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eCommerce Strategy: Who Needs It Most, When, And Which One?

Analytics
Digital Marketing
September 7, 2023
10 mins
Content

Marketing strategy for business - why, when, and which one would you need exactly? Today, we interviewed Kateryna Husachenko, eCommerce Brand Strategist at Promodo to discuss the most relevant options that would best match companies’ needs at various stages of their development: new business, developing business, and market leaders among others. As always, we have referred to hands-on tips and tricks from our internal marketing practice.

Kateryna Husachenko, eCommerce Brand Strategist at Promodo. Featured projects: Dodom, Agrolife, Freshbazar, Roller, Nix.

When a Business Needs a Strategy: When it Should Develop it?

The request for a strategy is about the request for development regardless of the stage of a company’s development. That‘s how we take an eCommerce strategy framework at Promodo. Primarily, the owners consider the strategy as a business plan: we assess a company’s business potential, analyze their competitors and product range, and project the success of business performance. These are all core constituents for further development of the eCommerce strategy plans for our clients.

Operating businesses consider eCommerce strategy approaches whenever they are about to expand and enter new markets. The so-called intuitive approach is rather dangerous for such companies: "We know everything, and nobody knows our consumers and competitors better than us." eCommerce sales strategies do not work this way. The downside of this approach is that they are bound to hit the "glass ceiling" inevitably. Consequently, the sales cease to grow across the sales funnel, while previously used tools are not effective anymore. 

In practical terms, it looks like this. Say, you own a small business and consider further growth. At some point, you apply to an agency for PPC services. At the start, you may exhibit a sharp growth that may last for a while. The agency suggests further improvements, to achieve a greater performance effect at a lower cost. Subsequently, your expenses are increasing while the effectiveness is sliding down. Why? You’ve opted for the wrong tool? What’s the problem? In most cases, the problem is that there is no one-size-fits-all strategy. There are individual tools, point solutions non-subjected to a single goal. There are also business cases when a company’s goal is not digitized as such.

In turn, market leaders come to us with absolutely different requests: on the one hand, they need to maintain their top positions, while on the other hand, they are ambitious about penetrating new markets, and we help them expand. In this pursuit, we foremost digitize their business goals like entering a new market, ranking among the top 10 companies, becoming the market leader in a year, etc. Beyond business growth trends, we analyze market capacity, competition, consumers, and consumer behaviors, as well as positioning and real-time bidding (RTB) relevant across the market, and help our clients with media planning. All these tactics come in handy in our strategy marketing performance.

Let's Dive into the Strategy for a New Business. What Tasks does it Solve for the Companies about to Start?

For new business ventures, strategy development is about understanding the overall feasibility of starting the business. I often call this "breaking the idea." I'm now talking about those owners who solely rely on enthusiasm when launching their business. They invest money and get the first results. Pretty soon, though, reality is knocking on their door… This is when we start pragmatic calculations to see the whole picture of the market. At this stage, most business owners realize that their brand should change its marketing approach or consider a different positioning.

What Should we Research at this Stage?

Once you have a business idea… Start with consumer research. Check what people are interested in. Is your idea worth the attention, or is it merely your fantasy you would share with ten friends? 

Your startup business is about the answer to someone’s needs, and the more specific you are about it, the better. 

You also need to estimate market capacity. How many people would pay for what you offer? What’s the cost? How often will consumers buy from you? Let’s say, a company wants to earn 1 m. USD. Then, it's worth figuring out whether the niche capacity equals 1 m. USD. Or, maybe there is $1 billion at stake? By exploring this question, we understand the market volume for purchasing power and capital. At this stage, it is also worth exploring the competitive environment. 

Why should Companies Focus on the competitive Environment at the Start-up Stage?

