About this Guide
The goal of this guide is providing practical data on actions that can have a positive impact on store performance in competitive online environments. These are fundamental aspects that should be considered as an integral part of the daily processes of any e-commerce willing to optimize its performance in the short and long term.
Introduction: E-commerce sales today
E-commerce has evolved a lot since its inception and that evolution has led to major changes in the configuration of retailers’ current strategy.
The different business niches have grown considerably and new competitors have been appearing in sectors where the level of competitiveness was very low previously. The great offer of the same product by multiple vendors can be an advantage for the end customer, who will decide which option is the most convenient one. However, this fact is not so encouraging from the perspective of retailers, who need to refine its strategy and acquire competitive advantages to achieve a differentiation with respect to the rest of their competitors.
In many cases, it is very difficult to achieve such differentiation, as the most common scenario is one in which several retailers compete with the same product. So how do you achieve differentiation when the offer is identical? Many experts say that differentiation can only be achieved in two ways: either because of the value of the product, or because of offering an attractive price compared to the rest of competitors.
There is no one-size-fits-all strategy, but there are common strategic points to take into account
It is clear that there is no universal e-commerce strategy. In fact, it will be the type of product, the demand, the stock, the promotions, the customers’ reviews and the industry itself that will really condition the necessary business actions.
As partners specialized in pricing analysis, we face new scenarios in different e-commerce sectors and try to develop solutions that respond to the current needs and concerns of online retailers in highly competitive environments.
That is why, we have developed this sales acceleration kit to provide practical insights into actions that can positively impact store performance in competitive online environments. These are fundamental aspects that should be considered as an integral part of the daily processes of any e-commerce that wants to optimize its performance in the short and long term.
Challenges and achievements in sales acceleration
At netRivals we work together, on a daily basis, with e-commerces from different sectors. For this reason, we have compiled the set of strategies detailed in the following sections of this white paper to help shed some light on recurring doubts and concerns in the field of online retail.
These are a series of points that do not have to be taken as obligatory. However, they do help to reach some of the most common and, even so, more complex challenges in the current retail picture. These are actions that aim to positively impact the day-to-day of e-tailers and achieve improvements in the following points. Provided they are approached in the right way and bearing in mind that perhaps they will be applicable in different ways depending on the type of business and sector. There may even be a situation where some point does not fit into your e-commerce strategy or it is not a high priority for your business:
The evolution and growth of sales.
Profit margin optimization.
A wider and more detailed vision of the market(s) where your business operates.
Greater control of the strategies developed by the competition.
Faster reaction time to the pricing actions of direct competitors.
The possibility of developing new strategies that positively influence the competitive image of your business.
Saving time in management, visualization and optimization.
5 Essential Steps to Accelerate Sales
Achieving the desired acceleration in sales requires a few previous steps. This is an analysis phase that will allow you to know the status of your e-commerce and establish what are the obstacles that are holding back your growth.
In this phase we will analyze the following aspects:
Overview of competitors
Positioning of the business
A subsequent competitive analysis cannot be carried out if the main markets for your e-commerce are not clearly defined.
In order to detect such markets, you must first find out in which countries your sales volume is concentrated and which is your target audience. First, do the exercise of thinking about which markets your business is focused on and then confirm with the analysis tools you have for your e-commerce if that vision corresponds to the reality of your markets.
Questions for market analysis
The following questions can help you establish an order in your market analysis:
Are most of your e-commerce operations concentrated in one country?
Are these operations spread across different countries?
In which of these countries is the largest number of sales concentrated?
Do the markets in your analysis match your initial market vision?
Are there any discrepancies between your initial vision of competition and the reality of the market?
Are sales happening in markets with different currencies or with the same ones?
Once you have a well-defined list of your main markets, you will be able to establish whether those markets correspond to those contemplated in your strategy.
Use market data to optimize your strategy
If there are discrepancies, you should include them in your action plan, either to reduce or increase your efforts in certain markets.
Without a doubt, dedicating time to detailed market analysis gives you a much more complete picture of the direction your e-commerce is going, as well as a detailed picture of your ideal audience/customer. In the same way, this previous step should not be understood as a task that consumes your time, but as an advantage to define more effectively the future strategy of your e-commerce.
