Don't Just Open an Online Store. Build an Ecommerce Brand Get your power back as an entrepreneur with a diversified channel strategy.
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The ecommerce space has seen rapid expansion since the pandemic. As physical retail stores were forced to close or halt operations in the physical space, global retail ecommerce experienced an increase from 14% in 2019 to 17% in 2020. Recent estimates suggest that ecommerce will register more than $6.5 trillion in sales by 2023, representing 22% of global retail sales. To capitalize on this, ecommerce business owners will benefit from rethinking their channel strategies and focusing on building their brand.
Most customers begin their shopping journey on Amazon. These shopping searches don't often get extended to the rest of the web and are why marketplaces and social platforms are so popular with online shoppers and business owners.
While setting up a primary shop on Facebook, Amazon or eBay is simple, businesses can spend months or years trying to perfect their channel strategies. Since they offer simple, structured approaches to inventory management and sales and access to a broad pool of customers, such platforms are attractive to those just starting their ecommerce venture.
With each platform requiring a dedicated strategy, business owners typically concentrate on just one or two channels. If a business manages to dominate the buy box on Amazon or master Facebook advertising, investing more effort in the successful platform makes sense. This leads to vulnerability as businesses become locked into ecosystems.
The problem with channel lock-ins
Business owners protesting channel lock-ins and market dominance by a central platform is nothing new. As conglomerates have managed to corner the online market, small retailers leveraging these marketplaces have seen their profits decline. Data shows the number of small retailers has fallen by 65,000 between 2007 and 2017 as Amazon has grown. Marketplaces also impede the ability of small businesses to operate independently as business owners are prevented from having direct relationships with their customers.
This becomes more problematic when Amazon, Google, Facebook and Apple change a rule or an algorithm. For example, Apple recently changed its rules regarding data transfer on apps from its app store. This simple change dramatically affected Facebook advertising, leaving ecommerce stores that relied heavily on Facebook ads to find new sources of traffic. Other challenges come with listing products on a marketplace. Amazon has been known to freeze accounts or withhold earnings. The retailer has also copied products under their private label, Amazon Basics.
Besides the above, building customer relationships becomes impossible if there's a third party managing the transaction.
Moving beyond the online store
As tech giants battle for internet control, building a robust sales and customer acquisition strategy is critical for ecommerce businesses. Consider a backup plan if a single channel is responsible for more than 50% of your revenues. This could be as simple as creating a website on an independent domain for brand awareness. By setting up an online store on a separate domain, small businesses can capture customer information that can help generate repeat customers and brand advocates. This approach will help reduce reliance on marketplaces.
Consider your traffic sources for those already drawing revenues from an independent website. What would you do if one of them disappeared? Is your brand identity powerful enough to withstand the loss of a social source? Do you have an email strategy to interface with customers? If you have product feeds for Google, why not diversify to Facebook and Pinterest? If you succeeded in using Facebook ads, why not try out Snapchat or TikTok?
Building your own ecommerce brand
Your ultimate aim as an ecommerce entrepreneur should be to build a brand, not just a store. You must diversify your traffic sources and sell on multiple channels for maximum outreach. To become a multi-channel ecommerce business, you will need to own your data and emails. The simplest way to build a multi-channel presence may be to use a platform to unify your channels and focus on your brand.
Small entrepreneurs may never be able to win a fight with tech giants. This is true especially regarding the sheer scale and integrated experience offered by marketplaces that combine payment processing, well-oiled shipping networks and SEO. But there are ways to level the playing field strategically. One way could be to dramatically reduce the customer experience gap and offer near-identical or more personalized user experiences. If you are confused about where to begin, ecommerce cloud vendors provide many tools and strategies for cultivating brand awareness. Building your brand equity can generate a long-term impact on the future of your business as you reap dividends in customer loyalty, brand recall and most importantly, a much larger slice of the market pie.