Making the move from e-commerce 2.0…

The first real evolution took place when online payments were invented. This allowed a completely automated ordering process which allowed e-commerce to start its conquest of the internet. In the last few years, expansion went uphill and e-commerce has been a booming business since then. However, there haven’t really been any major changes since then.

Surely, you’re now able to store the payment details for later use and every site has some gadgets to ease the choice or checkout process, but no real milestone has been achieved ever since. Even mobile commerce is just a small clone from it’s bigger internet brother, no matter what any hipster or communication bureau might tell.  It seems like the world is being stuck at e-commerce 2.0…

 …to e-commerce 3.0

But if there wasn’t any progress in sight, why would I even matter writing this article? I’ve seen some interesting changes recently, which might just make the change we’ve been waiting for. The key to this big change does not reside in just one element, but Rome wasn’t built in one day as well was it? The whole change is based on a few elements.

Will it blend?

The first one is the platform. Where e-commerce was mainly hosted on one single server, the future lays within several platforms at the same time, but hold on. Just creating a site and then releasing a mobile version of that site or an application is just continuing with e-commerce 2.0. The real change is to blend the different platforms together, create and unforgettable experience, both for the advanced e-commerce junkie or the first-time rookie. Gamification is one of the terms you might consider looking up. Don’t purely think “selling”, but try to switch to indirect selling. Creating a loyal userbase which you attract and reward is the logical evolution on nowadays web, which is dominated by social networking.

Number two is collaboration. You well your stuff, another merchant sells his stuff. What if that stuff is complimentary… still nothing? Imagine that other guy/girl sells the stuff and the customer then goes to one of your competitors to buy stuff B, instead of buying it on your site… that’s a dumb loss. Why not try to team up with the other site in order to get in more leads, on an exchange basis. The other site is not specialized in what you sell, so why not put your knowledge at their disposal? I know, at first you will have less profit, but that’s something you need to get over. Go and team up with the other site and make it happen in the most interactive way possible (hint: look back at element number one). Another advice: don’t start advertising, because that is just advertising…

Technology

Last one for today is technology. Technolgy to secure, technology to improve and technology to make things easier. It’s not fun, but we are sometimes dependent on teh bigger players to wait for a change. I’ve seen some interesting changes in which credit card verification will be integrated… into the credit card itself! Not kidding! So instead of whining about 3D Secure (Mastercard Securecode and Verified by Visa), just wait a little longer. Why undo a change that is actually providing both the cardholder and the merchant with more security, especially nowadays. The only question is not if but how. And that’s up to the bank and the credit card companies to improve. (good thing @mastercardnews is following me on twitter for this one!).

 Technology to improve. Pretty obvious, but did you ever stand still that a computer is just a two sense expercience? It’s just sound and light. However, a new breed of touchscreens is being developed thanks to which you will be able to feel as well. This will be a major update for e-commerce. Also 3D printing technology holds some potential for the future of e-commerce. Isn’t there any university working on smell devices actually?

 And now… to the working table!

As usual , this article is a source for inspiration and is just my way of sharing my field knowledge with the rest of you out there. Have fun with it and check back soon for more thinking material*.

*Hint: @nsonnet will provide you with the latest updates and other news!

2011, like many previous years will be a growth year without many doubt for European e-commerce. This means that a lot of sites are finding their way from their development servers to the world-wide-web, ranging from small shops to huge e-commerce application gateways. For over a year I’ve been keeping an eye open, more specifically on the Belgian market. Most of them are startups, which greatly increases my eagerness to discover how they will unfold into success stories. From all the shops that went live this year, here are, from my point of view, the top 5 you should certainly take a look at!

#1 LFM (Luxury for men) – www.luxuryformen.be

My personal favorite, even though I’d like to specify that this site will kind of make your wallet gasp for air. This site, mainly focused on “all thing men really want” has a quite some exclusive and nice items to buy, ranging from a small replica of Tintin’s rocket to the better Veuve Cliquot bottles (and official fridge) without missing the Mont Blanc pens or kitchen items for the cooks amongst us men. What makes it even more exclusive is the fact that the shop is only open to Belgian buyers. Also, the checkout process is funneled smoothly through Magento’s one page checkout system. Suit up and enjoy your glass of Dom Pérignon 1971!

