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As everyone prepares for the most important date in online retail, 2018 is drawing closer and closer, and planning for the coming year is falling further and further behind. Brazilian e-commerce is becoming increasingly mature, and with it, we are going through a period of natural selection, where those who are not well structured will pay a high price for it. There is no more room for amateurism.
Having a well-detailed e-commerce strategy for 2018 is the way to stay afloat or grow in this dynamic market, which will demand a lot of technique and agility from entrepreneurs. Immediate solutions such as social media posts, email blasts, or ads compete for the consumer's attention in their inbox, feed, and even on CPC (cost per click). Ensuring survival in the market requires planning and excellent execution:
Zero-Based Budgeting
To ensure maximum profitability for your e-commerce, you need to create the budget for the year from scratch, that is, without taking into account the revenues, costs, expenses, and investments made in 2017 or previous years. In times of prosperity, it is common for business owners to relax a bit in terms of costs and returns, a serious but recurring mistake.
Renegotiate prices
Look for substitute products that can do more with less, or at least the same with less. Create a P&L statement for your sales channel and analyze the channel's contribution margin to your company. Research the costs of all suppliers, for example, your e-commerce platform or email marketing provider. Compare them with other suppliers, and if they are far above market rates, try to negotiate with the supplier. Seek to establish CPA contracts that make sense for your profit margin and the customer's LTV (Lifetime Value).
Eliminate the unnecessary
Over the years, it is common for e-commerce managers, out of excitement or ignorance, to hire additional services for the online store that do not actually contribute to increasing sales. Know how to measure the results of each tool, and if it is not possible, cancel it. If you cannot measure it, you cannot manage it.
Analyze your profitability
Analyzing your profitability metrics in detail, product by product, is essential for a sustainable e-commerce operation. Know which products are making your store profitable, which are sitting idle, which deserve to be liquidated, and so on. Calculate the COGS (Cost of Goods Sold) and know how much of your revenue you can invest in suppliers, operations, and marketing. If you are anticipating receivables, know exactly how much you are paying (it can exceed 20%) and define a sustainable financial strategy. Know the payment gateway percentage, the anti-fraud control, the platform, and all suppliers.
Review your mix
After analyzing profitability, analyze the store's product mix. It may be too large and make sales consistency difficult, and even harm marketing campaigns. We always recommend niching the business, working with a more specific product mix to be more accurate in segmentation and sales messaging. Market niches in e-commerce can improve your store's performance and optimize advertising costs. It is better to be highly relevant to a few than irrelevant to many.
Analytics is your best friend
Data does not lie. If your direct traffic fell, your brand fell. If your organic traffic fell (excluding brand name), it is time to optimize your site. If your social media traffic fell, your strategy is not engaging your followers. If your email traffic fell, your list is tired of the same emails. Take data as your greatest advisor; it is what will tell you whether your business is on the right track or not. Explore all the features of Google Analytics, analyze metrics and KPIs exhaustively, to know where the money is coming from and where it is being wasted. Take advantage of Check Commerce's custom reports for free in the Google Solutions Gallery.
Retention is the solution
Do not think that sending a newsletter once a week will increase your retention by 10%. Email is one of the best tools for retention. Send diverse content, preferably personalized, product recommendations, blog posts, and brand news. With more advanced tools, you can automate all these emails and put them on autopilot. The idea is to send messages, so you can diversify by using other features such as push notifications in your app, SMS messages, and even notifications via Facebook.
Content is king
Brands are becoming increasingly distant from consumers. This is because they are seeking performance and results in every action. Those who are prospering in e-commerce have already learned that it is necessary to generate relevant content and talk to the consumer in a non-transactional way. You do not need to sell every time, you need to connect and maintain your presence every time! Minimize your investment in paid media as much as possible. Of course, Google AdWords and Facebook Ads are essential, but you need to step out of your comfort zone and generate traffic and conversion through other channels, and the way to do that is the combination of Branding + Content + SEO. If your e-commerce can benefit from Inbound Marketing, or content marketing, start by generating relevant content, then become a reference in your segment and thus attract traffic to the store. You will have free brand exposure, increase the relevance and authority of the site with search engines, while generating conversions for your store.
I hope you think about your strategy before the beginning of 2018 and can start the year with great prospects. Stay tuned to market changes and the Check Commerce blog. We are confident that the economy will recover and e-commerce consumption will return to 2015 levels.
