The Technological Background of E-shops as They Grow19.1.2022
With the gradual growth of e-shops, many mistakes occur that many owners are either unaware of or underestimate their importance. Aside from automation, important steps also include communicating with customers or creating the best possible user experience. Let’s run through these points together.
The result of our recommendations should be a well-automated e-shop that is capable of growing and sustaining, or even improving, its efficiency. To start with, let’s take a look at the most common fundamental mistakes that e-shops make when they are growing.
Common e-shop problems
Part of the daily work of many e-shops is the mistakes that administrators frequently make without even realizing it. Here are a few of them.
- High marginal costs – These simply mean that in the end the more the e-shop sells, the more it loses. The sending of each additional order costs you more than the previous one, and with the growth of the e-shop, the losses also thus increase.
- Bad data tracking – Financial statements are usually used by an e-shop to indicate whether it is at a loss or a profit. If these data are poorly tracked, however, they are no longer relevant and problems may occur. With the growth of e-shops, the proper setting of reports and managerial accounting is exceptionally important.
- Unadjusted cash flow – The transfer of capital at a certain time is an exceptionally important point. It is often necessary to pay a supplier’s invoice immediately or even before the products are delivered. This works quite similarly for campaigns and ads on Google Ads and social networks, although they only pay off after a certain time. If no transfer through a payment gateway occurs within the specified time, undesirable complications may occur, which can ultimately lead to the overall collapse of the e-shop.
- Personnel imbalance – Managing five people is easier than managing thirty. If you lose control, you may find out in an audit that some employees are not offering any benefits to the e-shop and are actually of no use to you. It’s important to consider which employees the e-shop really needs and represent money well-spent.
- Bad logistics in warehouses – Logistics can be a stumbling block, particularly when exporting to other countries. It’s necessary to think about reducing costs and finding new – less expensive and faster – partners. A warehouse should be optimally large and optimally arranged, without products remaining in it for years, established at best in the country where you have expanded the e-shop.
Successful growth of an e-shop in seven points
The basis of each electronic sale is a functional e-shop based on specific strategies. It needs to be remembered that it should work equally well in both of its two parts: in the front-end (the part of the e-shop that the user can see directly) and in the back-end (the part that is invisible to the user and used mainly by the e-shop administrator). In addition to the settings themselves, the back-end part of the e-shop also serves for extracting and editing data in databases, which the front-end then shows to the user.
Transition to automation in the ordering process
The growth of an e-shop is necessarily related to growth in the number of customers, orders and returns. Automation can be an important aid, but it is necessary to set it up correctly and not forget about any parts of the e-shop where it can be useful.
Growth in the number of orders is also associated with the growth of the e-shop. While processing ten orders manually is no problem, with a higher number it becomes necessary to start with automation and connecting to other systems (such as automatic transfer of the order to accounting or automatic generation of invoices and sending them to customers).
A similar approach is needed in the area of carrying. You can take five packages to the post office or to a Mail Order service without any problems, but with a larger number, automation is starts to become a necessity.
This product, that order, this label. A larger warehouse should also operate under the supervision of an automated system that informs warehouse workers about an order and helps with the entire process as much as possible, for example, by automatically generating labels. The need for optimisation is also associated with further growth; simplification and speeding up of an employee’s work (for example, faster search in the warehouse, easier packaging).
An increased number of returns also goes hand in hand with an increased number of orders, and these can also no longer be processed manually. An automated system facilitates work not only for customers, who know where to send goods, but also for employees who are familiar with the subsequent steps to be taken.
A foundation for every e-shop, including small ones, is to have all the performance campaigns running (such as Google Ads, Facebook or various comparatives, e.g. Heureka). Even from the very start, it is good to manage large and small campaigns automatically, so as you grow, you can start using other means, such as affiliate marketing or influence marketing. Do you know how they work?
The basis of affiliate marketing is earning money through the mediated sale of a product offered by another company for a certain commission. This is not an easy and passive path to money, however, and even here, proper tuning is needed; the choice of partners or the management of mathematics and calculations (margin vs. the commission that we give to these partners) is certainly important.
Are you able to correctly calculate the level of margin, fixed costs or marketing percentage? You’ll learn about the correct procedure in our article.
In this case, this is a form of marketing, especially on social networks, which is founded on cooperation with people with higher social influence – so-called “influencers”. With influence marketing, the ideal is to introduce an automated remuneration system from the very beginning.
How does it work? Let’s look at a simple example: influencer Marek promotes our products on Instagram and offers his followers a 5% discount on purchases after entering the code marek5. At the same time, Marek will receive a commission of 5% for every single order that comes with this code. The total discount on the order thus rises to 10%.
It must also be remembered, however, that the shopper who entered the influencer code does not necessarily have to come from Instagram. The site may also be accessed from a paid channel (such as through Google Ads). In this case, too, the correct mathematics and overall calculation are important, so that we are not ultimately making a loss due to influence marketing.
If we offer quality content on our website, other sites may link to us, and new potential customers may also come from them. Let’s again take a simple example: if an article is published on a Slovak news media website, where they quote an expert from the text on our website and add a link to our website as part of the source, we have a higher chance of acquiring new customers.
The highest possible display position in search engines such as Google is now extremely important in the case of e-shops. Therefore, it is necessary to have the right keywords covered with quality content, which will raise the search engine rankings and ensure higher visitor numbers and more website traffic. The right start is to perform a so-called SEO (Search Engine Optimisation) keyword analysis, which will show you the right direction when you start creating your own content.
