- Growing your business to $50M in annual revenue and beyond means refining your ecommerce operations now.
- Choosing the right ecommerce platform is the first step — we have some strong recommendations on where to look.
- With the right platform in hand, it’s time to choose the features that drive ecommerce sales, attract repeat business and sell on marketplaces.
2020 brought more than its share of sea changes to business and consumer behavior, not the least of which is the worldwide embrace of ecommerce. If yours is like many companies, you either entered the ecommerce fray in 2020 or got more serious about it to meet customer demand.
Now, as business leaders look to capitalize on 2021’s resurgence in business and beyond, it’s time to double down on your ecommerce efforts, because most consumers continue to prefer online research and buying. If you need convincing, consider these stats gathered by marketing consultancy 99Firms:
- Ecommerce activity grew by 40% in 2020, according to Digital Commerce 360. Compare that with just 15% in 2019.
- But that growth wasn’t evenly spread out. Some of the largest sites’ sales grew by as much as 80% last year, says Forbes.
- Even as consumers and business buyers turned toward online, they weren’t necessarily happy with the experience. The 2020 American Customer Satisfaction Index was at its lowest point since 2013. Satisfaction dipped across the board, according to an ASCI survey, but happiness with online variety and selection took the biggest hit.
- Analysis of studies shows cart abandonment rates hit 70% last year. Unexpected extra costs, like shipping and fees, were the main culprit, cited by 49% of respondents to one survey. Other significant factors included slow order delivery and complicated checkout processes.
The graph below likely reflects consumer sites more than business, but most of us will relate to these issues and can see how they’d affect B2B transactions as well.
That list could lead to a moment of despondency for CFOs, who rightly point out that taxes must be collected, and shipping is expensive. But the fact is, you don’t have to beat Spaceman Jeff and the Waltons at their own game to drive ecommerce success.
In fact, a frontal assault on the largest retailers, let alone e-tailers, is usually a losing strategy.
Digital marketer Adtaxi did a survey of its own, and there’s good news for smaller businesses in its findings. The survey leaned heavily toward an exploration of consumer sentiment regarding data privacy, but it also offered more general findings on ecommerce attitudes that can drive a discussion with your marketing, operations and IT colleagues.
- More than half of respondents (54%) report the pandemic has permanently changed how they shop.
- Sixty-three percent say they will prioritize shopping at small and local businesses after the pandemic.
- Sixty percent say companies are not working hard to protect their personal information.
- In fact, 72% see companies’ online data privacy disclosures as purposefully misleading.
- Ninety-six percent say free shipping is important to them, and 93% say free returns are critical.
While not every stat here is good news for smaller businesses per se, the two lists together provide guidance for how to drive ecommerce success. And the fact that a majority of respondents will prioritize smaller and local businesses is something to celebrate.
Before we get into a discussion of features, it’s important that growing firms not view ecommerce as purely a way to sell goods and services — and thus the sole purview of marketing or sales. Great ecommerce sites provide a view into inventory, shipping and scheduling; use individualized customer history data to make predictions; and prioritize customer service and sales relations.
Essentially, the more customers can learn about your products and services and self-manage their accounts, the more they’ll like the experience.
That doesn’t mean you’ve got to offer every bell and whistle on Day 1. Ecommerce success is a journey, not a destination. Still, it’s important to keep desired future features in mind as capabilities are added early on, and you can’t depend solely on the CIO to have that long-term vision — or to make the call to spend more now to set the company up for later success. As an example, reliance on manual processes and hacked-together custom code and integrations might seem cost-effective, but they will make future features harder to implement. Finance leads can help make the case for more capable technologies, even if the company doesn’t need all of the capabilities immediately.
In the way of ecommerce, the path to $50 million starts with choosing a platform that’s extensible, widely used and easily tailored to the customer’s needs.
Choosing the Right Ecommerce Platform
There are two ways most businesses support ecommerce. Some have been at it for a while and run their own sites, either with an in-house ecommerce system or by partnering with a provider that helped set up the website. Others, especially those who recently jumped on the bandwagon, use a SaaS platform to support both online and other sales channels.
We strongly recommend the second approach, which brings a number of advantages. They boil down to the fact that a modern platform delivers performance, security, integration and up-to-date features — basically everything you want from a website.
We strongly recommend using a SaaS platform to support both online and other sales channels.
By “integration” we mean the ability to interface with other business systems, including inventory management, financials, customer relationship management, fulfillment and demand planning. Developing a scalable ecommerce system that lets customers see your inventory, understand delivery times and check on existing orders is one way to match the big sites’ functionality while also breaking down some data silos and gaining near-real-time visibility into inventory, product flow, fulfillment and sales.
