Why ease of access to e-commerce will make it increasingly difficult to sell online and what to do about it
Platforms like Shopify are enabling anyone with an idea to pop up a shop and start selling globally. For world economics, this is amazing. For you the shop owner, it poses a unique challenge;
How do I stand out from the crowd?
A great piece of advice told to me by a mentor was, “The biggest lie you can tell yourself is that you are original or unique.” It may seem like painful or harsh advice, but it’s true. If you invent a successful product, someone will follow. If you deliver a unique service, others will offer it.
The reality is over the next few years the ability to master your differentiation is how you will enable success
To demonstrate, let’s use the case of how Five Guys crept and took market share from McDonald’s.
Table of Advantages
In the beginning, McDonald’s advantages seem overwhelming. They have a bigger marketing budget, more physical stores, lower costs in the supply chain, a lower price and at the time, more trust and affinity in the marketplace.
Five Guys was undeterred. How did they differentiate? Five Guys delivered on laser like focus offering only the highest quality burgers and hot dogs, but perhaps the biggest way they could differentiate was its customer experience offering.
Have you ever eaten at Five Guys? Have you ever wondered why you can have unlimited all you can eat peanuts there? Have you ever ordered a small fries? It’s basically a small cup in a bag engulfed in fries because they don’t care what size you order, they heap a shovel of them into the bag.
In that small moment, Five Guys has differentiated itself from the competition. Let’s not debate the flavor of the food (I’m a Five Guys person myself), but rather the experience and offering Five Guys gives any customer who walks in through their doors. Pleasant surprises win customers. At Five Guys, you get a feeling that you got more than you asked for. At McDonald’s, depending on your taste palette, you feel like you got less than you asked for. This experience differentiation allowed a startup in a commodity business to take market share from a titan.
E-Commerce is surprisingly similar. Your product is often not enough. Your actual website needs to convey a message of differentiation to stand out. I think it’s safe to assume that 99% of the first time visitors to your site also visit other sites to look for a comparable. So if a customer can’t touch the product, can’t smell the product, and doesn’t have the patience to read and take your words as truth, how do you differentiate?
Pop-ups with a promotion or a section of your site dedicated to promotions are two sound methods to differentiate from a competitor. It’s the reason why Amazon, Target, and Best Buy have all created unique deal or coupon sections in their websites. They drive “value” buyers to those sections, and drive the rest to the primary sections of the store.
However, there is an even more effective offering than a discount to lift the customer experience. In my opinion, giving something tangible for a limited time is one of the more effective ways to differentiate yourself from others.
It makes for a more compelling offer because the customer gets 2 items for the cost of 1 item. It does not matter how small the free item is. It matters that the item delivers a great experience. The best part is you can control your costs in the offering. Here is a case:
Spirare surfboards handcrafts surfboards and accessories. They produced surf fins made from reclaimed materials that were popular, but not popular enough. Eventually the sales diminished and they were stuck with excessive inventory. Instead of offering the discount on the fins, they offered them with the purchase of a new surfboard.
A new surfboard averages $950 MSRP. The fins carried a $30 cost. They did a test on two different landing pages with two offers.
When working with Follett books, a business managing college bookstores around the country, we executed a promotion that gave away free coffee if you brought a mug. Several of the students who entered the bookstore didn’t have a mug, so they bought one. The coffee was at the back of the store, so customers were browsing products as they headed to their coffee. On the table were vouchers for discounts online and in store. During the week, the stores that delivered this experience lifted sales by over 40% compared to other stores. The best part, the cost of brewing coffee was set at approximately $11 a pound.
The stores averaged 5lbs of beans a day during this promotion. $55 a day seems like pennies when you lift sales by 1,000’s. $55 a day seems like an even better price when students where Tweeting, Instagraming, and Facebooking images of free coffee at the bookstore to everyone else. In that moment, a delightful offer changed business for the better.Needless to say, Spirare surfboards saw the value of using a product for the promotional offering rather than a discount. Not only did it net more sales and total revenue, but the cost of the discount was less, and yielded more gross revenue as well.
Differentiating yourself isn’t a huge ordeal. Finding something that you can deliver to a customer that brightens their day may be all you need. Offer something special and unique to your store, put a limited time basis on it, inform the visitors, and convert them to customers.
About Albert Chou
Albert is Chief Innovation Officer at social marketing software platform Expion and has clients such as Oreo, NBC Universal, and Estee Lauder. His passion for small business owners fueled him to start Droparoo, a Shopify sales and promotions app.