Once we have completed this first phase, we will be ready to move on to the next part of the process which is competitor analysis.
After the market analysis you can continue with the analysis of the competition. We recommend that you do not reverse the order of these steps, as you will not really be able to establish clear competitors if you do not have a real vision of the markets in which your e-commerce operates.
Questions for competitor detection
The following questions are very useful to evaluate the presence of e-tailers/online shops in your sector and the extent to which they constitute your direct competition.
We have divided these questions into different sections according to the level of depth and progression of the evaluation of competitors:
Inclusion or exclusion of competitors by market and sector
In which markets is there a greater number of e-commerces in your sector?
Which e-commerces have a more differentiated/unique offer? In other words, which of those online stores offer unique products that can’t really compete directly with your catalog?
Which of these e-commerces have a catalog similar or identical to yours and, therefore, can constitute direct competitors?
Detection of potential competitors
Which e-tailers or online stores have a higher catalog affinity?
What e-tailers offer a catalog with prices similar to yours?
What e-tailers offer a catalog with noticeable price differences?
Evaluation of direct competitors
In case of price disparity: which stores are offering a similar offer at a lower/more competitive price?
Which of these stores have a similar catalog at higher prices?
Is there the same price line in the whole catalog? In other words, have those catalogs prices that are higher or lower for most products? Or is there a remarkable disparity within each of the catalogs?
Detect and react to potential threats and market opportunities
After evaluating whether or not there is a significant price disparity among catalogs, you will be able to establish whether you are in markets with a high level of competitiveness and what position you occupy in them.
This information is key both to detect possible threats and to develop strategies that allow you to react appropriately to the situation of the sector and adapt your catalog to sector demands, without negatively affecting the performance of your e-commerce.
Analyzing your product catalog is also an indispensable part of the pre-sales acceleration stage.
This analysis is especially important in very competitive markets where it can be very useful to observe how your catalog behaves compared to that of your competitors, especially in the following product areas:
It must be taken into account that, in the majority of cases, these are identical products, and therefore there can be no differentiation based solely on their characteristics. Then, how can you achieve that point of difference between you and the competition? There are several alternatives and some of the ways to capture the attention of the customer may be those discussed in the following section.
As we mentioned earlier, it is most common for retailers in a given field to compete with the same product. This makes it essential to mark some differentiation points that can be established according to the following areas: price, promotions, stock and customer service.
The price exerts a great influence on the purchasing decision. For this reason, you must decide at what price limits you can place the products available in your catalog.
It is very important to bear in mind, at this point, the product cost price plus the various expenses arising from its acquisition and subsequent logistics actions. These data are what will allow you to decide to what extent you are willing to lower the price, if you want to maintain a strictly competitive strategy in terms of pricing, without applying any other differentiation action in the presentation or promotion of the product.
Use market information and don’t risk your margin
However, it will be essential that you have very clear pricing limits with which you can play with your catalog, if you do not want to jeopardize your profit margins later.
Another effective way to promote your product, always considering that we are talking about differentiation strategies for identical products, is to look for presentation alternatives. In other words, a competitive price is a great demand in most cases, but when the price margins do not allow you to match the competition you can look for other ways to capture the attention and interest of the user.
It’s about creating a more competitive image of your store through tactics that help change the perception of value-product of your customers. For example, you may have already studied whether you can reduce the price for a particular product and be more like your competitors, but that alone will not help the potential customer to decide between your store and the competition. However, if you also want to offer some kind of additional promotion or discounts on future purchases you can earn more points in favor so that the customer finally chooses your e-commerce.
There are several options to achieve this effect:
Accumulation of points for future discounts or discounts of a certain amount for future purchases.
Discounts at checkout for orders of a specified amount.
Gifts associated to a product purchase.
Discounts on a specified product line.
Free shipping for any order or orders by a specific amount.
Discounts on urgent shipments for orders on a certain amount.
Any other advantages/benefits associated with the purchase of specific products or any purchase in your online store.
After all, it’s about finding ways to create a bond with the customer, to gain their trust. There are a lot of e-commerce out there, the competitiveness does not stop increasing and you have to try to provide the customer what they are looking for, in optimal and immediate conditions.
Another way to expand your sales reach is to offer enough stock to cover orders for high-demand products.
