Why this idea means business : We explore how to define and refine your e-Commerce opportunity. Learn how to craft it as a high-level concept, a plan on a page and in full detail. Read this to learn how to show your e-Commerce opportunity more clearly.
The fastest way to start selling online is via ready-made channels like marketplaces and Print on Demand. You can be up and running on those channels in just a few hours.
However, more patient sellers start with the e-Commerce planning process to first define and refine the e-Commerce opportunity.
This might mean using a tool like the Ansoff Matrix. This helps you decide whether to focus on existing products and markets or go after new ones.
For example, will your e-Commerce growth come from selling the same products to your current retailers via their online stores? (market penetration). Or should you look at new products? (product development). New markets? (market development). Or even new products AND markets (diversification)?
This is a good starting point. But for your e-Commerce business case, you’ll need to be more specific about your opportunity and why it matters. This article explores how you do that.
Finding the e-Commerce opportunity
The need to look for an e-Commerce opportunity is usually triggered by :-
- an external prompt.
- a creative thinking idea.
- market research.
External prompt
Ideally, your business makes an active choice to go into e-Commerce. But sometimes it’ll be more reactive. An e-Commerce opportunity opens up due to some event in the market.
An obvious recent example was the big move to selling online driven by Covid-19 lockdowns.
Many retail stores had to temporarily shut their doors, with only grocery escaping. Non-grocery businesses that weren’t already selling online had to set up online stores to stay connected to customers.
However, these external prompts could also be more specific to your category. For example, a competitor starts selling online, and you need to catch up. Or a traditional retailer is hard to work with, and you want to be less dependent on them by setting up your own online store. Maybe you even hire someone with e-Commerce experience, and they suggest it as a way to grow the business.
Creative thinking idea
This brings us to the second trigger for a move into e-Commerce.
Most businesses regularly review performance and brainstorm where to find future growth. If you aren’t already selling online, this is often where the e-Commerce opportunity idea first appears.
The marketing team might suggest it as they discover new segments or needs that e-Commerce could support. Or the sales team identify new online retailers where they could drive more sales.
Whoever comes up with the idea, the business takes a more considered and committed active choice to explore the e-Commerce opportunity.
Market research
Finally, your market research might also flag that there’s an e-Commerce opportunity worth exploring. It might be your research question to see if there’s an opportunity there. Or it comes up while researching something else.
So you brief a market research company and do some qualitative research.
You broadly explore what online shoppers want in your category.
You aim to identify unmet needs that a new e-Commerce offer could satisfy. If you already have business ideas about what that could look like, you test it to get customer feedback.
You’d also do quantitative research to help shape what your offer looks like. This may come later in the process as this research costs more to do, so you’ll need to justify the money for it.
What you want from the research is clarity on who you’ll go after and how you’ll do it. This often comes from e-Commerce segmentation research. You identify different online customer groups and then assess the attractiveness of each to decide on your target audience.
You aim to find insights so you better understand those customers’ unmet needs. Meeting those needs is how you go after the e-Commerce opportunity. You want to identify what you can offer customers that’s better than what’s currently on offer.
E-Commerce opportunity areas
As per our what online shoppers want and e-Commerce customer journey articles, customers normally see the e-Commerce opportunity in one or more of these areas :-
- ease and convenience.
- range.
- price comparisons.
- customer experience.
Let’s explore why these make customers more likely to shop online.
Ease and convenience
Online shopping is easier and more convenient than traditional shopping.
Unless it’s a click-and-collect order, there’s no need to physically visit the store. No need to get in the car. Find a parking space. Wander around the aisles. You can buy what you need while sitting on your sofa, at your desk or on the train.
Online shopping saves time and effort. That’s where the ease and convenience comes from.
Even with click-and-collect, you still have the convenience of not having to go around the store to find your items.
You can also shop any time you want. 24/7, 365 days a year. No opening and closing times to worry about. And with bulky or heavy items, someone else carries it to your doorstep.
Very easy. Very convenient.
Range
With traditional physical stores, you can only buy what’s on the shelf. There are physical space limitations. Plus, if something’s sold out you have to wait for it to be re-stocked.
Not so with online shopping. The shelf is essentially endless as it’s everything the retailer can hold in their warehouse. Online offers a wider range.
And if your favourite store doesn’t have what you want, it’s only a few clicks to find another store which does. And those could be anywhere in the world.
With online shopping, you can find the best products and offers with just a few well-chosen searches.