#2 Razwar – www.razwar.be

Born out of the mind of Pierre De Nayer, this site buckles up for a full frontal blow towards the two major shaving brands (which I will not name any further in order not to get the shaving mafia knocking on my front door in a few minutes). He was inspired to create this site as he felt he was being ripped off every time he went shopping for blades. You basically have the choice between 3 razor types: El Ché (precision, 3 blades), Black Edition (close cut, 4 blades) and El Fidel (fast cut, 5 blades). Additionally, you can even take a subscription to the site so you get your blades even cheaper on a regular basis. Whatever your choice is, you will pay approximately 50% less than the regular brands for the same quality, which means you van spend more on luxuryformen.be. Viva la shave-o-lución!

#3 Pirate Parfum – www.pirate-parfum.com

Wowowow, wait, Belgium is not even on the list of countries?!? That’s correct, I kind of cheated a bit here. The company behind this piece of web is based in Luxembourg, but everyone knows Luxembourg is very closely related to Belgium. If you’re on the field and you’re all suited up, you need to smell good, everyone knows that, but what do you do if you have little or no time to go shopping for fragrances in a shop where you almost suffocate in the smelly damps? You have two solutions: you either start considering using ferns or you order your next smell online. Out of 23 different men fragrances, you will easily pick out the right one by using their intuitive fragrance picker and useful images. Arr!

#4 Decovry – www.decovry.com

A true men’s nest is not a true men’s nest without a bunch of design furniture. The only problem resides in teh fact that those design people ask a lot of money for messing around with shapes. The worst thing actually is that everybody will have the same furniture as you and well, that’s not how things work. Decovry basically found a way out of this by launching a site on which you will get a new exclusive deal every week or so. I hear you saying that this might be the 1542nd group selling site and that might be true, but in my eyes, it’s the only one where you might finally find a piece of furniture for your home. Your place or her place?

#5 Econef – www.econef.be

Another one for your place to end this list, Econef will make sure everything stands in the spotlights. You will also be able to impress everyone by telling how green-minded you are. Still not convinced about buying your light on this site? No? Well they have LED and LED is the awesome way of making light, but it’s still quite uncommon to find a decent selection in most of the hardware stores around. The right lamp is easy to find thanks to the detailed overview and the quick selection tool on the left. Last but not least, LED is so energy-efficient that you will save some more money you can spend on more important things, like razor blades or rewarding yourself with a nice bottle of Veuve Cliquot Ponsardin!

Even though a webshop has many similarities to a physical store where customers just walk in, you need to keep in mind that these remain two totally separate sales channels. I could even say with confidence that these are actually two totally different sales approaches. Whereas a standard shop, based in the streets will have a natural visibility by default, your webshop will simply not. People don’t just walk on the internet, passing by your shop and saying “Hey let’s visit this one for a while”. A new site has exactly 0,00 visibility by default, so it’s up to you to increase this visibility.

Increasing teh visibility of the site takes some very basic actions and can already be achieved with relatively small budgets, but it isn’t that straightforward. If for instance, you will start sellingclothes online, you need to keep in mind that by just linking to your site, you will be “Textile selling store #1.203.504 in row and counting. On the internet, you need to stand out, make sure people look at your ads and do what it takes to get on your shop in as few steps as possible. This is where marketing kicks in. I’m not a marketing expert, but I can tell you this: make sure you get the right keywords on your site, be original and creative and most importantly, manage your marketing budget efficiently. What I mean is that you don’t need to spend thousands of euros/dollars on advertising in order to reach millions of people that are situated far outside your audience. Make sure you target the appropriate public, using their channels and adapt your ads so that their needs are reflected in it.  Social networks have been proven to be a great marketing resource as well, use them wisely and creatively. When visiting the DMF 2011 fair a few weeks ago, I also saw an interesting lecture of Adobe on efficient conversion management, by creating several marketing campaigns at once in order to link people through to the exact product range they’re looking for, which considerably cuts down the required amount of effort that the end-user needs to do in order to obtain what he/she needs. Which brings us to customer care.

Customer care is often misunderstood. Customer care is not only taking care of customer complaints or issues after you sold the product, that’s simply taking care of customer complaints or issues after you sold the product. Customer care, as the name states, is taking care of your customers or making sure they feel like they’re getting the service they’re paying for, before during and after the purchase. Make sure they do as little effort as possible, make sure that the whole sales process goes as smooth as possible and make sure the customer (or end-user) feels great about buying the goods. Also make sure that the customer doesn’t feel like he or she is being scammed or lured into more costs. Many sites I know still ask an extra fee for domestic shipments… bogus! Domestic shipments are cheap nowadays if you organize them efficiently, so why should you charge the customer for something that you could offer for free without taking risks? The same counts for gift wrapping. I don’t know how some merchants don’t feel ashamed of charging for this, wrapping material comes at almost no cost.

