data pertaining to - Channel, Content, and Messaging Effectiveness etc. To optimize customer acquisition costs, eCommerce startups could experiment with different channels, messaging & audiences.
- Tax Calculations
If the eCommerce startup has a physical presence in a state (in the USA), such as a store, office or warehouse, applicable state and local sales tax must be collected from the eCommerce customers. If the startup does not have a presence in a particular state, it is not required to collect sales taxes.
Some of the American states - Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon do not have a sales tax at all. While the remaining states do collect sales tax - Identifying which sales tax to charge for a particular transaction can be a complex activity. To help with this problem, it is recommended to use Tax Calculation Software (like TaxCloud) that take care of every aspect of sales tax management, from collection to filing.
Note: American eCommerce startups do not need to pay sales tax for international purchases.
- Social Media
Facebook, Pinterest, Twitter, Instagram, LinkedIn, Tumblr, and Reddit are some of the most popular social networks today that can be leveraged for content promotion and community building. Each of these social networks is unique; for e.g., Facebook is good for audio-visual content, Twitter is good for link hoppers, Reddit for highly specific content, etc.
The selection of specific social media sites should be made depending on the content that is available for circulation, and the type of target audiences.
Almost all of the eCommerce platforms these days either come with support for social media out of box or can be easily integrated as inline buttons in the webstore for social sharing and reviews.
- Summing Up
Are these integrations alone sufficient to guarantee success for the eCommerce startup? Probably not! What matters the most is - how much value the customer receives and whether a lasting impression has been made in his mind so that he keeps coming back to the web-store and possibly even refers his friends/family to purchase from the web-store. To achieve this, the startup may also need to look into other aspects like CRM, ERP, CDN, and SEO to achieve the end-goal of new customer acquisition and customer retention. Above all of these is one magical ingredient that is absolutely necessary for an eCommerce startup to rise up above the crowd, and that's "Innovation". We'll look into it in a subsequent post in the future.