Snapshot : Your e-Commerce positioning helps you define your e-Commerce brand. Taken from the positioning map and statement, it defines which customers you’ll go after and how you’ll do it. In this article, learn what goes into an e-Commerce positioning and review our examples of e-Commerce businesses using them.
Following last week’s article on how marketing and e-Commerce are divided by a common language, we keep the theme of marketing and e-Commerce working together this week with a detailed look e-Commerce positioning.
This is where an e-Commerce business wants to build its brand identity and uses marketing planning tools from the segmentation, targeting and positioning process to decide and define what marketing activity it needs to do.
The best e-Commerce stores have a clear brand identity. Your brand identity tells customers who you are and what you stand for. It helps customers find you online, trust your services and keep them coming back for more.
We’ll focus on positioning, the last part of the process in this article, but let’s briefly review what happens in the first two steps.
Segmentation starts with identifying all potential shoppers for your range of products online (also known as your “universe”).
You then carry out segmentation market research to break this total market into smaller groups or segments, who share common buying traits that make them different from other segments.
To be a meaningful segment, the traits you use must be easy to identity and influence the shopper’s attitude and buying behaviour.
The easiest traits to identify are demographics e.g. age, gender, income. But, these often don’t have a significant impact on behaviour.
Occasion based traits e.g. time of day or geographic location when shopping gives you insight into what shoppers do. But they’re less helpful when it comes to understanding why.
For that you need to identify psychographic variables, particularly those relating to needs or wants. But, these are often the hardest to identify.
Good segmentations will normally combine a number of these different traits to identify segments. It’s critical that each segment has clear need or want.
Common online shopping needs and wants include ease and convenience, a wide range to choose from and the ability to compare prices.
(Read our article on what online shoppers want for more on this).
Once you’ve worked out the different segments, you need to work out which ones to go after, or target. This is where the expression “target audience” comes from.
Targeting is a process of defining how attractive a segment is. How you define attractiveness depends on the context of your brand and your category.
Attractive segments in e-Commerce include those willing to pay a price premium for better service, those with more loyal shoppers, and those whose needs are currently not well met by competitors.
But attractiveness also relates to the ability of your brand to meet the needs of those segments. If a segment values high quality or fast service, and those are strengths for your brand, then that’ll be a more attractive segment.
For each segment, you’d gather the relevant data, weigh this against how important you see that particular trait, and then multiply these together to give you an overall attractiveness “score” for each segment.
The most attractive segment is the one you’d go after. Note, this attractiveness is based on how attractive the segment is to your business. Other brands in the category may find other segments more attractive.
Finally, your positioning helps you define a clear, distinctive and desirable place in the mind of target consumers, relative to competitors.
The positioning is a concise summary of what the brand stands for and how it will compete.
The positioning comes from two key tools :-
- positioning map – a visual representation of where you and competitor brands play.
- positioning statement – a written template where you input key elements of your brand identity.
E-Commerce positioning map
The positioning map visually represents how customers perceive brands against criteria that drive buying decisions.
The most common way to create a positioning map is through qualitative research. You’d use this research to firstly identify customer buying decision criteria. Then, you’d ask customers to place or rank brands against those criteria.
The decision criteria gives you the axis labels for the mapping, and the “positioning” comes as customers place brands where they think they should go on the map.
This is especially important in understanding how customers compare different brands. It lets you know how customers compare you to competitors on key buying criteria, for example.
Positioning map - example
Here’s an example from our recent review of online fashion shopping sites.
We believe two of the major segmentation variables in this category are range and service.
To show how you can use the positioning map, let’s add in another fashion retailer, TK Maxx. They don’t currently sell online, but let’s imagine they’re considering doing so.
A positioning map like this one, created by qualitative research with customers, would give TK Maxx a good steer on how to compete against the other brands.
You can see customers think Myer has the widest range of products (as they also offer non-fashion products). Converse have the smallest range (as they only only offer Converse products). The Iconic fall in between the two but closer to Myer on range than they are to Converse.
