E-commerce Buzz words

This is a long post about all the E-commerce Buzz words, divided into 1) the hyped buzz words, and 2) the forgotten but efficient buzz words.

Start by seeing this video:

The competitive advantage of e-commerce compared to physical offline shopping, is its simplicity. I basically agree with Anton, who claims that running an e-commerce business is not so hard. Sadly most e-commerce consultancies focus on how hard, how complex and how difficult e-commerce is. That is how they make money, by telling you that e-commerce is very complex, and you therefore need to hire consultants and let them develop e.g. a large and expensive social media strategy. The problem is, these consultants are not better than most e-commerce people, since most of them have no experience doing pure play e-commerce for them self. They prioritize irrelevant E-commerce projects with low ROI over the once that are really important for your business. Here is a list of buzz words that consultants use to try to get money from you by explaining:

A/B testing
I don’t believe in it. I used to. In theory it makes perfect sense. But in the real world, it is more about getting things done, and they testing every little detail. I am sure you have a long important to do list already. Once you are done with your existing to do list and don’t know what to do, you can start testing more. Especially in the Nordics, where our traffic is so limited, it is hard to get enough traffic to complete a test better than guessing. It might make sense for large companies like komplett.dk or amazon.com to do it, but for the rest who have less than 500,000 visitors a month, it makes more sense just to implement best practice. A/B testing is a concept all consultancies love. And yes in theory it works. I am not against testing, I am just stating that most etailers would benefit more from focusing on implementing best practice than on starting to test everything. Why invent the wheel when someone else has done it for you? Remember, in the end, all A/B testing will lead to you selling porn.

Multi-channel & cross-channel
The advantage of e-commerce is its simplicity. Multi channel is everything but simple. Read more here

For the last 15 years, consultancies have been talking about: “how people will start shopping from their mobiles” or “M-commerce being the next big thing”. Most consultancies still say so, and yes m-commerce is growing a lot. So is Afghanistan. It is just from a very low insignificant level. Today more people shop on a tablet than on a phone, so m-commerce has already lost to the tablets, and tablets for me is more like a computer than a mobile.

App shops
Related to m-commerce. It’s good when you are able get customers to download your applications. But really few people do this. If you have a huge company like Asos, then this makes no sense. Just make your website simple and well designed so people can read from their Apple and android devices.

Social media
Ask yourself, is social media more relevant for a midsized online shop, or for e.g. McDonalds? It is of cause more important for huge international companies, than for small once. Social media is not more related to e-commerce than any other business. But the consultancies will tell you otherwise. Social media is as relevant to E-commerce as a TV commercial – No special connect to e-commerce.

QR code
I guess QR codes could work for some multi channel shops, but not really for pure-play e-commerce companies.

Mobile payments
Every now and then mobile payments become a hype. Right now Mobile payments are hot again, but it will be over soon.

It is just dead. People don’t go to facebook to buy stuff.

Facebook friends
Facebook friends are worth money, and check out Asos 1,7 million friends: http://www.facebook.com/ASOS. But as a small local Danish or Swedish shop, you don’t get such many fans, and they don’t buy as much as you want them to. The value of Facebook friends, I believe is lower than the cost of getting them. Some research suggests a fan in general is worth about 10$. Do you think Asos spend more than 17 million $ for their fans? I think so.

Twitter work is English, but for E-commerce it has no effect outside the English speaking countries. Read here how Zappos does it great anyway: http://www.ehandel.se/Hos-Zappos-aer-Twitter-delningar-de-baesta,1364.html

Ouch. This is what I personally consult on, but to be fair, this is also an overrated term. It is so easy to sell the idea to an e-commerce company and they can conquer the whole world if they just let me help them open up the shop in a lot of markets. Sadly, I believe there are way too many shops trying to conquer the whole world before they even can walk, and they fail drastically.

Affiliate marketing
I have tried to make affiliate work so many times. Maybe I am totally incompetent, but none of the affiliate networks that I have been working with have met my expectations.

