Ecommerce Strategies Assignment Of Rents

Without a detailed and well-planned online marketing strategy, too much is left to chance.

When you rely on “hope based marketing” you’re at very high risk of losing money, time, and traction because nothing is strategic and everything is reactive.

As the old adage states, “A failure to plan is a plan to fail.”

Keep reading to unearth all 14 ecommerce marketing strategies

But, if you’d like to go behind the scenes and find out how the right strategies contribute to the average Shopify Plus merchant growing between 126% and 274% YoY …

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Now, onto the strategy …

1. Compose an Executive Summary

Writing an executive summary is both the first and last step in creating a marketing plan. Like the name suggests, it will summarize — i.e., catalog, align, and bring together — all the other sections in the document as well as provide you, your employees, your advisors, and your (potential) investors an easy-to-understand and implement overview.

2. Identify Your Goals and Objectives

This is where you set the stage and paint a broad picture of what your marketing activities will be focused on for the upcoming year.

Goals might include (but are not limited to):

  • Penetrating or creating a market
  • Stealing customers from an established competitor
  • Expanding product distribution (on or offline)
  • Launching a new product or product line

Karen Albritton of marketing firm Capstrat says, “If your business goal is to grow revenue, what marketing objective will accomplish this? Adding more customers? More repeat customers? Higher expenditures?"

As you define your objectives, use real numbers to add gravity to how you plan to achieve the goal.

If the goal is “Grow revenue by 25% each quarter” your objectives might be:

  • Add 50-60 new customers/month
  • Increase repeat purchases by 10%
  • Increase AOV by 15%

Don’t worry about getting into the “how” just yet, but rather let this Goals & Objectives summary set the stage for the rest of your ecommerce marketing strategy. As you flesh out the next few sections, you’ll build the case for why the market will be receptive, and how to achieve these objectives tactically.

3. Craft a Mission Statement and Value Proposition

This is typically a finely-honed paragraph that considers the following:

Company Vision

  • Why are we in business?
  • What markets do we serve and why?
  • What are the main benefits we offer our customers?
  • What does the company want to be known for?
  • What does the company want to prove to the industry, customers, partners, etc?
  • What’s the general philosophy for doing business?
  • What products/services does the company offer?

Company History

  • When and where was the company founded?
  • Why was it started?
  • How has our product evolved?

Resources & Competencies

  • What are we good at?
  • What’s special about us compared to current and future competitors? (no need to name names)
  • What gives us a competitive advantage?
  • What are our advantages in terms of people, products, finances, technical, supply chain, etc.?

Not all of these things need to make it into the mission statement of course, but having an awareness of each of these elements can help you to choose what is most important to the organization. 

For example, there’s an old, high-end men’s shoe store in my town. If they were to launch an online store, I would write their mission statement to say:

“Since 1915, Lexington Shoes has outfitted gentlemen with luxury, hand-crafted footwear. Our founder Charles Lexington believed the only way to deliver a premium experience was to make eye contact, listen deeply and make recommendations based on the person, not the products on the shelf. 

“100 years and 3 generations later, we stand by this value and feel its increasing importance in our ever connected, too busy to slow down and see each other world.”

The mission statement differs from the value proposition, in that the value proposition is a concise promise of value. Peep Laja of CXL says:

“A value proposition is a promise of value to be delivered. It’s the primary reason a prospect should buy from you.

“In a nutshell, value proposition is a clear statement that explains how your product solves customers’ problems or improves their situation (relevancy), delivers specific benefits (quantified value), tells the ideal customer why they should buy from you and not from the competition (unique differentiation).

“You have to present your value proposition as the first thing the visitors see on your home page, but should be visible in all major entry points of the site.”

4. Target the Right Customers and Market(s)

In this section of the marketing strategy, detail everything you can about your target customer or customer groups.

This includes any relevant customer demographics:

  • Age
  • Gender
  • Geographic location
  • Income
  • Purchasing Power
  • Family Status
  • Or any other quantifiable data

“How To Build Buyer Personas For Better Marketing” offers a phenomenal summary the subject. If your customers are U.S based, it recommends using the Census Bureau and Bureau of Labor’s website to gather the information. I’ve also found City-Data.com to be an excellent source of quantifiable demographic information.

The target customers section should also include relevant psychographic profile information:

  • Hobbies
  • Books
  • Movies
  • Websites
  • Lifestyle
  • Television shows
  • Magazines

All of this will influence a wide range of areas in your business, including brand positioning, advertising creative, ad placement, local markets you want to penetrate and more.