But it’d also show customers perceive The Iconic as offering the highest levels of service e.g. choice of delivery times. It’d also show that customers perceive Converse as offering better service than Myer.
Work out where your brand plays
In this example, if were TK Maxx planning where to best play in the market, we’d use this type of map to identify competitor strengths.
But we’d also look for “gaps” in the market.
In this case, TK Maxx might go for a low service position, but use the cost savings to be more competitive on price, for example. They’d avoid competition directly with Myer and The Iconic.
E-Commerce positioning statement
The positioning map helps show “where” you’ll play, but the positioning statement helps show “how” you’ll play. The positioning statement is a template based sentence structure you “fill in” with key elements of your brand identity.
If you manage your own online store, your brand identity stops you from being a generic online store. It helps customers notice you, remember you and come back to buy again, because they trust and like you.
Your brand identity starts from the e-Commerce positioning statement. This sets the direction for how your e-Commerce brand will play in the market.
The (blank) positioning statement looks like this :-
To (Target Audience), (your brand) is the (frame of reference) that (benefit) because (Reason Why and Reason to believe).
E-Commerce target audience
As we outlined earlier, segmentation and targeting helps you paint a picture of your target audience. You need to be able to describe who they are, what they think and feel, and what they do.
A good way to paint this picture is to complete a customer segment profile. This collates key data and insights about each segment.
Start with a meaningful name for the segment. This is often based on an attitude, behaviour or need. For example, “Service Seeking Susan” or “Range Researching Rachel”.
Then collate relevant information and insights about their demographics, occasions and needs. Identify customer attitudes and behaviours that most influence buying decisions. You want these to help you decide what to prioritise to appeal to that segment.
“Service Seeking Susan” for example might always check the delivery and returns options. You’d prioritise these in your website content.
“Range Researching Rachel” might check out multiple websites, and multiple sections with any one website. You’d prioritise search (so she finds your store first) and navigation (so she can move around the online store easily) to appeal to her.
E-Commerce frame of reference
After you define who they are, you then build out how you’ll meet your target audience’s needs.
The first step is the frame of reference. This is the definition of the category you play in. You choose how broad or narrow to make this definition.
In this pizza delivery example, the frame of reference could be :-
- narrow – pizza shops in Bondi
- broad – evening meals in Sydney
- somewhere in-between – pizza delivery in Easter suburbs.
Each choice has different implications on how you’d operate, and who you’d compete against. For e-Commerce positioning, how broad or narrow you go has implications for your e-Commerce strategy.
Are you a generalist store with a wide range of products, for example? This implies a broad Frame of Reference.
Are you a niche store with a specialist and exclusive range or products? This implies a narrow Frame of Reference.
The broader the frame of reference, the most potential customers it’ll have. But this also means it’ll have more competitors. You need to find the right frame of reference for your brand’s context. It helps determine the scale of marketing effort and resources needed.
The Frame of Reference defines your competitor set
The e-Commerce frame of reference also helps define who you compete against – your competitive set. This influences many elements of your marketing plan. For example, the products you offer, your pricing strategy, your distribution set-up and of course, how you promote your brand.
For example, The Iconic and Myer are direct competitors. They would operate in a similar Frame of Reference, where they offer similar big ranges and high service levels. These brands would actively compete against each other.
But Converse D2C doesn’t directly compete with those brands. Its Frame of Reference would be different. It would compete against other shoe brand D2C stores.
The next stage in e-Commerce positioning is to define the key benefit for the target audience. Benefits operate at many levels from functional product features, to more complex emotional benefits.
As per our article on what online shoppers really want, the three most common online shopping benefits are ease and convenience, range and price comparisons.
These are all functional rather than emotional benefits. They appeal to rational decision making rather than directly connecting with feelings or emotions.
Arguably, these functional benefits may have some indirect emotional connections.
For example, you feel reassured you know when a package will arrive, you feel proud you’ve found something unusual or you feel happy you’ve got a bargain. But, these come after the buying decision, they’re not what drives the actual decision.
