Let’s go! – by Stefanos Vasdekis A blog about entrepreneurship, the web2.0 world, and life.


An ecommerce battle in a small European country

In a small European country 10 teams build 10 new ecommerce stores selling similar products. All of them believe that their store will be a huge success, but only one will be a big success and another two will survive three years later. There will be some consolidation down the road, but no more than 3 teams will ever merge as the market is small and no team is interested to give up control and settle for a tiny percentage even at the most successful store. All teams have a different strategy, let's have a closer look:

#1 is the typical retail store that wants to start selling online. Their strategy goes like this: "We know the customer better than anyone else, we know how to help him choose the best product for him and we're experts at customer support. Now we'll bring this level of service to anyone who is far from our store."

#2 is a wholesaler who wants to avoid conflict with his customers, the retail stores, so they build their online store under a different brand and never admit publicly that it belongs to them. Their strategy goes like this: "We'll sell online at the same prices we sell to our retailers, so we'll have the best prices in the market. We might not know the end customer so well and we might also not know a lot about marketing, but people will find us and buy from us because we'll have what they're most interested in: the best prices."

#3 is a team of three marketing experts who have a good understanding of the industry and have just left their jobs in big companies to build this ecommerce store. Their strategy goes like this: "We'll find the best name for our store, the best slogans, the best colors, etc... We have so many contacts in the press and the bloggers community that everyone will be talking about us when we launch. We'll also use all known tools like cross selling, up selling, limited discounts, coupons, incentives, etc... and our creativity will make the difference."

#4 is an established ecommerce store selling different products. Their strategy goes like this: "We might not know the industry, but we have learned so many valuable lessons on selling online that we can apply them to any industry. Time to grow and become an ecommerce giant."

#5 is an established ecommerce store based in another European country selling the same products in some European countries. Their strategy goes like this: "We will hire someone to do the translations and the support and add more people as the business grows. We will offer our new customers a wide range of products they cannot find in their country at very competitive prices. Shipping cost is not a big deal. Anyway we have already applied this model to other countries successfully."

#6 is a local web development firm. Their strategy goes like this: "We build ecommerce stores for our customers for years, we know internet better than anyone else and it's time we built our own store. It will have the best user interface, it will load fast and will have many useful features that will amaze our customers and make them want to use our store more than once."

#7 is a local search engine optimization firm. Their strategy goes like this: "We'll dominate organic search results and will bring to the site thousands of free clicks when our competitors will be paying each and every click. Because of SEO we're also experts at tracking, so we'll track all our visitors activity and get the industry knowledge that we now do not have."

#8 is a team built by a serial web entrepreneur backed from angel investors and venture capitals. Their strategy goes like this: "We know what an internet startup needs and we have done this before, so we will do it once again. We'll try to make some strategic deals to cover our weaknesses."

#9 is a team built by a very wealthy individual who sees an oportunity and does not want to invest in another company. Their strategy goes like this: "We'll offer the best wages, so we'll attract the best people. We do not care about making a profit the first years, so we'll sell at cost and throw a lot of money on advertising to make this store a success. It is also a matter of prestige to make this store look like a success."

#10 is an established local brand who has already expanded to several industries and also owns an advertising company. Their strategy goes like this: "The easiest way to enter a new industry is online. Our brand is strong and people will want to buy from us from day one. But this is not our only advantage, we know that consumer products all they need is advertising and through our advertising company we can buy at the very best prices in traditional and new media."

Who will be the winner? In my opinion the only sure winner will be Google, as all teams will spend heavily on Adwords. The other possible winner will be the team who uses Magnet Commerce as their ecommerce solution (self promotion). No seriously, all strategies look promising, but they're not enough to succeed, it's people, execution and some luck that will make the difference...

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