Ecommerce has emerged as a popular and superior alternative to traditional brick and mortar retail. The convenience, special offers, discounts, and extensive product range make it hard to resist. However, the competition in the ecommerce industry is becoming increasingly challenging, making diversification essential for long-term sustainability. Expanding the product portfolio and offering a variety of options is crucial for ecommerce businesses. Although easier said than done, here are a few key tips on how to diversify your ecommerce store:
Understand Your Target Audience To expand your ecommerce business, it is vital to research and identify your niche. Invest significant time, money, and effort in understanding your customers' needs and how to fulfill them. Conduct primary research such as surveys, interviews, and focus groups to gain valuable insights. Utilize online resources for secondary research, as the internet is a vast source of information.
For example, if you plan to open an online store selling health monitoring wearables in India, conduct in-depth research to identify customer needs and market opportunities. Consider affordability factors and price sensitivity in a middle-income country like India. Additionally, explore potential B2B customers such as hospitals and clinics as another niche for your business.
Overcome Marketing Myopia Overcoming marketing myopia is essential for expanding your ecommerce business in various directions. Avoid a short-sighted, inward-looking approach that solely focuses on the company's needs. Instead, define your company and products based on your customers' needs and wants. Put the customer at the forefront and think about ways to better serve them.
For instance, Kodak's myopic view that they were solely in the film business led to their downfall. They failed to realize that customers were buying a record of their memories, not just cameras and film. By understanding customers' desire for storytelling and providing the quickest and easiest tools, the world of cameras shifted to the digital format. Similarly, as an ecommerce business, emphasize that you offer the convenience of shopping from home and access to a wide range of products.
Invest in Strategic Branding & Marketing In the highly competitive ecommerce industry, adopting an omni-channel marketing strategy is crucial. As you diversify your store's product offerings, effectively communicate these changes to potential customers. Learn from successful ecommerce giants like Amazon, Flipkart, and Alibaba, who have a strong presence across various marketing channels. Build a brand that attracts customers and spread your message through both offline and online marketing, including social media platforms.
Establish Strategic Partnerships Establishing strategic partnerships is one of the most important ways to diversify your ecommerce store and expand your business. Consider collaborating with competitors through marketing partnerships or forming partnerships with manufacturers who want to sell their products on your platform.
For example, the recent partnership between Microsoft and Indian ecommerce giant Flipkart saw Flipkart adopting Microsoft Azure as its exclusive public cloud platform. This collaboration enables Flipkart to reach more customers and allows Microsoft to penetrate the Indian market segment.
Adopt the Drop-Shipping Model Adopting the drop-shipping model, as seen with Alibaba and Amazon, is a key way to diversify and expand your online business. In this distribution model, instead of maintaining a large inventory, you partner with suppliers and list their products on your website. When a customer makes a purchase, they pay you the retail price, and you pay the supplier the wholesale price, making a profit. This model allows you to offer a wider range of products without the risk of inventory management.
By implementing these strategies, you can successfully diversify your ecommerce store, ensuring its long-term growth and sustainability.
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