Technical background of the website with higher traffic
Nobody likes a falling, slow-loading and choppy website. But with a growing number of customers, website traffic also increases, and the existing server structure may not be sufficient. To avoid any unwanted technical problems before launching large campaigns, it is necessary to tune the server and test it with stress tests to withstand a higher influx of people at once. It is good to have your servers tuned in terms of capacity so that there will be no problems with many users at once or that it will automatically increase when necessary.
So-called monitoring, domain rating or website authority can also provide you with interesting data. This data represents a number on a scale from 0 to 100 and you can look for it in several online tools. Domain rating captures the importance of your site as a whole in a particular area and can also indicate what you should still be working on.
Communication with customers or Customer Care
Pick up the phone, write an email, monitor social networks – with a smaller number of customers this is no problem – but with hundreds of messages you will need help. This may be a capable individual or a team of workers ready to respond to different types of recurring scenarios or requirements.
One possibility is a telephone chatbot or a voice recorder, which only assigns the call to a specific telephone operator based on information from the customer. The computer robot, in turn, typically offers online question templates to customers, which it can answer on its own or can first analyse itself on the basis of keywords, and when it does not know how to respond can transfers the message to an employee.
Many e-shops also offer a Frequently Asked Questions section on their website, which can help customers resolve recurring problems and reduce the number of informational emails or phone calls.
In the case of Customer Care, it is also important to address the language issue. Communication with the customer should be localised; it is good to provide communication with the e-shop (either by phone or e-mail) for foreign clients in their own language. Forgetting about the language issue is another common mistake of e-shops, and although it is not always easy, you should not underestimate it.
When investing in the e-shop, we should not forget regular KPI performance monitoring, which indicates to use whether the investment paying off.
Make the user experience a pleasant one
Increasing site traffic enables you and opens a path for “playing” with the website, for optimisation and automation. Impressing customers and offering them a pleasant user experience can in the end increase your likelihood of purchase, the popularity of the brand and the possibility of recommendations among friends and Customer Lifetime Value. Coming up with new applications or website features that set you apart from the competition can also be interesting.
Building a good relationship with the customer is an important part of the work of any e-shop, whether with new customers or those who repeatedly return. Many other things can make the experience pleasant for the visitor, including, among others
interesting content – content marketing, which can include creating the expansion of categories, descriptions and texts for products, adding videos, blog articles or infographics
promotion of content through social networks – according to statistics, up to 43% of global products are sold through social networks
communication with the customer – messaging marketing – you can offer automated email campaigns to a potential or an existing customer, and based on previous purchases and his behaviour on the web, guess what might interest him in the future
As close to the customer as possible
Being accommodating to the needs of the customer and offering him what he wants is important for the overall success of the e-shop. There are several options, in addition to a friendly and professional approach.
Expanding payment options
Cash on delivery, bank transfer, Internet payment with a card or gift vouchers. The more options we offer customers, the easier it will be for them to shop.
Faster and cheaper carrying
The more packages that are shipped, the better the price for one of them. However, at the same time it is important to look for carriers, negotiate with them and try to come up with the best possible option. Carrying time is also important, especially in the case of foreign countries, as a several-week delivery time can scare away many customers. The length of waiting for the product is therefore also a crucial factor for the potential customer.
“Did you know that one of the primary reasons for leaving the online cart is the high shipping price? This is the case, according to interesting statistics from the USA.”
A customer system
You know this. You have a customer card; you collect points or you have every fifth coffee for free. The loyalty or reward system gives customers a sense of importance and belonging and a special personalised approach. This can provide a variety of discounts, gifts or special limited products that they can buy first. With the right settings and attractive offers, they will be happy to return to you. But again, we emphasise the importance of mathematics so that these satisfied customers do not lead to e-shop losses.
An ecological, sustainable and social approach
For many customers ecological and sustainable practices that e-shops should strive for are also important. The use of recyclable materials or the reuse of boxes may help not only in terms of the number of customers but also the planet. Many e-shops also put a social approach at the forefront – they offer customers the opportunity to round off a purchase and contribute to a charity or donate a specific percentage to an organisation for a certain amount of purchase.
Expansion of the e-shop abroad
With the gradual growth of an e-shop, investments should subsequently be directed to expansion to other countries. Don’t forget to thoroughly analyse the basic data of a particular country; for example, the Google Market Explorer tool can be helpful. Do you know which data are most important to you? Don’t forget the following.
- Purchasing power
- The growth trend in the category you do business in
- Current customer interests in a given category – Search Volume
- Google Ads cost-per-click-through
- A survey of the competition (how many competitors and which foreign market offers)
Expanding abroad is definitely not just about translating the site into another language; it is necessary to prepare for the fact that entering a new market will require a higher investment. It is necessary to handle the establishing of a warehouse, the provision of carrying or the offering of payment gateways. Resolving VAT and customs issues in the country is also important. And since your brand may be utterly unknown to customers in foreign markets, it will be all the more difficult to make a conversion between well-known and well-established brands.
Don’t forget that each e-shop is separate and individual, and there is no universal guide or map of the path to e-shop growth. We therefore offer you an individual approach; we can consult, help you with the choice of the right suppliers and recommend and start implementation. Don’t hesitate to contact us!