Data Driven Business
  • Dec 11, 2013
  • Comments Off on We still suck at eCommerce in the second decade of the 21st century
  • Original Content

11 years ago
We still suck at eCommerce in the second decade of the 21st century

According to TNS Gallup over €1bn in sales from Finns went abroad in 2012, somewhere around 15% of the entire 9.65bn euros Finnish people spent online. I don’t think this is a Finnish problem I think the same is happening globally. The question is why?

Are Finnish sites so bad? I think so yes. But in a twisted way this is great news because it means your numbers can be drastically improved.

There are no longer any barriers

Basically unless you live in the far east the common language of the web is English. And everyone in Finland is good at English. Language is no longer a barrier. Shipping and delivery is no longer a barrier.
It means everyone has far more choice and this is where the 15% is going.

If a Finn buys from abroad it’s because either the deal is better from abroad, the service is better or it’s been sold better.

The deal is better

Do your homework.

If you sell a product that costs €35 and we can get the same product for €20 plus free shipping from the US or UK then it stands to reason you’re going to have problems. The amount of retailers I meet that complain about low conversion rates from their website but haven’t done the basics doesn’t surprise me any more.

It isn’t that hard. Search for your product on Google (in English and your target market languages), see who else sells it and make a note of what they price it at. If you sell it too expensively then you either need to sell it better than your competitors (I’m coming to that later) or you need to reduce your price to something that won’t make the local think about looking around.

So, I’m a Sons Of Anarchy fan. I go Googling “Sons of Anarchy Season 5” and find a Finnish site with the price listed at €39.95 and actually it’s quite cool because there’s 13% off if I have a their loyalty card. So it’s only €34.95. Before I am logged in on the website however the full price with 3 euro shipping registers. So I have €42 in my head when I go back to Google and see I can get the same thing from Amazon for €23 plus €4 shipping.

I will get it from Amazon in about 12-14 days and 1-4 days from the Finnish site.
So my choice is can I wait an extra few days to get the exact same product about 30% cheaper?

By the way I am not just picking on one site (in this case netanttilla). When writing this article I didn’t pick the brands on purpose, I picked the ones that showed up in Google. The Netanttila result was not pure luck, & both sell the DVD for €32.95 plus shipping of €2.95 so they’re also 25% more expensive than Amazon as well.

Should the finnish brands try and compete with Amazon on price?

Definitely not, but they should be giving me far more reasons to pay 25-30% more than they currently do otherwise Amazon gets the sale. And another thing, don’t do any marketing till you’ve done this to work out if spending the money to get your traffic is likely to be worth it. This sounds like common sense I know but you’d be surprised what some sales people will tell you.

Secondly the service is better

So a local service should be better than something from abroad.

It should give me more confidence buying from a retailer whose brand is plastered all over the local buses.
But the rules have changed.

I can be sitting inside that bus reading about a great deal from a competitor on my mobile phone completely oblivious to any other branding going on around me and much more engaged.

You need outstanding customer service to compete with that. Something that is fast, efficient and above all very friendly. Email, Social, Chat, Call centres that aren’t outsourced to an Indian IT company and understand how to solve problems around whatever it is you sell.

Most people will pay more for better service. Many in Finland are loyal to Finnish brands, so you’re already half way there if you give a Finn a good service.

Lets say for instance that when I added Sons of Anarchy to the Finnish shopping cart I actually had the opportunity via a chat mechanism in realtime to ask what the price would be with shipping after I’d logged in with my discount card?

I don’t want to call because that might cost money, it might take ages, I might have to go through an automated set of responses that irritate me.

I don’t want to email and wait for a response, I’m impatient, I am ready to buy now.
I want instant help.

So imagine if I was told over chat; “I am so sorry that wasn’t clear, it’s €37.44 but since you’re a loyal customer I can offer free shipping if you’ll let me process your order now. That would be €34.95?”

Now the scenario is different. Firstly someone has just been nice to me. It makes me feel good. Secondly while the price is still cheaper from the US the difference is much less, the service is instant and I’m buying from a helpful person in Finnish rather than a foreign corporation.

I am purchasing from a Finnish brand I know and trust. It’s great service. I’m sold.

Which leads nicely to the 3rd reason… they may sell it better

When I looked at both product pages for Sons of Anarchy season 5 (both Amazon and Netanttila) I wasn’t impressed. Amazon do a better job because they have a number of comments from fans that give a glimpse of what’s going on in the episodes though I nearly missed them because they were too far down the page. But that aside both sites are relying on you knowing you want the product and that you’ll know what it’s about.

But why not use the trailers the producers actually produce to promote the series?

Watching that trailer puts a lot of questions in my head.
Wow, Jax fell off a bridge?
Is he dead, surely he can’t be dead he’s the main character?
Was his bike tampered with?
What was his mother and wife doing in the middle of the bridge?
Why were they trying to stop him?
I need to find out now!

If local sites had that trailer (a 30 second clip) in their sales pitch on their product page their chances of closing the deal just went up despite a higher price because of the sense of urgency instilled by the trailer.

Finnish sites could also do a professional Finnish review of the series, something Amazon will never do because they can’t scale it.

Of course all of this is extra work for the retailer and for a low margin product like a DVD it might not be worth the effort, something else you need to do a business simulation around. Prioritising the products sold via eCommerce can save a lot of pointless work. By sold I mean where real sales techniques are used rather than just displaying pricing and an add to cart button.

eCommerce can’t be run like a supermarket

The problem with most e-commerce websites is they’re all set-up like supermarkets. They have thousands of products we can search for much like a supermarket, but they expect us to be sold on the product before we look at them. The brands do the selling for a supermarket and we go to a fixed location knowing what we want.

This isn’t the same online (I can shop from the US as easily as Finland) and this is why the conversion rates are so low on retail websites. We’re not always pre-sold, sometimes we don’t know what we want and if we do know, we also know someone else probably does it cheaper.

For Amazon being an online supermarket that can do it cheaper works. They have the scale to do it cheaply (unlike the rest of the world) and they have every product you can think of, from vacuum packed bullfrogs, to electronics, to books and DVDs. They also have direct marketing automation testing and analytics at unprecedented levels of sophistication, I know I’ve studied them for over a decade and seen it in action.

In no way am I trying to suggest anyone can copy Amazon because it would be stupid. However I am saying you have to compete with them – not on price but on the rest.

The marketing automation they do can be copied. The testing and business development they do can be copied and it can be copied relatively cheaply per year. A pittance compared to what a retailer would spend on a physical store.

To compete you have to be different just like you are offline, you have to sell better and offer better service than Amazon. The rest of the world can’t be the online supermarket because Amazon already is.

You need to have completely different strategy for product pages with a considerable effort on answering every question the buyer might have.

You need to get into the buyers head.
What motivates them?
What makes them tick?

Your website needs to be the salesperson you have in your retail stores. My advice would be to get an experienced sales guy to help you, someone who works in a department selling the products in a retail environment to help start selling your stuff online. Ask him or her what your customers ask for before they buy a product and put it online.

You need to be the online sales retailer, not the online supermarket. If everyone does that then the 15% might start coming back to Finland.

By: Steve Jackson, CEO, Quru

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