Why read this? : We share 12 different e-Commerce capability areas covering skills, processes and systems you need to succeed at online selling. Learn what you need to support key e-Commerce activities from identifying the opportunity to driving sales. Read this to learn how to build your e-Commerce capability plan.
Online shopping seems easy if you’re the buyer. Pick what you want on the store website. Enter your details. Wait for the product to turn up. Easy.
But it’s hard work for the online seller to deliver that easy experience for shoppers.
So let’s look at the 12 capabilities you need to support the 5 steps of the e-Commerce planning process.
Step 1 - Identify the opportunity
The process starts with identifying the opportunity. You have to find out what customers need. What they really want from e-Commerce. You’re looking for unmet or poorly met customer needs.
With unmet needs, you use marketing innovation to create a new way to meet those needs via e-Commerce. With poorly met needs, you look for a better way to meet those needs. You focus on finding your on your e-Commerce competitive advantage. (see also this article for more on customer needs).
You identify these opportunities using :-
- market research.
- data capture and analysis.
- test and learn approach.
E-Commerce capability 1 - Market research
One way to find opportunities is by talking directly to customers using market research.
This usually starts with qualitative research. You do 1-2-1 or focus group interviews. You ask questions about why customers do what they do, and explore their attitudes, behaviours and motivations. This gives you ideas about what they need.
Then you quantify and validate the ideas with quantitative research. You test the ideas with a statistically representative sample of customers to predict how the total market will behave.
The e-Commerce capability here is knowing how to run the market research process. How to ask the right questions and convert the answers into action plans. It sets you up to create experiences based on actual customer needs. But, there are also other ways to find out what drives online shopping.
E-Commerce capability 2 - Data capture and analysis
You can also use marketing technology to find opportunities in e-Commerce.
Technology captures digital data when customers interact with you online. You can use that data to measure and analyse what customers do.
This analysis helps you come up with new ideas about what online shoppers need and want.
With data, you’re observing what people do online, rather than asking them. In traditional market research, the way the researchers ask questions can add bias. Looking at digital data helps you reduce this.
For example, say you want to understand how customers decide between quality and price.
If you ask someone this in research, they may worry you’ll think them cheap if they say the always buy the lowest price. So they may lie, and say they choose on quality. But use online shop data when you run a price discount, and you know exactly how many people buy on price. The data shows you what research can’t.
This e-Commerce capability is driven by 2 skills. First, managing the marketing technology to capture the data. For example, looking at search trends and using tools like Google Analytics to see how customers interact with your website. Then there’s data analysis skills. Organising the data and looking for relevant insights which will bring the idea opportunity to life.
E-Commerce capability 3 - Test and learn
The final way to find opportunities is with a test and learn approach. This is a quick and relatively cheap process where you test prototypes or mock-ups with small groups of customers. You learn from the feedback you get. To come up with these ideas, you look for inspiration using :-
Creative thinking uses idea generation techniques like brainstorming to generate test and learn ideas. Ideas can come from anyone in your business. (see also our generating creative ideas article for more on this).
It’s driven by setting up a creative culture which encourages ideas.
Secondary research looks at existing research and information to find opportunities. It’s usually from published sources like government statistic sites, market research companies or other online sources like Google Trends.
To win new customers, you have to influence them to do something different to what they do now.
Behavioural science is a skill that helps you understand how people make choices.
For example, what biases drive their choices. What habits they have which you can tap into or try to change. Understanding how choice and behaviour works gives you many ideas to test out.
(see also this article on Choice for more on this).
As we said, you test your ideas with controlled experiments with small groups of customers. You develop prototypes, mock-ups and concepts to test. You learn from the results.
For example, you send different messages to different customers in your CRM program. You test different images, text or layouts on your store website. (see our quick and easy copywriting article for ideas on how to do this). You ask a few customers to test out an express delivery system.
The idea is you start small, quick and cheap. You get direct feedback from customers before you spend lots of time and money. You use these results, plus your market research and digital data insights to then move to the next step.
Step 2 - Validate the opportunity
Next, you narrow down your ideas list. You can’t do everything. So you prioritise ideas based on :-
- Level of resource needed (time, budget, people).
- Number of customers impacted.
- Expected changes in customer behaviour.
- Competitor presence and likely response.
- Additional capability (skills, systems, processes) required.
E-Commerce capability 4 - Go agile
The opportunity size often determines how you validate it.
For small opportunities, you can use an agile approach. Small in this context means opportunities which can be set-up and tested quickly at low cost.
When you manage your own store, you can use agile as an e-Commerce capability to keep improving your site. For example, changes to your sales copy and product pages. Small agile teams can test lots of small ideas quickly. You validate the opportunity based on how customers respond to it.
E-Commerce capability 5 - Business cases
Larger opportunities need a business case, though. They need more resource – they cost more, involve more people and take longer to do. So, you have to persuade people it’s the right thing to do.
The business case helps you do this. It’s the “story” of the opportunity. It helps people understand what resources you need and why, by sharing your research, data, analysis and plans. You show what you expect to happen, and why the business should support you.
Business case content varies by company and context. At minimum though, you’ll need a clear financial plan. This will include an e-Commerce forecast and profit and loss. The returns have to be big and fast enough to justify the resources needed.
You should also outline all operational support needed to deliver the idea. This will cover resources like time, budget and people. The leadership team needs this to understand what’s required.
Business case writing is an important e-Commerce capability. It builds confidence in your idea. It helps you secure resources. And it tells everyone what the plan is. Clearly, you need all those to move forward.
Step 3 - Channel plan
In this next step, you decide on the e-Commerce channels that best suit the opportunity.
You decide what you’ll do in each channel, and that means you need a channel plan. Both an overall plan and a plan for each channel you use.