Price
Online stores also make it easy to compare prices. All the prices for all the products in the category are right there on the page.
Most sites let you sort the products on price so you can easily find the cheapest.
There’s also more price transparency between retailers. It’s easier to search for price discounts than to physically visit stores to compare prices.
There are also direct price comparison sites in certain categories. e.g. comparethemarket.com for financial services or frugl and latest deals for grocery shopping.
Customer experience
Finally, customers might also see the e-Commerce opportunity in terms of an overall improved customer experience.
For example, you can make more detailed and engaging product information available online. The customer can find exactly what they want, and you can make it interactive.
In-store, you’re limited by the size of the packaging. But online, you can share anything that works on a web page.
Check our example product pages article for ideas on this including reviews, recommendations and video content. These work particularly well for selling high-ticket products.
For services like travel or insurance, you can make the customer journey relatively self-service. You create interactive pages where the customer fills in the necessary details. They navigate through it themselves to get what they need.
Beyond that, you can also connect the customer directly to your customer service team via email, live chat or phone. They can speak to an expert on your product, rather than staff in-store who may not know the product so well.
The e-Commerce opportunity might also be lurking in your order to delivery process. For example, easy payment terms. Low cost or free delivery. Quibble-free returns. All are easier to do in e-Commerce than in traditional retailing.
The e-Commerce opportunity from a business point of view
These customer benefits should drive more sales. But there is usually also a broader business e-Commerce opportunity to explore.
For example, if you set up a D2C website, you’re “always open” to sell, 24/7, 365 days a year. Traditional stores have opening hours. Online shops never close.
Staff costs are lower as there is less customer interaction. Automated systems handle key elements like payments and order processing.
It’s only where there’s an issue that you need to involve customer service teams.
You also have more visibility of competitor pricing as pricing information is “live” and public. This helps you optimise your pricing strategy. Plus, of course, you can offer your full range of products and access customers around the world.
With all this in mind, your next step is to define the specific e-Commerce opportunity you’ll go after.
Defining the e-Commerce opportunity
This is where it starts to get more tricky. Your e-Commerce opportunity idea will have different audiences. It has to be flexible enough to work in different situations.
You’ll have external audiences (e.g. customers) and internal audiences (e.g. the leadership team, finance and supply chain). They all have to “get” what you’re trying to do. You’ll need different versions of your idea with increasing levels of detail :-
- high-level concept.
- plan on a page.
- detailed plan.
High-level concept
You should start by crafting your idea into a high-level concept.
This is a concise (1 or 2 sentences) statement, usually in the customer’s words, which describes the essence of the e-Commerce opportunity.
It states what your e-Commerce offer will do for customers, and why they’d buy.
You often spend a lot of time crafting these few words to make sure they’re 100% correct.
You test variations of it in your market research so you get to a clear high-level concept customers understand. It’s the “stickiest” part of your overall idea. The part that’s most likely to be remembered by both customers and internal audiences.
For example, Jimmy Brings (see our online alcohol selling article) would be, “alcohol ordered online and delivered within 30 minutes around Sydney”.
Bellabox (see our subscription model article) would be a “monthly surprise and delight box of curated beauty products”.
And Amazon, probably the most famous name in e-Commerce, would simply be, “the everything store”.
Plan on a page
The high-level concept is simple and easy to remember. That’s good, obviously. However, for internal sign-off and budget approval, you’ll need something more substantial.
Before you get into a detailed plan, it’s worth writing something along the lines of the plan on a page used in the innovation process. You adapt this to fit it being a new channel rather than a new product. The same principles apply as it’s about taking your initial idea and fleshing it out.
Key topics to cover include :-
- Business fit – how it aligns with your business goal, vision and values.
- Insight – the insight that’s driving this e-Commerce opportunity. Especially the lead benefit for customers.
- Competitors – the main competitors and your high-level competitive strategy against them
- Key product / service requirements – the new experiences you need to create to deliver this e-Commerce opportunity. e.g. a new online store website, order processing including payment and delivery, customer service support.
- Key enablers – the new capabilities including resources, skills and systems you need to deliver the e-Commerce opportunity. e.g. new IT skills, new software, new warehousing and delivery systems.
- Obstacles or barriers – any obvious barriers to e-Commerce in your business. e.g. issues with online retailers, competing IT priorities and conflicting supply chain objectives.
- Estimated launch timing – a realistic view of how long it will take to launch the offer.