Quite often, business owners consider their eCommerce marketing ideas, products, or services as unique and innovative. However, at a closer look, it is obvious that people are already filling this need in some way. So, who’s your substitute? Who’s leading your niche by delivering alternative products or services? And what if you enter the red ocean market? You need to understand whether your marketing budget is solid. Vice versa, just like many other brands, you may develop your product or service and create the demand simultaneously. Say, you are a new player in the beauty salon market. You do not need to explain what polishing is. Once upon a time, your predecessors educated the market by spending their extra budgets. This is to say that once you are about to introduce a purely innovative offer today, you should create your market (the demand with sufficient purchasing power) and enlighten people about the use of your product or service.

Should Start-up Businesses Spend on Competition, Market Education, or both? 

That's exactly the point here. Whenever our clients say: “We have an innovative idea that lacks analogs," we start digging deeper to study whether it’s true. And if that’s the case, we find out why: either there is no demand, or it is a pure innovation. Depending on the answer, we explore the best eCommerce marketing strategies to create a new niche for the client’s innovative product or service, attract a new audience, and position the client as the niche pioneer. Nonetheless, more often than not, business owners look at their ideas with rosy eyes and are confident that no one else has a similar product or service, or that all the competitors would only catch up. Whenever this is the case, we suggest our clients down-to-earth digital marketing strategies for eCommerce to develop their business.

If a brand enters the "red ocean" and is prone to become another fish in the pond, we start elaborating the approaches that will help it stand out from the flock with advanced service or enhanced communication. As part of a brand’s strategy optimization, we explore the way consumers perceive the niche and who are major service recipients, as well as their behavioral patterns and expectations. We analyze all this data and spot the existing gaps we further fill by helping clients introduce new products or target customers beyond competitor reach. In this vein, our case study of Dodam is quite explanatory. There are a lot of microfinance organizations in the Ukrainian market that are no different from one another, while the market conditions they are in are almost the same. So, what’s the best-fit approach to stand out in the niche and attract more attention? We suggested the client focus on communication. 

Let's Talk about the established Businesses with a decent Share of Market Reputation. How should they Proceed?

The case of Agrolife is my best-fit answer here. At some point, the company managed to establish its niche - it started selling seeds to professional farmers online. For a long time, they imagined that they solely led the niche. With that perception, they did not introduce new offers. Eventually, the imaginary sense of leadership let the brand down. Somehow, they failed to notice how rivals with lesser market potential dared to take a considerable market share away. The case teaches us not to rely on our feelings, but to research the market and draw conclusions based on real data instead. 

As for theTools: which ones you Use to Achieve these Goals?

At Promodo, we apply market and competitor analysis. At a closer look, it’s all about in-depth analysis of online traffic. We look at how market forces are being currently distributed, how much traffic we can expect, and what’s estimated conversion rate is. Plus, we use online query analysis. We connect our SEO department and estimate the amount of online queries per a particular topic. Meanwhile, we always do clustering: we divide users into categories and regions. For example, one of the most recent requests came from a real estate company that wanted to enter Western Ukraine. The major problem was in the lack of understanding of a strategically attractive area they should start building at, a kind of offer they should make, whether the current demand is for apartments in high-rise buildings or townhouses, and what price they should charge per square meter, etc. We started collecting all this data and painted a wider picture of the market to the client. 

On a closer investigation of current offerings across the real estate market, we developed a shared vision about what the product should look like to attract more consumers. We’ve also explored competitive advantages and how the client would stand out from the pack. The Matrix helped the company develop its strategic market position.

Best-fit Strategy Service by Promodo

What if a Site Sells various Brands and Items ranging from cheap to expensive? What should we do once that's the Case?  

Again, we suggest analyzing the market and competitive offers. Let's consider the website holding pet products provided by various brands and items in different price categories. What is the best way to arrange such a resource? For example, one of the competitors has products from the luxury category. They attract an audience looking for eco-food. This audience is more conscious and concerned about the health of their furry friends and is willing to pay more. And for some, the assortment is represented by one brand line (maybe their own TM), which includes all product categories. A large amount of money is invested in the development of this brand. Accordingly, the platform that sells these goods is growing owing to the brand's popularity.

