Snapshot : Your e-Commerce positioning shows which customers you go after, and how you appeal to them. In this article, we walk through the positioning process, with a focus on e-Commerce brands. Key outcomes include the positioning map and statement. We share how to do both step by step. We also share examples of different e-Commerce brands bringing their positioning to life. Learn how to use this marketing tool to improve your e-Commerce strategy.
Marketing and e-Commerce often have to work closely together. A key area where that happens in when you need to work out your e-Commerce positioning. For e-Commerce brands, this comes after you’ve done your segmentation and targeting. These help you decide which customers to go after, and what they need.
From there, the positioning links your target audience to what you’ll do for them (the benefit) and why the should believe you (the reason why and reason to believe).
Segmentation starts with identifying all potential shoppers for your products (also known as your product’s “universe”).
You then carry out segmentation research to break this universe into smaller segments.
Each segment shares common traits that make them different from other segments. It’s these traits that help you position your brand.
To be a meaningful segment, it must be big enough in terms of sales to be worth going after.
Also, the traits you use must be easy to identify, and have some influence over shopper’s buying decision.
The easiest traits to identify are demographics e.g. age, gender, income. Then there’s occasion based traits e.g. time of day or location when shopping. Finally, there’s psychographic traits which are normally attitudes or beliefs e.g. only buying sustainable products or always buying the best value.
It’s unusual to find a single trait that uniquely drives buying decisions. Usually, you need a combination of multiple traits to work out what people do and why.
For e-Commerce, you also want to identify what each segment needs and wants from online shopping. As per our article on what online shoppers want, common examples include ease and convenience, a wide range to choose from and being able to compare prices.
Once you work out the segments, you need to decide which ones to go after. You can’t appeal to all customers, and some customers will be easier to win or more valuable than others.
This is your target audience.
Targeting is a process to define how attractive a segment is.
It’s based on variables like the size of the segment, how profitable it is and if it’s growing.
In e-Commerce segments are also attractive if they’re willingness to pay more for better services, if they’re loyal shoppers, and if there’s low levels of competition.
But for a segment to be attractive, your brand also needs to be able to meet its needs. You have to be attractive to that segment. You need to be what they’re looking for.
Attractiveness is usually a calculated score. First, you list out different variables for each segment e.g size of market, growth in sales, level of competition. Then, you use these to rank segments in order. This ranking helps you decide which segment to target.
The final step in the process is your positioning. This helps you define a clear, distinctive and desirable place in the mind of target consumers. This position is relative to competitors.
The positioning is a concise summary of what the brand stands for and how it’ll compete.
You use two key tools in positioning :-
- positioning map – a visual representation of where you and competitor brands play.
- positioning statement – a written template which defines key elements of your brand identity.
E-Commerce positioning map
The positioning map is a grid with two axes. Each axis is a key buying decision driver. The map shows how customers perceive brands against each driver.
The most common way to create a positioning map is with qualitative research. In simple terms, you ask customers to tell you the two things that most influence their buying decision. You use these as the x and y axis labels for the map.
Then, you ask those same customers to place brands on the map against where they think they sit relative to each axis. Where customers place each brand (including competitors) gives you a visual view of how they perceive each brand.
Positioning map - example
Let’s look at an example from our recent review of online fashion shopping sites.
Two of the major segment variables in this category are range and service.
Myer wins on range. The Iconic wins on service. Converse has the lowest range, but is better than Myer on service. Very easy to work that out when you’re looking at a visual map like this.
But what if you want to find a space in this category that’s less competitive? For let’s say we’re TK Maxx and want to enter this category.
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 also “gaps” in the market.
In this case, TK Maxx might go for a low service position, and a media range. They could use the cost savings from this approach to be more competitive on price, for example. They’d not compete directly on Myer’s range, or The Iconic’s service, but find another variable to compete on.
E-Commerce positioning statement
The positioning map helps show “where” you’ll play, but the positioning statement shows “how” you’ll play. It’s a template based sentence structure you “fill in” with who your target audience is, what benefit you’ll offer them, and why they should believe you.
This statement then forms the start of your brand identity. You to use it to create consistent brand assets, that bring your e-Commerce positioning to life.
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).
As we already said, segmentation and targeting identifies which segments you’ll go after.
But you need to be able to describe these segments. How they are. What they think and feel. How they make decisions.
A common tool to do this is the customer segment profile or persona. In this, you collate key data and insights about each segment. This will include information about demographics, occasions and needs of those customers.
For the positioning you need to give your segment a meaningful name.
