Last week I elaborated on Pre-sales, which is the first phase of consumer experience. Now it is time to make or spend some money.
Online versus Offline
Let’s say you are in a shop that really appeals to you, experienced a perfect service, fell in love with the product, maybe you are even offered a discount for your first purchase but still hesitate to charge your credit card with such a high amount. You are wavering if you can afford it but another voice tells you that you will regret it if you do not buy this item and on top of all you have to look into the vendors eyes if you turn the offer down. Yes, your ratio tells you that nothing obliges you to buy but subconsciously you feel bad about saying no.
Do you have the same issue with a web-shop? Probably not. It is crystal clear that you are a face-less visitor on a website that is “talking” to a machine.
Comparing these two scenarios it is pretty clear who is more likely to sell. We cannot help it but we are social beings (not all the same as I admit) and people are typically looking for other people.
E-Commerce Is Growing. Why?
Nevertheless, e-commerce is a growing market because it offers some unbeatable advantages: You can buy around the clock from where you want and get it delivered to where you need it. So it saves the most precious resource: time. And if you say “no” you simply close your browser.
In order to really sell a company needs to establish a strategy. To establish a successful one you must know your target clients and of course your products.
Fast Moving Consumer Goods (FMCG)
In my previous article I mentioned Amazon.com; a pure e-commerce business. I daresay that Amazon can basically serve everyone who has a credit card and an address things can be sent to. They were among the first ones who saw the power of e-commerce coming and in 1994 started marketing books electronically. I mean physical books. E-books came later. Meanwhile they can provide everything that goes as FMCG (fast moving consumer goods) and even jewellery.
From what I can see their strategy is a combination of
- A VERY user-friendly e-shop
- Competitive prices
- Fast delivery
- Anonymous which means it is almost impossible to talk to a real person if you need an advice; service is expensive and we want it cost-efficient if we shop with them. (We’ll discuss the post-sales later in the next article)
Diamonds and More.
The trend of e-commerce also has an impact on high-end brands.
Farfetch for instance is an e-commerce platform that offers designer cloths. You’ll find brands like Armani or Alexander McQueen there. Basically, it is a platform that offers an online-market place to independent boutiques of which quite some only survived thanks to e-commerce. Farfetch was founded in 2008 and is a smashing hit. The company who is headquartered in London state on their website to have 1000 employees world-wide and from other sources one learns that there sales in 2016 was about USD 800 Million.
A much older and very famous brand is Cartier. If you visit their website you will find an online shop. The – for Cartier’s measures – relatively moderately-priced items are sold by e-commerce, too.
“Diamonds are a girl’s best friends”, now they are delivered to your letterbox.
Marketing, Marketing, Marketing!
One thing is clear: in the e-commerce business marketing is a very important and maybe the largest cost factor. My favourite Cartier video must have cost a fortune and is worth every penny.