Conversion rate
“I think if you just could increase your conversion rate by 0.5%” – Have you heard a consultant tell you that? I am sure you have. But conversion rate is a relative thing. A low conversion rate on some traffic you buy at a cheap price, can be good. You want a free advice? – try cutting your prices by 20% and see how that will rock your conversion rate.

Underrated buzzwords in the e-commerce world

On the contrary, the above list of meaningless hyped e-commerce buzzwords are also a list of things and areas very few consultancies focus on. This is the list of underestimated ecommerce focus areas:

I read that sportamore sold 200,000 pairs of shoes. If they can lower purchase price by 5%, reduce in bone delivery time by 12 hours, avoid to buy the wrong models for stock, never run out of the top 20% best selling shoes, well then you have made a huge difference for a company like Sportamore.

I don’t get why this is not an ecommerce buzz word yet. It works so well and kick ass. And best of all, you can do it yourself on Google Adwords, without hiring a consultancy. Alternatively, try to check out: Criteo (both only accept larger customers – 100,000 visits a month)) – Here is how to do it yourself in Adwords: http://static.googleusercontent.com/external_content/untrusted_dlcp/www.google.com/de//help/hc/pdfs/adwords/AdWords_Remarketing_Guide.pdf

This is a buzz word, and a lot of crap companies try to sell you SEO services. Some retailers focus relatively too much on SEO, but for others this is an easy area to improve, if you find the right consultant. As I see it, most small etailers focus too much on SEO relative to other important buzzwords, whereas most large retailers ignore SEO.

I love Adwords. If you do it right this will be your most important marketing source. But don’t outsource this. Most adwords firms are greedy, and make incentive agreements that you will lose on. Complete the adwords training Google provides, or hire a person fulltime to do this. It is very hard to outsource.

Customer service
A lot of companies see customer service as a cost, not as an investment. But many of the companies that see customer service as an investment or after sales, have very high conversion rate on calls, or huge return rates on customers.

Logistic & Packing
I would estimate that Logistic & Packing is about 50% of the total cost in most E-commerce companies beside cost of goods. There are cases where E-commerce companies cut off 2/3 of their packing time per packet. That makes a huge difference in the company’s performance.

like to think that people shop online primarily because of the huge selection and its convenience. But the fact is, prices are the most important factors and without competitive prices, you will have a hard time getting good conversions.

A newsletter is a good and effective tool to reach existing customers. There are standard systems that will be almost for free and meet all your needs. So don’t make it too complicated.

Returning customers
A saying in offline marketing goes like this “Acquiring a new customer can cost 6 to 7 times more than retaining an existing one”. Why should it be different online? The best trick to get returning customers is to meet the expectations of the customer. Returning customers are also affected by your newsletter and remarketing. In e-commerce the number of returning customers can be the most important factor in the long run.

So what buzz words did I miss and what words did I place wrong?


12 thoughts on “E-commerce Buzz words

  1. Detta är något av det bästa och vettigaste jag läst om ehandel i år.

    Jag gillar breddning. Addera nya kategorier som är naturliga för din målgrupp. Det driver trafik, sales och ökar ordervärden om man får bra relevans i prosuktkombinatiner.

  2. Många kloka saker du skrivit.

    Om man är en lite mindre ehandlare, med en omsättning på 2-5MSEK så tror jag att man gärna byter plats på Adwords och Affilliate. Adwords är mycket svårt att få bra resultat ifrån om man är liten, medan många affilliateprogram levererar riktigt bra till de företagen.

    Sedan tycker jag att alla borde jobba med konvertering, för det är verkligen en guds gåva om man ökar konverteringen med några tiondels procent. Men vägen dit är inte gröna eller röda knappar som man mätt med A/B-tester, utan en enkelhet, precis som du skriver.

  3. @Dan – Tak for kommentaren Dan! Bliver jo gald når du skriver sådan noget!

