E-commerce - 29 Jun 2024

Rising to the Top: How to Thrive in the Competitive E-Commerce Landscape

To say the e-commerce world has been on a wild ride over the past few years is an understatement. Although the world was already gradually shifting towards online purchases, the pandemic pushed through a decade of growth over the course of a few months as homebound consumers turned to digital platforms to buy everything from sweatpants and groceries to wallpaper and furniture.

Having grown accustomed to the ease and convenience of shopping online, consumers seem more than happy to continue using online channels for their shopping needs. Rather than slowing down with the reopening of in-store shopping, the global e-commerce market continues to post double-digit digital growth.

Today, there are more than two billion digital shoppers worldwide. However, with such rapid growth comes fierce competition, and one thing has become clear for those trying to find their place in a crowded market: it is grow or die.

If your business is not continually innovating and adapting to keep up with the rapid pace of growth in the e-commerce market, you’re likely to be left behind. In this cutthroat environment, it’s survival of the fittest and only those who can stay ahead of the curve will thrive.

Coming up, we will dive further into what is shaping the e-commerce landscape and what you can do to ensure your business comes out on top in the battle for buyers.

Increase in Competition Shows No Sign of Slowing Down

The pandemic didn’t just boost e-commerce sales; it transformed e-commerce into a strategic objective for businesses worldwide. Why? Compared to in-store sales, e-commerce offers businesses lower overhead, and wider reach- an ideal combination for maximizing profits. From large multinational brands to local sellers, companies of all sizes rushed to establish their e-commerce footprint, investing heavily in creating custom storefronts and unique shopper experiences. Today, there are an estimated 24 million e-commerce sites globally, with platforms like Shopify and WooCommerce making it easier than ever for just about anyone to set up an online shop.

This influx of new e-commerce sites means that competition is increasing faster than the market itself. Brands now have to fight harder to maintain and grow their market share, facing not just competitive pressures but also rapidly rising acquisition costs.

It’s Getting More Expensive to Attract Customers

Standing out in a crowded market is not cheap. Customer acquisition costs (CAC), cost per mille (CPM), and cost per click (CPC) have soared. Changes in ad targeting and privacy policies like Apple’s iOS updates, have made reaching audiences on platforms like Facebook more complex and expensive. For example, Google’s CPM increased by 75%, TikTok’s by 185%, and Meta’s ad costs went up by 61%.

These rising costs present a significant challenge for e-commerce brands. With everyone vying for cheaper clicks and lower prices per thousand impressions, the availability of affordable, highly targeted traffic is limited. A recent survey found that 47% of e-commerce businesses fear that they could be priced out of the market if ad costs continue to rise at their current rate.
So what are sellers doing to compete in this environment?

Leveraging Data-Driven Insights

The key to unlocking growth often lies hidden in your data. Yet surprisingly, only a small percentage of companies truly analyze their data. Although many companies generate reports on monthly sales or inventory, most fail to dig deeper. However, as any industry pro will tell you, the data your website collects is a virtual treasure trove of information, and proper analysis is your map to uncover growth opportunities.

According to e-commerce giant Shopify, there are 20 key metrics that every e-commerce business should be watching to help them measure performance, identify pain points, and optimize sales:

• Sales Conversion Rate: Percentage of visitors who complete a purchase.
• Average Order Value (AOV): Average amount spent per order.
• Customer Lifetime Value (CLV): Total revenue expected from a customer over time.
• Customer Acquisition Costs (CAC): Cost to acquire a new customer.
• Shopping Cart Abandonment Rate: Percentage of carts abandoned before purchase.
• Returning Customer Rate: Percentage of customers making repeat purchases.
• Bounce Rate: Percentage of visitors leaving after viewing one page.
• Impressions: Number of times the content is displayed.
• Reach: Unique users who see your content.
• Engagement: Interactions with content, like likes, comments, and shares.
• Net Promoter Score (NPS): Customer loyalty and satisfaction measurement.
• Click-Through Rate (CTR): Percentage of clicks on a link versus impressions.
• Store Sessions by Traffic Source: Visits classified by origin (e.g., search, social).
• Store Sessions by Device Type: Visits categorized by device (e.g., mobile, desktop).
• Store Sessions by Location: Visits are categorized by geographic location.
• Top Products by Units Sold: Best-selling products by quantity.
• Month-End Inventory Snapshot: Inventory levels at month’s end.
• Average Inventory Sold per Day: Daily average of inventory sold.
• Refund and Return Rate: Percentage of orders refunded or returned.
• Churn Rate: Percentage of customers who stop buying over time.

By fully leveraging your data, you can pinpoint areas where you are leaving money on the table and implement changes to capture those lost dollars.

