David versus Goliath. Or also: How Amazon, Zalando and Co. push all other shops out of the market. Apparently the online world consists only of black and white, right? In this article we would like to deal with the “layer in between”. In doing so, we will remove myths and show what the true revenue levers in e-commerce are.
3 Myths of e-commerce
Due to the industry’s focus on the large suppliers on the market and their obvious, “superficial” advantages, some statements have meanwhile become established which are frequently and gladly taken out of context. But precisely without the necessary context, this results in a very shifted and one-sided picture of the market situation.
Myth1: Online shopping is only about price
Somehow that’s true, isn’t it…? Countless price comparison portals have sprung up in recent years and suggest to users that you should always compare, so that you are not cheated.
3 online shops, one price. How can you decide?
3 online shops compete with exactly the same price for the favor of the user. And each individual has good reasons why the user should buy from him. But not the price. Also it is meanwhile a more or less open secret that Amazon, Zalando and Co. do not belong frequently to the most favorable offerers. Nevertheless, they are among the market leaders in their respective segments, which would invalidate the focus of the rigid focus on price.
Myth2: Users need maximum choice of products
Yeah, there’s another partial truth hiding here, too. Certainly users want to compare products and expect a certain selection. However, we know from innumerable studies that users stumble with their decisions when the assortment is too large.
Paradox on Choice is the name of this effect (described in detail in our video “Paradox of Choice”). It is better not to make a choice than to take the risk of choosing the wrong product.
Looking for black lace-up shoes: 413 items vs. 33 items. And they all look the same.
While a shop offers a sheer endless assortment of black lace-up shoes, the Shoepassion online shop offers “just once” 33 models. The clou: By filters and well prepared information I have here the feeling to be able to come clearly faster to a result, with which the myth of the pure assortment size would be invalidated.
Mythos3: Shipping costs are a death sentence for every online shop
If the shop has nothing else to offer, this statement may also contain a certain truth. If I ask a user the question whether he would rather pay shipping costs or prefer a free delivery, the answer will probably be rather one-sided.
Beside Breuninger there are enough other small and large suppliers who still work with shipping costs and offer products at similar prices like Amazon, Zalando & Co. Nevertheless they can still exist due to other strengths, which would also invalidate this myth.
If we are honest, we have to admit that every myth contains a spark of truth and thus has a not insignificant influence on the purchase decision of the user. So it usually has a positive effect on the conversion rate if the above mentioned advantages are offered. But what use is this if an increase in the conversion rate based on lower sales, such as a rising returns rate is bought?
The secrets of successful online shops
But what actually makes a good online shop if it is not only about the cheapest price and the largest possible selection?
In addition we should understand that a purchase decision is not only made on the hard factors such as price, delivery time and return guidelines. Much more, a purchase decision is still an emotional – and in very few cases rational – process based on the values, desires and expectations of users.
With the following points you can positively support this process:
Recognize and communicate your EIAs
Where do your strengths lie and what are the reasons why users like to buy from you? It is important to think from the customer’s point of view and, in addition to the obvious points, to pay attention to the things below the surface that make the company and / or the products offered something special from the customer’s point of view. Locality, humanity & service could play a role here, just to name a few topics.
In order to find out these reasons, in addition to self-reflection, an analysis of customer ratings/user feedback on the website, rating portals and / or the respective social media channel is the first step. In addition to criticism, which in turn shows potential for improvement, the customer reviews often contain useful hints and advantages that users associate with the product and/or the provider.
Customer feedback helps to recognize one’s own strengths and weaknesses.
Advantages can be communicated profitably, while weaknesses offer potential for improvement. In addition to the own users, a competitor analysis can also help to uncover strengths and weaknesses. It is important to have a broad view beyond the URL of Amazon.
But what are the good advantages? To find this out, so-called MVP chains are a good tool. With an MVP chain it is a matter of showing a personal benefit for the user from a characteristic and the advantage resulting from it.
If your product does not work, change the packaging.
Depending on their position and company, eCommerce managers are often confronted with the challenge of increasing the conversion rate for a shop without being able to influence the products offered.
It’s the packaging that makes the difference: Nowhere is it as clear as with plain water. The average price here is between a few cents and several euros per litre. Appropriate marketing and packaging make this possible.
But this does not necessarily have to be a problem. Often the actual product is not the cause of a bad conversion rate. It is therefore worth examining the context with regard to the following questions.
Is all information relevant from the user’s point of view on the page?
Whenever a user finds himself in the situation of looking for necessary information from another website, there is a greater chance that he will ultimately buy on another site. Be it because the price is lower or because the site fits better to his expectations.
This point can easily be investigated with an eye tracker. This shows where the user’s focus lies on the page and which content is really perceived.