    @Parvelito – Også stor tak til dig Parvelito. Jeg gad godt forstå affiliate markedsføring bedre. HVilket program bruger du og giver det sådan rigtig gode resultater, eller er det bare fordi de køre adwords for dig? Hvis man forstår adwords, så mener jeg det er den bedste kilde til salg. Men igen det er forskelliget fra virksomhed til virksomhed.

  4. Bra post Anders, du har stenkoll igen! Håller med dig till 90%.


    Tror inte företag förstår hur viktigt det är att besökare från Google och Adwords styrs till rätt landningssida där de direkt hittar information om produktkategorin eller själva produkten de söker.

    Detta är något som många stora företag är dåliga på. För mig händer de ofta att man kommer via Google till en “sida saknas” eller till webbutikens startsida. Exempelvis elgiganten körde för någon vecka sedan adwords som gick till “tomma sidor”. Det är väl att slänga pengar i sjön?

    “För mig räcker det att Googla en gång och vill inte Googla pånytt i webbutiken”

    Företag brukar vara duktiga på att visa upp en speciell produkt, men om produkten är i fel färg eller saknar en speciell egenskap, som finns i samma kategori hur skall jag då få veta det?

    Jag har själv mycket att lära om att bygga ordentliga landningssidor som verkligen väcker kundens intresse och tar fram produkten just denna kund söker.

    Kolla er “bounce rate”, stannar era besökare kvar i er webbutik?!

  5. Mycket bra skrivet.
    Det svåraste med en liten ehandelsvarksamhet är att få lönsamhet i den samtidigt som allt annat ska göras.

  6. Bra inlägg!

    Håller med till 95%.

    För mycket fokus på IF istället för DO och ACT i dag.

    Vi glömmer också lätt vanliga saker så som kundtjänst, uppföljning, kundvård, trimma frakt- och inköpspriser.

    Jag ska prova ditt tips om re-targeting via AdWords.

    Tack igen för ett klockrent inlägg (eftersom det indikerar att jag är på rätt väg 🙂 ).


  7. Bra inlägg men imho, e-handel är inte en affärsidé utan ett distributionssätt. Man måste välja aktiviteter utifrån affärsidén, inte distributionssättet.

    Men ett bra inlägg som vanligt.

  8. Bra inlägg! Synd att jag inte tagit mig tid att läsa det tidigare.

    Som vanligt finns det inget “detta passar alla” men listan stämmer in till 90% på oss i alla fall. Sedan finns det några punkter att lägga till eller flytta runt. Affiliate har fungerat ovanligt bra för oss och är snart en av våra viktigaste marknadsföringskanaler. Och som Dan är inne på, det absolut viktigaste för att bibehålla tillväxt och öka omsättningen är breddning av sortimentet. Amazon är ett bra exempel. The more the merrier stämmer in bra där.


  9. Hej Richard og Joel. Lidt samme point i begge har. Det er forkert når jeg ligge op til “right or wrong” i Ehandel, fordi sådan er det naturligvis ikke. Det kommer helt an på den enkle affärside.

    Angående “bredning” så er det lidt interessant. Personligt tror jeg ikke på Amazons model med at sælge alt. (Begik lige E-commerce eksperts selvmord :-)). Jeg tror stadig den lille webshop kan slå den bredde. Jeg tror stadig på at E-handels fordelen er fokus på nicher, men at det er forskel på at have en niche til 5 millioner dansker og en niche til 300 millioner Amerikaner. Så er det klart, mange af de små niche koncepter i norden forsvinder. På den anden side så kan jeg se at mange shops lykkes at vokse rigtig hurtigt ved at øge et RELEVANT udvalg – Relevant bredning. Flere produkter inden for deres business core område.

    Men bredning til helt ny forretningsområder tror jeg ikke på, selv om nogle dygtige E-handlere gøre det. F.eks. var Zalando en sko butik i begyndelsen….

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