These cases require individual eCommerce business strategy approaches and marketing tools. In this case, we also look at the price cuts. Some people hold promotions and get discounts and gifts. We analyze where our client's price stands in the market. In particular, in our eCommerce marketing best practices, we've encountered situations where the client hasn't updated prices on their website for quite some time, and at some point, they got lower than everyone else's on the market. In this case, raising the price by a mere 2-5% helped us surge revenue on the client’s platform. 

Would you suggest any other Tools besides Market and Competitor Analysis?

That's a good question. We also actively use the data obtained following the consumer analysis to draw business conclusions. These are known as quantitative surveys or in-depth interviews. It all depends on the niche. But for the most part, we apply quantitative surveys to measure market capacity. For example, we conducted such a survey for the Rooler brand by asking consumers the following questions:

  • How often do they buy auto parts? 
  • In what category? 
  • What is the average check? 

The answers to these questions helped us to estimate the capacity of each category and the client’s offer to the market.

Let's Take a Closer Look at the Stage when a Business has reached the "Ceiling" and cannot move further. What is a Strategic Priority here?

We suggest looking for growth points, considering various criteria and directions - across the competitive environment and among the consumers. Diagnostics can also help here. For example, Brand health tracking. This is marketing research to get information about brand awareness on the market, brand reputation, brand associations, brand loyalty among consumers, and major shifts over time. By implementing their eCommerce strategies, top brands regularly conduct brand health tracking on a year-over-year (YoY) basis to see where they grow and fall behind. Similarly, we are looking for these growth points. For example, to boost one’s brand awareness, we develop a knowledge funnel, and ask consumers: "What brands are selling electronics?". We look at how many they name and in which category. And again, some may not name anyone at all, while others can immediately recall up to five market players. This shows that an average consumer associates electronics with too many brand names. This is because these brands communicate with their target audiences. So, the strategic solution for our client is to stand out from the crowd and make its voice heard across the market. There are many other proven growth strategies for one’s eCommerce success we implement at Promodo.

What about the NPS Survey? Is it a feasible Tool?

This tool is quite useful. By talking to customers, you will spot things that are not obvious to you at first glance. Nonetheless, they are important to your customers. By finalizing certain small points, you can get a tangible boost here and now. That is about fine-tuning those tiny things that will work wonders over time. 

What if a Big Brand Wants to Add a New Assortment to its Platform? Should it Conduct a preliminary Research? 

Yes, it should! We often see market leaders want to expand the range of their platforms. The story begins when a client turns from a retailer of "something" into a retailer of everything at once, i.e. dietary supplements, clothing, cosmetics, books, electronics, etc. And the customers who once came to this seller for a specific product online, get lost now. 

Whenever this is the case, you should analyze your assortment scrupulously to detect the points of intersection of your target audience and the core category. Due analysis will also help you see how much your audience buys from additional categories. Will adding a new category come as a strategic solution? Will it increase the purchasing frequency and an average check? Will it attract an audience that will subsequently buy products from the main category? Or, whether there’s a sense to separate additional areas into separate businesses? 

Feature the Main Tasks solved by a Marketing Strategy for a Business at any Stage of its Development?

Marketing strategy is always about finding growth points and achieving business goals. It is a roadmap that holds answers to all questions about the market, product or service, competitive environment, and your audience. It allows you to develop your business steadily based on analytical data and measurable marketing indicators instead of intuition.

Having a marketing strategy is like walking through a dark forest with a guide who has a map, compass, lantern, and food. Strategic approach in eCommerce is also about one of the key digital marketing performance goals: customer retention. 

Boost Your Business Performance With Strategic Mindset!
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Written by
Maria Kashina

Content Marketing Manager at Promodo

Written by
Kateryna Husachenko

Marketing Strategist at Promodo

Expertise: agricultural market, fintech, SAAS, automotive products, children's products. 10+ years of experience in strategic marketingIn the area of ​​my competences:conducting qualitative and quantitative research of consumersdetermination of brand growth pointsformation of UTP of the brandpositioning development.

Published:
September 7, 2023
Updated:
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