The name usually brings to life a key need or behaviour. For example, “Service Seeking Susan” or “Range Researching Rachel”. These names help you focus on what you need to do to help that segment.
“Service Seeking Susan” for example might always check the delivery and returns options. So, you’d make those very easy to find on your store website.
“Range Researching Rachel” on the other hand, might like browsing different areas of the website. For her, you prioritise search and navigation. You want her to find your store quickly, and move around it easily.
You don’t need all this detail in the statement itself, but you need to know it to define your target audience.
Frame of reference
Next, you start to define how you’ll meet your target audience’s needs.
The first step is the frame of reference. This defines 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 operate, and who you compete against. For e-Commerce positioning, how broad or narrow affects your competitive strategy.
You can be a generalist store with a wide range of products, for example. That’s a broad Frame of Reference.
Or you can be a niche store with a focussed range or products. That’s a narrow Frame of Reference.
The broader the frame of reference, the more potential customers you attract. But, it costs you more to go after this larger segment, and you’ll also have more competitors. Deciding the frame of reference helps you work out how much you need to spend, and how much effort it’ll take.
The Frame of Reference defines your competitor set
The e-Commerce frame of reference also defines your competitive set. That affects 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, from our earlier fashion example, The Iconic and Myer are direct competitors. They’d have a similar Frame of Reference, where they offer similar big ranges and high service levels.
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 main benefit for the customer. Benefits work 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 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 to buy as a gift. You feel happy you’ve found a bargain. But, these come after the buying decision. They’re not usually what drives the online buying decision.
Which benefit matters most changes over the customer journey
Where the customer is on their journey affects which benefits matter to them. (see our recent article on marketing and e-Commerce differences for more on this).
When awareness and consideration are the most important, emotional benefits work best. They create more attention and interest. Customers don’t care much about functional benefits at that point. Emotional benefits help brands stand out more.
But nearer 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.
To stand out, you usually need to invest in back-end systems. 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)
To deliver these sorts of e-Commerce benefits, you need to pay for the systems that support them. These wouldn’t be standard offers for customers.
These functional benefits suit generalist stores, because they have economies of scale. They can afford to invest in the support activities (fast delivery, large range, price discounts etc) that deliver functional benefits.
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 reassured customers that’d they always be able to access the product. The “always in stock” was a functional benefit. The “reassurance” was an emotional one.
Example - Amazon emotional benefit
Emotional benefits are tricky in e-Commerce, but not impossible. Bigger e-Commerce brands like Amazon 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. Clearly, neither 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 about 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.
Reason Why and Reason to Believe
The reason why and reason to believe are the justification system for your positioning. It’s why customers should believe what you say.
In your e-Commerce positioning statement, the reason why helps customers understand the benefit. The reason to believe proves the benefit. Together, they justify the benefit.
Reasons why could typically include ingredients, or where and how the product is made. Beck’s Beer, only ever brewed in Bremen, Germany for example.
In e-Commerce, the reason why usually relates to how the online store works. It normally relates to a process or system.
Example e-Commerce Reasons Why include the :-
- best navigation and layout.
- simplest check-out process.
- widest range of delivery options.
- breadth of the product range.
- frequency of price checks.
- some sort of pricing guarantee.
Competitors will try to copy or improve on these benefits. You need to make them unique and defendable. You do this 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. Are you easy and convenient at every stage for example? Or is one part of your order to delivery process better than everyone 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. Setting up your site to remember payment details for example. That’s 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.
You can also bring out this benefit in your order to delivery system. A choice of delivery slots that includes evening or weekend deliveries for example. 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 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
A wide range of products helps attract more customers, but comes at a cost. You need to more stock and there’s more complexity in the order to delivery system. Plus, it’s hard to show you have a wider range than competitors.
To prove you’ve 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 competitive strategy is cost leadership, you need to prove you offer the best value. You can do this by regularly price checking against competitors and making it easy for customers to do the same.
In some categories, third party websites 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 solutions. Services like Edge by Ascential set up automatic monitoring and tracking of competitor prices. You can set up alerts for when prices change.
So, for example if you don’t direct, only 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 summarises 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
E-Commerce world is often very competitive. E-Commerce positioning helps you find the best space in the market to play in, relative to competitors .
It helps you work out how to make your brand stand out against other brands. Use it to decide on the specific position you want to occupy in the minds of your target audience.
There are 5 key elements of the positioning statement – target audience, frame of reference, benefit, reason why and reason to believe.
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.
And of course, contact us if there’s a specific positioning project you need help with.