A 2020 study from 99firms found that there are more than 2 billion digital buyers in the world today, with projected sales at over $4 trillion. The trend shows no signs of slowing: The same report projects that 95 percent of all purchases will be transacted through e-commerce distribution channels by 2040.
Third-party logistics (3PL) lets businesses expand their current eCommerce distribution operations through warehouse, fulfillment, and shipping efficiencies. Organizations that do not leverage these opportunities will be left behind. Here’s how your organization can develop sales diversification through a solid eCommerce strategy.
Today’s proverb is Omni commerce — a multichannel approach to sales, creating a seamless customer experience whether your client is shopping online or in a brick-and-mortar store.
Know Your Customer
Particularly in omnichannel commerce, you must know your customer. What do they like? What do they not like? Sales diversification is not a matter of throwing enough spaghetti at a wall and seeing how many sticks. Before you diversify, you have to understand what your customers want. Anything else is just throwing spaghetti at the wall.
Marketplace Strategies
To Amazon or not to Amazon. Is this even a question? While Amazon might simply be a fact of life for eCommerce distribution, that doesn’t mean you should put all your eggs in this basket and only use Fulfillment By Amazon (FBA). Relying too heavily on Amazon — or any other single marketplace — can leave you high and dry when something goes wrong there. Diversifying your marketplace strategy prepares you.
It might sound far-fetched, but you don’t need Amazon as much as you think you do. An article on Taxjar’s blog suggests that the correct balance is 80 percent website and 20 percent marketplace sales — all marketplaces combined. How do you make that happen?
The short answer is through non-FBA. The longer answer is that it takes time and the right strategy.
Data Analytics
Nothing will identify your opportunities in eCommerce distribution, quite like data analytics. Your omnichannel eCommerce isn’t just providing you with revenue. It’s also furnishing you with a treasure trove of information that you can use to help determine the next steps in sales diversification. Good data analytics should be the cornerstone of your strategy. Track your buyer journey and drill down on intent. Anything else is just guesswork.
Data analytics will help you make your customer experience more personalized. In the age of social media, customization and personalization are the names of the game.
Diversify Your Marketing
Much like relying upon one marketplace exposes you to risk and limits your audience, limiting your marketing does the same. Just as using more marketplaces expands your potential customer base, so does diversifying your marketing. Informing people that you exist, why, and what your “wow” factor is will help you distinguish yourself in an increasingly competitive marketplace with tight margins.
This is particularly challenging in an increasingly globalized market. You must communicate not only to a diverse domestic population but a diverse international population as well.
The question isn’t whether to expand your eCommerce strategy to diversify; it’s when you’re going to do it. To do anything else is to leave yourself wide open to your competitors who have.
James Pell is a freelance writer specializing in e-commerce, cybersecurity, and logistics.