There may be price discrepancies with your most direct competitors and you may not be the most competitive option in Google Shopping. However, the end customer wants to buy something and receive it immediately. If the rest of the stores in the market offer prices discreetly lower than your e-commerce, but fail to serve the order in a short period of time, or even if they serve it on demand, they may lose the ability to close sales for that product in question. On the other hand, if your e-commerce serves that product immediately or in a period of time significantly shorter than that of your competition, the chances of the purchase being closed on your website are higher.
Gain competitive advantage not only in the price range, but also in the way you serve the product.
Customer service is what closes or consolidates the user experience in your e-commerce and, in turn, responds to or compensates for deficiencies that may have arisen during the purchase process.
Good customer service compensates for any shortcomings that may have arisen during the purchasing process.
In cases where both online and offline channels coexist, it may be easier to empathize with the customer offline. However, in purely online businesses, where there is no direct contact with the customer, it is much more difficult to define this bond of trust.
For this reason, it is essential to define a good strategy of action in the area of customer service, especially in the following points:
Telephone. The user is always looking for a way to contact you or your customer service colleagues directly, and that direct route is, in most cases, the telephone. Even if the user has a specific area for tracking their order and a FAQs or help section on your website, if they cannot find what they are looking for in the previous resources, they will always seek direct help from someone on your team to resolve their doubts. It’s important that your e-commerce has a dedicated team that give answers to the requests and questions of your customers quickly and in a wide schedule. Remember that your customers will make their purchases outside working hours and will consult about their order in those time slots. It is important that when they contact you they do not find themselves with a deficient service, constantly busy lines or very reduced opening hours. If a customer feels unattended by you or feels that he has not been given the expected service, he will not trust your e-commerce again. You only have one opportunity to demonstrate the value of your service and the offer of your products, so don’t waste it.
Message/Web Chat. It is always an option to have a chat that opens on your website and accompanies the user in the purchase process in case they have any questions. It is a simple, immediate and visual way to show the customer that they are accompanied. The user may not eventually use it but it is important that they can access it, since, unlike the offline experience, in the online environment the user has no other person with whom to interact, empathize or expose their doubts.
Direct contact via email with the customer service department and subsequent assignment of the customer to a specific member of the team responsible for the user experience. It is necessary that your e-commerce has several ways of contact that allow the user to reach you in one way or another, and email remains one of the main ways. Refer users via a general help email address to specific members of your team who can give them more personalized help.
Customer area. It is extremely important that your users have an enabled area where they can always check the status of their order or even confirm if they have received a response to a complaint or request they have sent. Don’t fall into the trap of neglecting this aspect of your business. If the user is already well informed from the beginning of the purchase process, this will make the rest of the experience much easier and more fluid. If, on the other hand, the information is null, inaccurate or out of date, the user will feel a sensation of little transparency that will damage your credibility. That will make it very difficult to regain the trust of that customer and will make you lose the possibility of loyalty.
If you want to find out what is the real position of your e-commerce in the market, you will first have to be very clear about the points we have already mentioned before:
Market or markets where your e-commerce operates.
Group of competitors according to various criteria such as countries of operation and catalog similarity.
Sales strategy and differential points of product presentation.
State of stock and demand for top-selling products in your catalog.
Once you have this information, you will be able to define a more efficient sales strategy that will facilitate the desired acceleration in sales of your business.
However, how can all this information be collected and kept up to date? There are tools that make it possible to share this data and facilitate the management of pricing and market analysis in an automated way. In this sense, it is important that the tool of your choice has the following characteristics/functionalities so that your daily price analysis and management does not become a burden for you or your team:
Automated and daily analysis of your pricing against your competition.
Management of multiple stores in multiple markets.
Analysis in Amazon and optimization of campaigns in Google Shopping.
Intuitive platform with multiple functionalities to optimize the performance of your e-commerce.
Attention and training of the tool by the customer success team.
At netRivals we work with e-commerces from multiple sectors in very competitive environments to offer them the necessary data to speed up their pricing decisions and daily workflow. Hundreds of customers have already experienced improvements in sales and reaction time thanks to the benefits of netRivals price intelligence. If you would like to receive more information on this subject, please do not hesitate to contact us via our website or on the following telephone number: +44 2037 690319
Data to Win.
netRivals Price Intelligence Software