Why You Really Need an E-Commerce Strategy

5 min. read
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When you embark on a new journey, you normally make a plan, right? Let's say you are going to a wedding. You plan what you're going to wear, maybe do a little shopping for a gift and new shoes. On the day itself, you check the weather and traffic conditions to decide if you need to bring a coat, or if you should leave half an hour earlier. Afterwards, you planned to go straight home, but you see a friend you haven't seen for a while and decide to have a few drinks and talk.

The point is you always make a plan to make sure that everything goes without a hitch. You may adjust your plans as circumstances require, but you have a general outline of how your day will go. It's the same thing when you start an online business.

You need an e-commerce strategy to outline how you're going to make a success of your venture as well as to clarify your end goals. Normally, your end goals are to make as much money as you can.

Why Is Strategy So Important?

There are always two challenges that face any type of business: competition and conversion.


Competition is anything and everyone that takes away potential customers from you, typically other businesses doing the same things you're doing. If you are in clothing retail, your competition consists of other clothing retailers.

This CIO article states that e-commerce sales will top $1.7 billion this year; with that much money up for grabs, the number of players, understandably, is bound to escalate. Moreover, more customers are buying online than ever. They are also more demanding. They expect more sophistication from their retailers, upping the ante for those who want to stay in the game.

You have to be better, faster, and fresher than your competition.


Conversion is bringing the customer to the point of actually going through with a desired action; a purchase, for instance. This is often referred to as a conversion funnel. Crazyegg describes this concept in very simple terms:

The term conversion funnel is actually a misnomer, as the author points out. A funnel channels anything that's dumped inside it down to the intended receptacle, which in our case is your pocket! This means that any customer that wanders into your store will make a desired action. That's 100 percent conversion.

You wish.

The truth is, only about 2 to 3 percent of a website visitors will go all the way through the “funnel.” This is because the typical conversion funnel has many “holes” where customers leak out. This could be a slow loading website, high price points, navigation issues, search issues, bad reviews, and so on and so forth. Perhaps a better metaphor would be a sales strainer.

It would also be a mistake to think that you're only dealing with U.S. customers. According to Venturebeat.com, more people in developing regions favor online shopping, mostly through mobile, than in the U.S. For example, 69 percent of shoppers in China say they buy more products online than when they are in a brick-and-mortar store. In the U.S., this type of buyer behavior is true for only 31 percent of the shopping population.

Elements of an E-Commerce Strategy

An e-commerce strategy gives your online business some structure. This is necessary so you can identify and plan for these “holes” in your conversion funnel. The main purpose of this structure is to build your online store to deliver the best customer experience you can manage.

A good e-commerce strategy has all of the following elements:

Website Design and Functionality

The importance of an aesthetically pleasing website is self-evident; if it looks nice, people will check it out. However, even if your website looks awesome, you won't be getting any sales if it's slow to load and difficult to navigate. A bigger problem would be if it doesn't translate well to mobile devices. You have to plan for your website from the design as well as technical standpoint.

Platform Selection

As you can probably imagine, your website's platform (WordPress, Drupal, etc.) needs to be just the right fit for your business as it is now, but should be scalable as well. Once you have established your website, it can be difficult to change platforms. Many the features and functionalities of your website could be affected and the transition will cost you time and money. Do yourself a favor and choose your platform carefully before plunging into website development.

Expansion to international markets is one of the top priorities of most (75 percent) e-commerce stores in the U.S. When making your e-commerce strategy in terms of expansion, it is important to keep in mind that major companies, such as eBay Marketplaces, already report that 60 percent of revenues come from buyers outside their home markets.

Security and Compliance

Since you are running an e-commerce site, you need to be compliant with security protocols. You have to make sure that the personal and financial information of your customers are secure. You can get an idea of what you need on Rackspace.com. This online security company offers a decently comprehensive breakdown of what's required to comply with industry security standards.

Mobile Functionality

According to Forrester Research, 55 percent of all online buyers will be making purchases on smartphones by 2018. Currently, retailers process 20 percent of their sales through online gateways. This is why mobile functionality should definitely be part of any e-commerce strategies your create.

Performance Evaluation

-You need to know how well (or how bad) you're doing on a regular basis. While revenues are certainly a good indicator of your performance, you also need to consider other key indicators such as page views and time spent on your website. These metrics will give you an idea if you need to push harder at your e-commerce marketing strategy or improve your content.

Summing It Up

An e-commerce strategy will not be a walk in the park. There are a lot of elements that have to be considered, researched, prodded, and tested before you even start to think that you've gotten it right. There are quite a few resources to make this a little bit easier for the newbie strategies.

If you want your e-commerce business to go beyond the occasional sale on eBay as an amusing hobby, then you really have to buckle down and start on formulating your e-commerce strategy. If you'd like to learn more about e-commerce strategies, take a look at our recent list of 19 evergreen strategies you can apply to your business today.


About the author
Simon Slade
CEO of SaleHoo Group Limited

Simon Slade is CEO and co-founder of SaleHoo, a platform for eCommerce entrepreneurs that offers 8,000+ dropship and wholesale suppliers, 1.6 million high-quality, branded products at low prices, an industry-leading market research tool and 24-hour support.

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