Performance in the world of ecommerce is a little like getting on a rollercoaster. You have to be tall enough to ride; once you clear that bar, growing another six or 12 inches doesn’t deliver any further advantage. Site performance has to be good enough to hold customers’ ever-decreasing attention spans. Once you’ve confidently got that, obsessing over further speed improvements won’t yield much in the way of increased sales. Major platforms will almost always provide all the performance you need.
One place you should obsess is security, which had better be top-notch when you’re dealing with customers' personal or business and financial information and looking to make ecommerce central to success. Getting this right takes a team that lives and breathes security, and smaller providers may not be able to afford that talent. A quick search for lists of ecommerce sites that have been breached will reveal some familiar names, so this is an area where you can differentiate. When shopping for a web developer or hosting firm, or selecting a SaaS platform, request information on security team size, auditing, credentials and security procedure details.
Security is one thing you should obsess about when leveling up your ecommerce operations.
Common ecommerce-related cyberattacks involve picking up customer information, like credit card numbers, and storing it where criminals can easily retrieve it — but where system administrators don’t notice it. In some recent breaches, data was found stored in JPEG files, which the attackers could easily access. So, just because a site provider doesn’t know of a breach doesn’t mean that one hasn’t happened or isn’t happening.
Still, ask whether there have been previous breaches and about ongoing efforts to detect tampering and improve security. An overconfident “we’ve never had data loss” should be a warning sign. It’s more likely that there’s never been data loss that the company knows about. Attacks happen pretty much constantly, so providers should be able to talk about what they’ve done to prevent data loss and, if they've had a breach, how they handled it.
Another critical aspect of security is the quality of connectors between your ecommerce platform and the other internal business systems mentioned above. Often, your ecommerce system will not run on the same platform as your financial or inventory management tools, or other critical systems on which you need to share data. A connector is software that lets two disparate systems communicate, and it can be a security weak link. Major vendors connecting their systems with those from other major vendors are likely to offer connectors that are well-vetted and updated regularly. Smaller providers may have a more difficult time developing and testing connectors and keeping up with releases. All bets are off for in-house-developed connectors to homegrown systems.
One additional function to look for from your ecommerce platform: a way to handle taxes on internet purchases of both delivered hard goods and services in all the jurisdictions where you have or expect to have customers. States now generally require tax remittance once you get past about $100,000 in sales to residents. Ecommerce success can mean owing taxes in new states and even countries as you expand your reach. Rules around tax compliance are constantly evolving, so manual calculations will be expensive, and errors could expose you to legal action.
More Ecommerce Resources From NetSuite
Fun fact: The global B2B ecommerce market is expected to expand by 17.5% annually through 2027. Get more stats on the state of ecommerce in our roundup of insights.
Customers abandon some 60-80% of ecommerce carts — but you may be able to bring them back. In this free webinar, learn to pair automated cart recovery campaigns with browse recovery.
Unify ecommerce with your back-office systems using our ecommerce platform, which helps thousands of businesses create personalized experiences for their customers.
We present the features below without prescribing an order for implementation. What’s vital to one business might be less so for another. It’s more important to reason through which features to focus on and in what order, and along the way determine metrics for measuring success. One thing that CFOs should love about ecommerce is that everything is measurable — usually automatically and with tools built into your SaaS platform of choice. From product page visits to time on page to cart abandonment rates, it’s a data junkie’s dream.
Features That Drive Ecommerce Sales
Here’s an overview of five features that pave a smoother journey to ecommerce success. We’ll cover them in detail below.
Whether you can deliver the features customers want will depend on whether the supporting systems mentioned above are in place. You can’t show online customers accurate inventory if you don’t have a system that tracks what’s in stock and can interface with your ecommerce site. Real-time updates are important if you frequently run low on or out of products. Based on experience with large consumer retailers, if you aren’t showing inventory counts, customers will assume you’ve got enough stock to meet demand and are ready to get their orders in the mail.
Shipping and delivery information
Because the economy has kicked back into gear in such an uneven way and so many businesses are dealing with supply chain issues, providing product delivery information and shipment tracking is a major plus. Teams should roll at least basic shipping costs into prices, as the consumer survey results above indicate. Because quick shipping is now the norm, it’s wise to build in the cost of a faster shipping method, like three-day delivery, then offering a small rebate if the customer is happy with traditional seven- to 10-day shipping. One- or two-day shipping can be an added cost. The advantage to building in three-day shipping is that it’ll make faster shipping methods seem not all that much more expensive, a common psychological pricing tactic.
Many platforms will automatically provide shipping information to customers. Again, it’s helpful if your fulfillment system shares data with your ecommerce platform so the process can be fully automated. In the early days of your ecommerce journey, it’ll be tempting to manually provide shipping and tracking information. The problem with any manual process is a lack of both scale and accuracy, so plan to move away from manual notifications as soon as possible.