Which benefit matters most changes over the customer journey
As per our recent article on marketing and e-Commerce differences, the stage of the buying decision journey affects which benefits matter to customers.
At the top of the funnel, where awareness and consideration matter, emotional benefits create more attention and interest. Customers don’t care much about functional benefits at that point. Emotional benefits help brands stand out more.
But towards the bottom of the funnel, near the point of purchase, the logical rational brain steps in. Functional benefits become more important. But, it’s harder to stand out on functional benefits. Most store websites and order to delivery systems offer similar functional benefits.
Differentiated functional benefits can and do exist, but need investment in the systems to support them. For example, your differentiated functional benefit could be :-
- The only store to deliver within 24 hours of the order being placed (ease and convenience).
- The only store to stock more than 1 million products (range)
- Find a cheaper product and we’ll refund the difference by 10%. (price)
All these functional benefits would need investment in e-Commerce systems to deliver them. They’re not standard practices.
These types of functional benefits suit generalist stores. Generalist stores build economies of scale. They can invest in the necessary support activities (fast delivery, large range, price discounts etc) to support this benefit.
Emotional benefits in e-Commerce
Niche stores on the other hand don’t have the same economies of scale. A stronger, more defendable benefit for them is to dial up the emotion.
One online store we created for a manufacturer for example, focussed on its ability to always have products in stock. These were high demand products often out of stock in other channels.
The out of stock situation in other channels caused a lot of anxiety. So, this store was able to reassure customers that’d they always be able to access the product. This was a functional benefit, enhanced by an emotional one.
Example – Amazon emotional benefit
Emotional benefits are tricky in e-Commerce, but not impossible. Bigger e-Commerce brands like amazon.com.au use advertising to create more emotional connections with customers. This works at the top of the funnel to drive more traffic to their website (where the functional benefits of ease, range and price then take over).
In this advert for example, there’s a cute dog, and a cute baby, neither of whom are going to shop at Amazon.
But they’ll have strong emotional appeal to the type of customer (family shoppers) Amazon wants. (plus they add humour for even more emotional connection).
Of course, if your brand already has a clear emotional benefit, you can tie your e-Commerce store to this benefit.
Many charities now have online stores for example. These link the emotional benefit of the charity brand (feeling good by helping others) to what their online store offers.
Example – Red Cross emotional benefit
Look at Red Cross Australia for example.
They offer a limited edition Kindness Collection range of totes and bags. These have been exclusively designed and aren’t available elsewhere.
There’s a clear emotional benefit to supporting the Red Cross by buying these products. The focus is not on ease and convenience, range or price, it’s on supporting a good cause and helping others.
Your benefit is why customers choose your brand over competitors. It needs to be credible and believable to customers, and for that you also need to define the reason why and the reason to believe.
E-Commerce Reason Why and Reason to Believe
The reason why and reason to believe are the justification system for your benefit and overall positioning.
In your e-Commerce positioning statement, the reason why is what helps customers understand the benefit. The reason to believe what proves the benefit, so they believe it.
Reasons why for manufactured products might include ingredients, or where and how the product is made. In e-Commerce, the reason why usually relates to how the online store works. It’s normally related to a process or system.
Example e-Commerce Reasons Why include the best navigation and layout, the simplest check-out process, the widest range of delivery options, the breadth of the product range, the frequency of price checks or some sort of pricing guarantee.
Competitors will try to copy or improve on these are functional benefits. You need to make them unique and defendable. The way to do this is by supporting them with a clear Reason To Believe.
Reason to Believe – e-Commerce ease and convenience
The Reason to Believe is the proof of your reason why.
Let’s say your Reason Why is ease and convenience. Any store can claim this, so why would customers believe you? You need to be more specific about what you mean by this. Are you easy and convenient at every stage for example or is there one part of the process you do better than anyone else?
Ease and convenience on your store website could mean good site navigation and lay-out. You could focus on the minimum number of clicks to buy for example, like Amazon’s 1-Click order system.