Acquiring Customers and Keeping Them Coming Back

Balancing customer acquisition and retention is crucial to the success of any business. While attracting new customers is important, it costs five times more to attract new buyers than to retain existing ones, which highlights how important it is not to lose sight of the value of building brand loyalty.

Here are a few key strategies that can help you boost that all-important CRR we discussed in the last section:

• Build Customer Loyalty Through Shared Values: Make sure your brand stands for something your customers care about. Whether it is supporting a cause or being eco-friendly, when customers share your values, they are more likely to stick around.

• Frequently Ask for Feedback: Don’t be afraid to ask your customers how you’re doing. Hearing what they think, good or bad, helps you improve and keeps them coming back.

• Treat Customers as Humans, Not Data: Remember, customers are not just numbers. While automation is becoming a crucial part of e-commerce operations, be careful where and how much you rely on technology. Even when shopping online, people want to be recognized as individuals and are more likely to engage with brands that offer a personable and personalized shopping experience.

• Be Easy to Understand: Keep things simple. If customers understand what you’re all about, they’re more likely to choose you over the competition.

• Provide Quick Delivery Options: Give customers the option to get their stuff fast. Speedy delivery makes a big difference in keeping them happy and coming back for more.

• Make Returns and Refunds Easy: Nobody likes to have to return things. The easier it is for customers to send things back and get a refund, the more likely they are to buy from you again.

• Foster Word-of-Mouth Support: Encourage happy customers to spread the word. Good reviews online and recommendations from friends go a long way in keeping your business thriving.

• Excel in Customer Service: Be there for your customers when they need help. Make it easy for them to reach a real person who understands and can address their concerns.

• Build a Customer Profile: Know your customers inside and out. Use what you learn to offer them products and experiences that they will love.

• Provide ‘Buy Now, Pay Later’ options: Give customers flexibility with payment options. BNPL apps like Klarna and Affirm let customers spread the cost of their purchase over fixed installments, which can help boost your sales by capturing buyers who want your products but might not have the cash on hand.

• Use gamification to keep customers invested: Make shopping fun. Reward customers for sticking with you, and they’ll keep coming back for more.

• Become Difficult to Replace: Stand out from the crowd. Offer something unique that keeps customers coming back to you instead of your competitors.

Collectively these strategies aim to build stronger relationships with customers, increasing retention rates and driving long-term business growth by making each customer feel valued and establishing a genuine connection with your brand.

Tell Me How You Feel (About My Business)

Customer reviews are a powerful tool to convert browsers into buyers. Countless studies show that online shoppers will read online reviews before making a purchase and 70% will read between one and six before committing. Actively soliciting reviews and showcasing them at critical points in the buying process, like, for example, during checkout, can significantly boost your credibility and give buyers the last little nudge they need to complete their purchase.

The key is not to sit back and wait – or hope – that your customers will leave reviews; you often need to encourage them to share their experiences. Send follow-up emails asking for feedback and make it easy for them to give it by including a link in your communication. Once you have gained positive reviews, show them off by featuring them on your website and social media channels to build trust and influence with potential buyers.

Share Real-Time Shipping and Tracking Information

Order tracking is more than a convenience; it has become a crucial part of the customer experience. Shipping anxiety is a relatively common occurrence where customers get super nervous about their orders arriving on time or in one piece. Real-time tracking helps alleviate some of this stress, making the whole buying experience much more enjoyable. When companies offer order tracking customers will check. More than 3 out of 4 of the buyers recently surveyed admitted to tracking their orders multiple times while awaiting delivery.

Transparency in shipping can boost customer loyalty and help drive repeat business. Implementing advanced tracking features shows customers that you care about their experience even after they have completed their purchase.

Maintaining Post-Purchase Engagement

The final checkout screen should not be the last interaction you have with your customers. Post-purchase engagement is key to building long-term relationships. Send personalized follow-up emails expressing gratitude, seeking feedback, offering support, and providing other important updates.

Post-purchase communication can also include recommendations for related products, exclusive offers, and loyalty programs. Whatever you do, continuing to engage customers after their purchase not only enhances their overall experience but also encourages repeat business.

Professional Marketplace Development: An Invaluable Asset

Navigating the e-commerce landscape can be overwhelming, but you don’t have to go it alone. Professional marketplace development services, such as those offered by Nirvana Canada, can be an invaluable asset in this journey. With expert guidance, you can ensure your online store is not only visually appealing but also optimized for performance, user experience, and conversion. By leveraging our professional expertise, you can ride the e-commerce wave to maximize profit and secure your place at the top of this competitive market.