Refining the e-Commerce Opportunity
Once your high-level concept and plan on a page get the green light, you start to flesh out the details. This is about getting to a business case and plan that validates the required investment.
To do this, you pull together a project team with the right expertise to craft and deliver the detailed plan.
For example, marketing people who understand how to do market research, build brands and create customer experiences.
IT people who can set up systems and processes and help you test the website.
Supply chain experts who can handle order processing, customer service and the whole order to delivery system.
And finally, a Finance expert who can help build your profit and loss. Your business case should track costs and work out how much you need to sell to break even and then make a profit.
Detailed Plan
You use all this expertise to build a compelling, detailed business plan. This outlines what needs to be done, who’s going to do it, by when, and how you’ll track progress and the outcomes.
The challenge is finding the right level of detail. Not enough, and you potentially miss something important. Too much, and the plan becomes harder to understand and therefore to execute.
It helps to have a high-level summary you can refer to when people start to get lost in the details. The screening questions used in the innovation process can help with this.
You start by reiterating the high-level concept and then cover :-
- Implementation – the headlines of how you’ll “do” your e-Commerce plan. Outline any new capabilities required, the key channels and partners you’ll work with, and who will lead each key activity area.
- Competitiveness – summarise your competitive strategy. If it’s cost leadership, outline how your price strategy and cost management will work. If differentiation or niche, define your key point of difference.
- Appeal – Bring to life why you believe customers will find your e-Commerce offer attractive. Focus on the key insight and benefit.
- Financial return – summarise your forecast and profit and loss for at least the first 12-24 months. Include detailed versions of these in the business case.
- Evidence – summarise research findings, customer feedback and any comparable case studies. The aim is to help decision-makers judge the risk and potential reward.
Add more detail as required
The level of detail in your business case usually depends on which channels you choose and how much resource / investment you need.
Simpler channels like marketplaces and Print on Demand may only need a few pages with the brand and financial summaries.
Plans involving online retailers may be longer and more complex.
For example, there will be challenges to your overall pricing strategy if you already sell elsewhere.
Plus, you’ll need to cover implications on your finance and supply chain processes e.g. payment terms, specific packaging for e-Commerce, and how you handle refunds and returns.
The most complex plan in terms of e-Commerce opportunity is when you sell direct to consumer (D2C). As you handle every part of the customer journey from driving traffic to managing customer service and loyalty, it usually requires the most detail.
Use your project team to add the right level of expertise and detail and then take the leadership approval team through the plan. Once it’s refined and approved, you press the go button and start executing the plan. You start creating relevant and profitable experiences for your customers to seize the e-Commerce opportunity you’ve identified.
Conclusion - Define and refine your e-Commerce opportunity
Most businesses see e-Commerce as an opportunity. But it takes a lot of thinking and planning to move from that broad view to what it specifically means for your business.
First, someone has to put their hand up and champion the idea of e-Commerce as an opportunity. That might be triggered by external events, come up as a brainstorming idea or customers actively ask for it in market research.
You’ll want to narrow down the opportunity in terms of what it means for the customer.
This is usually about ease and convenience, ranging, pricing and / or an improved customer experience.
From there you define and refine your business’s specific e-Commerce opportunity. The target audience you’ll go after. Why they’ll buy. What you’ll do to drive sales. You spell out the costs and capabilities required and show the sales, profit and overall return you expect this to deliver.
In most cases, this commercial return is the key that unlocks the e-Commerce opportunity. Define and refine this until it’s compelling, and you’re well on the way to delivering a successful e-Commerce launch plan.
Check out our e-Commerce planning process for more on this. Or get in touch if you need help defining and refining your e-Commerce opportunity.
Photo credits
Empty Shelves : Photo by Wesley Tingey on Unsplash
Idea Bulb Post it : Photo by AbsolutVision on Unsplash
Conversation : Photo by Nik MacMillan on Unsplash
Online shopping with phone and credit card : Photo by PhotoMIX Company from Pexels
Doorstep delivery (adapted) : Photo by MealPro on Unsplash
Warehouse : Photo by Ruchindra Gunasekara on Unsplash
Delivery – driver handing over package : Photo by RoseBox رز باکس on Unsplash
Counting cash : Photo by Sharon McCutcheon on Unsplash
Target : Photo by NeONBRAND on Unsplash
Man looking at ceiling (adapted) : Photo by Anton Danilov on Unsplash