Being able to more clearly identify your target market will help you to “speak the language” of your prospective customers, and get a higher return on your investment for your creative assets.

Using this, describe your target market approach. Are you using a mass-market strategy or speaking to a niche?

When evaluating your target market try to answer the following questions:

  • What are the needs/benefits sought by the market overall?
  • Who uses the product?
  • Why do they use the product?
  • When do they use the product?
  • How is the product used?

You should also use this section to discuss how customers perceive your product in relation to competitor’s products or the other solutions they use to solve the same problem. What are their attitudes toward your company, and to the general product category you serve?

Describe their purchasing process as well:

  • What does the decision-making process involve?
  • What sources of information do they seek?
  • What’s the timeline for their purchase?
  • Who actually makes the purchase?
  • Who or what influences the purchase?

“How to Map a Customer Journey in Ecommerce: The Data Behind Consumer Psychology and Experience” not only includes a wealth of direct wisdom from some of ecommerce’s leading voices, it also provides a number of customer journey overview as well as a downloadable template:

And finally, provide market size estimates for those included in your target market.

  • What is the largest possible market if everyone bought?
  • What percentage actually bought from you in the past?
  • Given the current timeframe, how much growth do you think is possible in the next year and longer?

If estimating the market size seems daunting, Rastislav Turek — CEO of Pexe.so — gives an excellent response on Quora that breaks it down in very simple to understand terms.

5. Conduct a Situational Analysis

This section of your marketing strategy is to provide a snapshot of where everything stands at the time the plan is presented.

This section, in particular, can take a significant amount of time as it scrutinizes multiple levels of your business, your market, where you stand, and how your competitors are doing.

If you’re running an established business, this is where you take inventory of what’s currently working and what isn’t. For new businesses,this is the research you that’ll help you understand the market you’re getting into.

(See Also: Preparing A Market Study)

This includes an analysis of the following areas:

Current Products

Product Attributes

What are the main features of the products, and major benefits received by those using the product, current branding strategies, etc - If you’re selling the same product other retailers, the “product” would be in how you’re positioning the product category and the benefits of buying from you instead of everyone else.

Pricing

Describe pricing used at all distribution levels, including the pricing to final users, wholesale buyers, the incentives offered, discounts, etc

Distribution

Talk about the various ways the product is made accessible to final users, including the channels used, major benefits received by distributors, how the products are shipped, process for handling orders.

Promotion

Describe the promotional strategies and tactics in terms of advertising, sales promotions, personal selling, public relations and how the product is currently positioned in the market.

Take inventory of which promotions exceeded expectations in the previous year, and which did not perform to expectations. Include hard numbers when possible.

Services Offered

Discuss the various services offered to final users and distributors before, during and after the sale.

Include performance and/or usage metrics of each service, and impact it’s had on the bottom line. Customers who use our personal styling service tend to spend 4x more than customers who do not. Wholesalers who use the quick order function in the ordering portal process 2x more orders than wholesalers that do not.

Distributor Networks

Evaluate how your company’s product is currently (or will be) distributed.

This includes your own website, any third-party marketplaces you might sell on, physical retailers, pop-up shops, affiliates, referrals from existing customers etc.

For your own website, it’s also worth breaking down which traffic sources brought the most sales in the past (i.e., Adwords, Facebook Ads, Organic Search, etc.).

List out each of the channels in the supply chain and provide an overview of their performance.

Be sure to include the needs/benefits sought by distributors. This might include referral fees on marketplace sites like Amazon or Etsy, or the need for localized co-promotion with a physical retailer.

Also, include your product’s role in the distributor’s business.

  • How important is it to their strategy?
  • How do they position it in relation to the competition?
  • How do they make their purchases & who influences their purchase decision?

When evaluating distributors, be sure to list the type of distributor, their size, geographic region, and the markets they serve.

Competition Analysis

This is where you’ll examine your primary competitors serving the same target market.

You’ll want to analyze direct competitors:

  • Target markets served
  • Product attributes
  • Pricing
  • Promotion
  • Distribution & Distribution Network
  • Services Offered

You’ll also want to discuss their strengths and weaknesses including

  • Financial standing
  • Target market perception
  • R & D capabilities

Finding this will take some digging. Audienti has a great article that can help.

It may also be a good idea to provide a S.W.O.T analysis on your competitors to provide an overview of their Strengths, Weaknesses, Opportunities, and Threats.