For services companies, showing appointment slots and letting customers self-schedule is increasingly popular. It’s not right for all services companies, but for many, it’s a good way to give customers self-determination over their schedules while cutting time on the phone going back and forth seeking an agreeable appointment slot.
For professional service providers ranging from dentists to doctors to hair stylists, try automated schedulers that generate reminders delivered as emails or text messages. The idea here is to take it a step further and let clients schedule themselves as much as possible. These tools can often also generate calendar appointments for clients.
Pictures, product ratings and reviews
For all retailers, consumers will want to see pictures, product ratings and reviews, as is the norm on larger ecommerce sites. Ratings and reviews should come only from verified buyers, though. WIthout verification, customers tend to be significantly less trusting of information. There’s also the nuance of when to ask the customer to rate your product. The request often comes within two weeks of the customer taking delivery, and for nondurable goods, this is fine. Did the shoes fit, or did the sweater look like its picture? Pretty easy to assess. But for other goods, two weeks may not be enough time to form a thoughtful opinion. Our point here is that getting ratings and reviews right takes a little more thought than might be apparent at first. A sloppy job could result in an off-putting experience for customers.
On B2B sites, larger customers will be less interested in the shopping cart experience — though it still has its place — and more interested in EDI integration. Once only the domain of the auto industry and major retailers, EDI now serves any vertical needing a constant flow of supplies.
EDI uses structured forms that are exchanged electronically and replace the manual process of creating and exchanging purchase orders, invoices and other paperwork. Form transmission and receipt verification are built into the standard, minimizing problems with those elements. EDI also standardizes these forms, making it easier to work with a wide array of suppliers and customers.
Implementing EDI is somewhat complicated, but once it’s in place, it’ll open doors to new customers and ease relationships with suppliers.
CFOs evaluating whether to budget for EDI should understand the potential sales impact and cost of implementation and training. As good as a standardized way of exchanging business documents sounds, it does require upkeep. For one thing, there are a number of EDI standards, and they’re generally not compatible. Your EDI service provider will act as a translation hub, so that’s an additional expense.
Personalization in Ecommerce
As ecommerce sites grow, there’s a mandate to attract repeat business. On consumer sites, that means getting customers to create accounts so that you, and they, can track purchases and other interactions. As mentioned in the survey data above, requiring that customers create an account for a first purchase is a sure way to lose business — it amounts to being too pushy about forming a relationship. The better way to go is to allow purchases without an account but keep the account creation process and its benefits right there for the customer to see.
Requiring that customers create an account for a first purchase is a sure way to lose business.
You’re asking the customer to give up an email address, and thus expect to receive promotional emails, so make the rewards of creating an account enough to trump the hesitation everyone has about yet another source of solicitations. The primary benefits will be the ability to see their past orders and more easily process returns. Depending on the customer’s frequency of purchases, other primary benefits may be participation in a rewards or frequent buyer program and an occasional discount code in that stream of promotions. Again, most platforms are built to facilitate these interactions.
And of course, getting customers to establish accounts facilitates tracking the type of data business leaders love, like annual revenue per customer, churn rate and average purchase size. Just make sure the rewards of maintaining an account go both ways.
In B2B ecommerce, it’s clearly much more realistic to expect new customers to set up accounts. Unless you’re only taking credit cards, you need to establish how payment will be made, terms and other factors.
Whether it’s setting up subscriptions, buying at preset discount rates for high-volume purchases or tracking the progress of recent orders, great customer service often means letting your customers serve themselves.
As business leaders explore a commitment to ecommerce or start to sell to a new type of customer — say, going direct-to-consumer — marketplaces may be a good way to test the waters. You know some of the largest, as they are household names. But there are also very targeted and B2B-oriented marketplaces that have an audience and have worked out many of the features and functions discussed above. Selling there is a good way to get into the game quickly.
If you’re exploring a commitment to ecommerce or starting to sell to a new type of customer, marketplaces may be a good way to test the waters.
The downside is that those marketplaces will take a slice of your revenue. They’ll also collect data on your customers and track your sales. Some have even been so aggressive as to launch competing products when sales volume gets high enough. Nonetheless, it’s not unusual to use a two-pronged approach, whereby you begin selling on a marketplace or two as you develop your own ecommerce capabilities. And, there are ways to beat the big marketplaces at their own game.
The Bottom Line
CFOs are increasingly involved in ecommerce decisions because they see the profit forest without getting lost in the technology and sales-at-any-cost trees. By its nature, online selling is a cross-departmental undertaking, and finance has a strong role to play. Perhaps the most important job of the CFO as a company heads down the ecommerce path is asking questions. Keeping the team honest about factors including security, fulfillment strategy, features and metrics for success, while keeping an eye on costs, will help the business stay on track to drive sales and profits.