So, if you were Amazon, your convenience benefit could drive a Reason Why and Reason to Believe something like this :-
“the most convenient way to shop online due to our focus on making the purchase as easy as possible, proved by our 1-Click order system”.
(though in fact, as we cover in our article on working with Amazon, their primary benefit is generally range, not convenience).
Ease and convenience – e-Commerce systems
Ease and convenience could also apply to payments though. If you set up a member log-in system that remembers the customer’s payment details, they don’t need to re-enter them. Definitely easier and more convenient.
Payment options like PayPal or After Pay add ease and convenience to payments. Subscriptions, repeat orders or reminder services all make the next purchase much easier.
Ease and convenience can also apply to your order to delivery system. A choice of delivery slots that includes evening or weekend deliveries for example, is easier and more convenient than standard delivery options. (see our recent article on how The Iconic offers more delivery options than Myer for example).
But what makes life easier for shoppers tends to make life harder for you.
You’ll likely need technical know how and investment to support these types of Reason to Believe. Your e-Commerce positioning work helps flag these needs early in the e-Commerce planning process.
Reason to Believe – e-Commerce range
Offering a wide range of products can help attract more customers, but it comes at a cost. You need to hold on to more stock, manage more complexity in order to delivery, and it’s hard to show you have a wider range than competitors.
To prove you have a wider range than competitors, you first need to know how big their range is, so you can make a comparison.
This isn’t always feasible.
An easier range benefit to prove is offering exclusives. Find specific products that only your store sells. Rare or limited edition products and one-offs are a great way to differentiate your brand.
Exclusives makes you unique and more desirable for shoppers, as they can’t get those products elsewhere.
Reason to Believe – e-Commerce price
Finally, if your store competes on price, you need to prove your store offers the best value. This easiest way is to :-
(a) regularly price check against competitors to make sure they are actually better and
(b) make it easy for customers to do the same.
In some categories, third party websites will run regular price checks. Customers (and you) can use these sites to monitor prices. The site supermarket.co.uk for example does this for UK grocery shopping.
Failing that, you can monitor competitor prices directly on their websites. Or you can invest in marketing technology led solutions. Services like Edge by Ascential set up automatic monitoring and tracking of competitor prices, including alerts when prices change, for example.
To make it easier for customers to compare prices, there are also companies like Numerator who provide software that sits on your website and displays prices from retailer websites for each of your products.
So, for example if you are a manufacturer who doesn’t sell direct, but who sells through online retailers, you can show the prices those retailers charge on your website, like this example on Tim Tam biscuits.
What to do with your e-Commerce positioning statement
Completing these 5 e-Commerce positioning elements sets you up for the rest of the brand identity development process.
The e-Commerce positioning statement is an important part of your e-Commerce plan. It shows what your brand will do, and how it’ll do it. It collates big decisions you’ve made about how your brand will sell online.
Your e-Commerce positioning helps you find a clear and distinctive place in the market in the minds of customers. That’s why it’s a great place for e-Commerce and Marketing to connect.
Conclusion - E-Commerce positioning
The e-Commerce world is often a crowded and competitive place for your brand to play.
E-Commerce positioning helps identify clear spaces, relevant to customers where you have the best opportunities to win.
It helps your brand stand out from the crowd, and own a specific position in the minds of customers.
This gets you noticed, trusted and remembered by customers. Clearly, you need this to grow your online sales with these customers.
The key elements of the positioning statement – target audience, frame of reference, benefit, reason why and reason to believe – are core brand identity elements that should be reflected in marketing agency briefs and your marketing plans and activation for e-Commerce.
Your e-Commerce positioning forces you to make decisions about who your target customer is and how you’ll go after them. Use it wisely, and your e-Commerce marketing plan will have more relevant products, smarter pricing and targeted and more impactful communications.
Read our guide to segmentation, targeting and positioning to find out more about positioning. Or, check out our article on the functions of e-Commerce to see how different business functions need to work together.
And of course, contact us if there’s a specific e-Commerce positioning project you need help with.