Current Financial Condition

Using charts, tables, and graphs along with a brief paragraph explaining what you’re looking at will prove invaluable for making the information easy to digest.

Current Sales Analysis

Overall industry sales and market share:

  • Total market sales
  • Total for your company’s products
  • Total for competition

By segments/ product categories:

  • Total for segments/product categories
  • Total for company’s products
  • Total for competition

By distribution channel:

  • Total for each channel
  • Total for company’s product by channel
  • Total for competition by channel

By geographic region:

  • Total for each region
  • Total for company’s product(s) by region
  • Total for competition by region

Profitability Analysis

In addition to the sales analysis, you’ll want to look at how your expenses impacted those sales, and identify the areas where you should scale back or double down.

Marketing Expenses

  • Direct: those that can be tied back to the product. (i.e., ad spend, spend on creative assets, etc)
  • Indirect: expenses that are tied to talent and technology fees

The point of this is for you to evaluate if certain channels, markets, geographic regions, etc are worth it moving forward.

For highly detailed plans, this may need to be broken down into individual products or product categories.

External Forces

These are the areas you have no control over that have a (positive or negative). This could include product trends, natural disasters, seasonality, etc.

Other areas to consider are:

  • Social & cultural
  • Demographic shifts
  • Economic considerations (i.e., housing market crash, rise in oil prices)
  • Technological
  • Political
  • Climate
  • Legal, regulatory, ethical 

If you’re an established business, consider these from the previous year and discuss if/how this impacted certain rises or drops within specific markets/channels.

If however, you do not have your own historical data to consider, measure the known impact these external forces have had on established competitors and those in your market.

Being prepared for external factors could lead to major opportunities. Think - having enough snow shovels on the shelves during a blizzard, or having enough medical supplies during a natural disaster, or having a protocol in place for upcoming regulatory changes within an industry.

Being prepared for external forces is where a company can catch its competitors sleeping.

Summary of the Situational Analysis

Because there is so much to take in with the situational analysis, it’s good to provide a summary of everything you’ve just talked about.

Discuss the opportunities that may arise as a result of any of these factors, what you’d like to spend more on, and where you should spend less.

6. Develop a Pricing and Positioning Strategy

In this section of your marketing strategy, detail the positioning you desire within your industry and how your pricing will support it.

Using the information you’ve collected in your situational analysis, pricing will likely need to be adjusted by distribution channel, competitor positioning, geographic region, and so on.

Pricing on channels you own should not also be overly competitive with distribution partners who sell the same product. If you’re selling for 20% less than a highly visible partner, for example, you could risk upsetting the partner and losing their distribution.

When discussing positioning, you may also want to briefly discuss how you’ll want to position your product with your existing distribution partners.

Do you develop exclusive product lines with specific distributors? Will you include special bonuses for customers who buy through that partner? Are certain items only available when a customer orders direct?  

Tie all of these adjustments and changes into real numbers and how it impacts the bottom line.

Do this showing the impact of:

Customer sales

  • By volume and growth percentage
  • By customer segments

Channel sales

  • By volume and growth percentage
  • By channel

Also, show the margins associated with working with each channel and how profitable potential price/positioning changes will be.

Because this relates specifically to your existing channels the goal is to show how these changes will attribute to the objectives outlined above.

7. Optimize Your Distribution and Fulfillment Plan

This is where you detail how and where customers will be buying from you.

Are the buying directly through you? Are they buying from other retailers and distributors? Are you doing pop-up shops or selling in person?

If you’re working on a large scale, it’s worth organizing your distribution touch-points into various regions.

Given how sensitive logistical issues can be, we’ve spent considerable time at Shopify Plus outlining not just the general pros and cons of third-party logistics (3PLs) — namely, international warehouses and fulfillment — but advice from industry leaders along with a series of questionnaires to guide you.

You can access those in-depth articles here:

8. Create a Cross-Channel Promotion Strategy

This section is where you’ll give an overview of your overall promotion plan, providing a summary of existing and new channels you’d like to add to the mix and how it could impact your growth.

It is important to calculate the both the monetary and time costs that will be associated with each channel and how it will impact growth.

For instance:

You currently work with a smaller marketplace site, and for $1,000/day, you’re able to receive front page & sitewide promotion to the products you sell with them. Estimated traffic during the time frame is X. If existing conversion rates are Y and there is a Z% increase in traffic, it could result in ___ new revenue.