Each of the five e-Commerce channels comes with different levels of control and complexity.
So, which you choose influences the e-Commerce Channel Plan capability you need. The more control and complexity you take on, the bigger the reward.
E-Commerce capability 6 - Manage Marketplaces / Print on Demand
In these channels, you sell though third-party online selling platforms.
For specific printed items (e.g. T-shirts), print on demand (POD) suppliers like Redbubble and Spreadshirt sell your designs on pre-made merchandise items. You sell on their platforms, or create links via your own website.
These channels are easy to access. The marketplace and POD suppliers usually manage payments. Sometimes they’ll also manage delivery for you.
E-Commerce capability 7 - Manage online retailers
If you work with online retailers, you’ll need account and category management skills to manage the relationship with them. This e-Commerce capability applies to both bricks and clicks and pure players. Key skills include :-
- understanding the retailer’s strategy and way of working.
- working with shopper data and insights.
- building category plans.
- negotiating commercial terms.
- building strong relationships with buyers.
- dealing with issues.
E-Commerce capability 8 - Manage Dropshipping / Direct to Consumer
The final channel options are dropshipping and direct to consumer (D2C). Each requires very different e-Commerce capabilities.
With dropshipping, you act as an online store front for suppliers (often based overseas, particularly in China). It works like this. Shoppers order from your website. They pay you. You forward the order on to the supplier. You pay the supplier. The supplier sends the order to your customer.
This approach means you don’t produce anything yourself. You don’t pay for stock and you don’t have to arrange the delivery. The supplier handles all this.
Sounds great. But it comes with 2 new e-Commerce capabilities. First, you need to be able to find the right supplier who can manage your orders efficiently.
Then, you also need customer service skills when things go wrong with orders. Your customers think they’re buying from you. You take their money. If something goes wrong, it’s up to you to sort it out.
With direct to consumer (D2C), you manage ALL elements of the online selling experience. So, you need ALL the e-Commerce capabilities we’ve mentioned so far, plus the day to day management of the online store.
D2C is the most complex channel, but it also gives you the most control. Check out our guides to setting up your own online store for more on D2C.
Step 4 - Create online shopping experiences
Your channel plan sets where you’ll sell. Now you need to work out what and how you’ll sell. That’s all about your marketing and creative skills that help you build online shopping experiences for customers.
E-Commerce capability 9 - Experiences on someone else’s site
Those sites have controls, systems and processes which you’ll need to follow. As a result, you have less control over what and how you sell.
For example, they’ll usually have a product information system to manage basic content.
You’re responsible for managing your product names, images and descriptions on each product page, for example.
You need to know what makes a good product page. For example, how to source good photography and use photo editing tools to make products look good. How to write clear sales copy. You also need digital media skills like search and social media to drive customers to the page.
But you can only advise and try to influence designs, layouts or formats of your pages. That can be difficult.
For more advanced online shopping experiences, you need to work directly with the shop owner. That also takes some skill. You’ll need to negotiate deals with them. You need to build a good working relationship.
Creating shopping experiences on someone else’s platform is an e-Commerce capability in its own right.
E-Commerce capability 10 - Experiences on your own site
When you manage your own online store, you control all parts of the shopper experience.
You’ll also need to be able to manage the whole order to delivery process. There’s a lot involved in that.
For example, you need to manage payments. Not just when the customer pays, but refunds and price discounts too. You need supply chain systems to move orders from the warehouse all the way to the last mile and the customer’s doorstep. And you need customer service systems to deal with delivery issues.
As we said, there’s a lot involved in creating the whole customer experience on your own site.
Step 5 - Sell online
The final step of the e-Commerce planning process is to start selling online.
Everything you’ve done to this point sets you you up for success. But you’re not quite done yet. There’s 2 final e-Commerce capabilities you need to factor in.
First, you need to know how to improve the customer experience. And then you need to build the right set of attitudes.
You need both to help you sell more online.
E-Commerce capability 11 - Improve the customer experience
In online selling, you’re only as good as your last sale. You need to keep improving the customer experience if you want customers to keep coming back.
Go back to the e-Commerce capabilities of market research, data capture and analysis and test and learn. Use these to find new ideas. What’s working and what isn’t? Do more of what’s working and cut out what isn’t. Sounds obvious, but many businesses don’t do this.
What are competitors doing? How can you outperform them? Look at ways you can improve the experience to make customers prefer what you offer.
Don’t be afraid to remove unnecessary steps. Reduce the number of clicks and options to choose from when customers are ready to buy.
Review your activity on a regular basis. Smaller opportunities, you can review every 1-2 weeks. Review bigger opportunities every 6-12 weeks. Try to work out which ideas and activities make the biggest impact on performance. Double down on those. Keep improving.
E-Commerce capability 12 - Attitude and resilience
Plus, not every idea works out. That’s normal. It’s a percentage game. You learn from success. But you learn from your mistakes too.
That’s how you keep the right attitude to grow your e-Commerce capability. You stay positive, even if things go wrong. You build your resilience. And you keep a level head when things go well and bounce back when they don’t.
Conclusion - E-Commerce capability
To sum up, each step of the e-Commerce planning process has different capability needs.
How you validate the opportunity depends on its size and complexity. An agile approach is great for small opportunities. However, you need business case skills writing to go after big opportunities.
The channel plan sets out where customers will buy you online. In some cases, you sell via third parties. As a result, this means you need to manage relationships with online retailers. You have less control. Direct to consumer on the other hand gives you the more control but also more complexity. You manage every part of the e-Commerce process yourself.
Setting up and managing all these skills and processes can be a challenge. So, most of all, you need a positive attitude and the resilience to deal with both success and failure on a regular basis.