Cutting down on shipment costs brings us to logistics. It’s mainly thanks to logistics that you will be able to manage the goods flow without going crazy and it also has a massive impact on the customer satisfaction. Good logistics make happy customers. Make sure you get the goods as quickly as possible (face your fear of getting a small stock and just do it) so that you can send them as quickly as possible. Do some research and find the best quotes and the best service for your deliveries. Try working via indirect channels and if possible try to automate as much as possible. It’s amazing how many you can accomplish by just thinking through a few good and easy to implement processes and automate them. It all sounds straightforward, but strangely enough, it’s being forgotten over and over again.

As you will notice, this last part was brief and didn’t go that much into detail as the previous ones. A part from the fact that I must admit my expertise is a little more shallow in these domains, there’s also the fact that all three of these pillars are to be used in extremely specific ways depending on your business. That’s also why you should always do some research on these subjects, keeping these guidelines printed in your brain. Try Google, browse Amazon for some great books and attend several conferences and/or fairs on the subject. Expecially the latter will give you a more hands-on insight in these subjects than a book or a text like this will do, so you should definitely give them a try. And just as I said in the beginning of the first part, this text is far from being meant as a schoolbook, you should actually more or less consider it like those Ikea manuals. I provide you with the information on how to mount everything, but it’s up to you to build it and make sure it looks great, it’s located in a good way and it works great.

This is it. I hope you enjoyed this and will use it as your blueprint for the big adventure that lays ahead. i’m sure you won’t regret it! Good luck!

So, let’s move on where we last started. By now, you should more or less have an idea on how your store will look, what exactly you will sell, how you will be selling it and who will help you with the whole process. If not, I suggest you read the first part one more time to make sure everything goes well.

Now that you have the store and the goods, you might think it’s showtime and time to cash in, but that’s not true… at all. The story only begins and there’s still quite a path in front of you. Before you will actually be able to cash in anything, you need to make sure customers can pay on your site. Easy? Maybe, but you need to make sure the payment process  is secure, smooth and customer-friendly.  Think C.A.S.H.: Customer, Acquisition, Security, Handiness:

Customer (or convenience). The customer is the person that comes on your site with a certain need in order to satisfy this need. In order to be able to satisfy this need, the customer needs to offer a certain something in return (since you will not be running a charity). This certain something is money, which in this scenario needs to be transferred electronically. This also means that you will need to make sure that the customer gains trust in you store in the first place and that the way to pay (W2P) is as convenient as possible.

Acquisition.  How will you acquire the money? In other words: how will you make sure that the money transits from its original location to your bank account? How fast do you need this transfer to be? (ex: bank transfers are cheap but they’re damn slow and will make sure your customer gets his/her goods at least 2-3 days later)

Security. Without any doubt one of the most important parts in the payment process and sadly enough the most forgotten one. Without security, you will be exposed to two dangers: the customer not having any trust in your store and you losing money.

Handiness. Even though you need to think about the customer, think about your own convenience as well. You will have better things to do than following up bank transfers or handling fraud yourself. Always leave this to someone else. Always.

To make a long story short, you will need to think your payments through and leave nothing to chance, since you will get in trouble (or will get customers in trouble… and what goes around comes around) if you simply go for the cheapest or easiest solution. Furthermore, many payment methods are less secure than you might think and no matter what, you should always watch out for non-guaranteed methods or providers.

If for instance, you take a look at my current employer, which is Ogone, one of Europe’s major payment service providers, you will notice that the solution isn’t the cheapest (at all), especially for starting entrepreneurs, but on the other hand, it offers a great balance within the C.A.S.H. model mentioned above. You get tons of security, a smooth user experience (thanks to a vast majority of payment methods) and once it’s installed, there’s pretty nothing you need to do. Feel free to contact me should you want to use it.

So now it’s up to you again, make sure you find a good payment service provider that knows the (different) markets you will be selling on and has a decent fraud protection tool. For the European entrepreneurs amongst you, feel free to contact me in order to get started.

Oh, by the way, this guide might also be of use if you’re planning to improve an existing shop.

Now it’s your turn to embark in the ecommerce adventure. Before we get started, you need to ask yourself three basic questions. these questions will be developed further below and will basically mark the difference between you and the millions of other online stores on the web.  Don’t use these questions and you might as well abandon your project right away…

• What am I going to sell?
• Who am I selling this to?
• How will I sell it?

These are the only three questions you need to think of at first. We’ll treat the other questions later on. Now let’s focus on the first approach. Each question you just answered automatically generates more questions. For instance, if you replied “clothes” on the first question, you’ll automatically get “What clothes will I sell in order to match the public in question 2?”, “In case the clothes don’t fit, how will people send them back?” (that’s right, when selling in the EU, you’re legally forced to enable this as a merchant), and so on . The second question will automatically generate the questions, “what are these people’s interests?” , “how do they think?”, “how do they pay?”, … . The last question will do just the same. Once you figured out a complete set of questions, you’ve basically got the building material to build the framework that will support your very own success story.

It’s finally time to get started. After all this thinking, you will need to do some research. Try to find the best rates for buying your stock (and don’t be afraid to be a real douche when doing so!), find yourself a decent logistics partner, hook up with a payment gateway, start thinking how you’ll build your site or who will build it, where to find your customers, how to increase your visibility, how to retain your customers, … STOP! This list is getting too crowded, maybe it’s a better idea to make a step by step outline of your project

Allright, first things first. Depending on what you’re going to sell, you might have to gain some stock (even if it’s just a tiny bit) or you might have to develop a service. When planning to sell goods, you might have two approaches: a big product range and low prices or a limited product range and somewhat higher prices. A blend of the two approaches is possible, but it’ll cost you way more time and money, so you better start off with one of the two and play it black and white to begin with. Find yourself a decent supplier (or suppliers) and negotiate. Negotiating isn’t so hard and believe me, it’s fun!  For services, try to limit your costs when it comes down to development, but don’t overdo it. A little outsourcing will not only improve the quality of the programming side, but it’ll let you focus on more important things.

Next up comes your site. Now this is the point where many people think they’re doing it right but are doing it wrong anyhow. I’ve seen lots and lots of websites with a nice lay-out but lacked customer friendliness or offered great products but were not nice and therefore scared potential customers off. A good website looks nice, is easy to use and is not just “generic website number 7.125.032″. Before even thinking about making a site, do the little test below:

• Do I shop online every once in a while (yes/no)
• Do I understand CSS (yes/no/what’s CSS?)
• Am I a creative person? (yes/no)
• Is it a bad thing to use Comic Sans? (yes/no)
• Do I know about SEO (yes/no)

If you answered all the above questions with yes, things are looking good and you might basically consider making that site yourself, starting from scratch or by using shopping cart software. If you answered 2 or 3 questions by no, you might just consider making it yourself but be sure to ask for advice and do a little research first on those subjects. If you answered more than 3 questions by no I suggest you just outsource the project to a web designer.  Be sure to pick a good one and always ask for examples of previous creations. If you outsource the site, this first part of my tutorial ends here for you. See you in the next part!

For those who take on the challenge of creating their own site, these are a few tips I give away for free:

• Keep the site plain simple (did you know that in many countries in Europe 50-70% of the population never shopped online?)
• Provide the user with the best user experience they ever had. A nice example is www.coolblue.be . Every single of their sites has a nice wizard to guide you towards the item that suits you the most.
• Try to think of unique tools or functions to impress your (future) customers
• Ask people around you to have a look at the site while it’s being developed and ask for their input
• Make sure the user can always go back ons step without having to start over the whole process of ordering something on the site
• Finding a good lay-out is not easy, try over and over and over till you find a good design which is appealing to the eye and easy to navigate through
• Once again: keep it simple!

That’s it for the first part. Next time we’ll have a look at the payments and the customer service, but also at how to make sure people find your site.

Questions? Place your comments below or send an e-mail to info ["at"] evowars.net. Alternatively, you may also ask away via Twitter @nsonnet

Recommended reading:

The 80/20 Princple by Richard Koch – Buy it

Smashing CSS by Eric Meyer – Buy it

What would Google do? by Jeff Jarvis – Buy it

Getting to Yes by Roger Fisher and William Ury – Buy it