Make sure you include all possible channels you want to explore including but not limited to:

  • Partnerships
  • SEO
  • Facebook
  • Referral
  • Affiliate
  • PPC
  • Street
  • Magazine and print
  • Radio
  • Television
  • Direct mail
  • Physical retail
  • Blogs
  • Other social media

Please Note: At scale, each of these channels has a real cost to be done properly. For as much as you can build backlinks and perform keyword research on your own and maybe get early traction, at some point, you will need to hire somebody who knows what it takes to break into more competitive SERPs.

I highly recommend reading Nick Eubank’s article on Realistic SEO as it will show you just how difficult SEO can be to break into competitive verticals.

I bring this up, especially for early-stage entrepreneurs, depending on your budget, skillset & time, the channels that seem “free & easy” are typically even more challenging to break through the noise.

For each area that falls under “Online Marketing,” you may want to create separate documents for each, as these plans can be quite detailed on their own.

9. Inventory Existing Marketing Assets

This is the creative used to promote your content to current and existing customers. This may include:

  • Your website
  • Ad creative
  • Design talent
  • HD photography
  • Business cards
  • Catalogs

Identify what you already have, and what’s needed to successfully execute the promotion strategies discussed in the previous section.

10. Construct a Conversion Strategy

Once you get people to yours or one of your distributor’s sites, how do you plan on converting them to paying customers?

On sites you don’t control, this could include, but is certainly not limited to:

  • Improving sales copy
  • High-quality photography
  • Testimonials

On sites you do own, you’re free to experiment with iterative testing, such as making the search function easier to use, improving the value proposition, and increasing the visibility of features that prospective customers need to feel comfortable buying.

Using what you know about the different customer segments you’ve identified (i.e., high-ticket spenders, frequent buyers, etc.) propose a handful of ways you might be able to get them spending more & more frequently in this section

Conversion optimization is an ongoing process that is too encompassing to boil down to a handful of tactics. However, if you’re providing an overview here, it’s a good starting point for a separate fully fleshed out document for later.

11. Explore Joint Ventures and Partnerships

This is where you identify the agreements you’ve made with other organizations to help reach new customers or better monetize your existing customers.

When you see McDonald’s co-promote Coca-Cola, or when you buy a remote and it includes Energizer batteries, this is JV and Partnerships at work.

Think about what other purchases your customers are making before, during, or after they buy from you. Make a list of the companies that provide those solutions and reach out to secure them.

12. Detail a Strategy for Increasing Orders

Detail how you’ll make more revenue per customer. This could include using:

In this section, be sure to reiterate any relevant qualitative research or data you’ve found that would support a need for the program. Also, provide estimates of how much each program might cost to implement and projected impact it may have on growth.

13. Deploy a Referral Strategy

How do you incentivize existing customers to refer new customers?

A strong referral marketing program could do wonders for your business; however, it requires careful planning and needs to ensure the rewards for joining are valuable for your existing customer and whoever they’re referring.

Which customer segments will be the most receptive to taking action with a referral marketing program, and at what point you should reach out to them. Frequent buyers, for example, may be a good starting point.

14. Outline Financial Projections

Here is a final summary of all of the expenses incurred from each of the previous sections as well as their projected growth rates and timelines.

While these will never be 100% accurate, they will provide solid guideposts for your overall marketing strategy and goals to achieve.

As you progress through the year, work off of this document and create parallel documents to track the success/failure of certain campaigns. With any luck, you will exceed your own expectations and have even more budget to play around with the next year.

Already experiencing fast-paced growth?

If so, it might be time to consider Shopify Plus. Unmatched scalability meets hands-on support — including a dedicated Merchant Success Manager to guide you one-on-one into new acquisition and retention strategies, sales channels, and industry trends.


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Conclusion

There is a lot of work that goes into a full ecommerce marketing strategy. For entrepreneurs who are just starting out with the dream of being "the next big thing," it’s important to see what kind of planning goes into a successful entry in the market.

It's also very easy to see how a budget can get stretched incredibly thin. If you're just starting out, it’s recommended you only work with a small handful of channels until you're profitable enough to expand.

If you’re well established and using multiple channels, take the opportunity early in the marketing strategy to discover which channels & segments are wasting your time.

Regardless of who you are, don't try and run a business without a detailed marketing strategy.

About the Author

Tommy Walker is the Long Form Content Editor at Oberlo. It is his goal to provide high-volume ecommerce stores with deeply researched, honest advice for growing their customer base, revenues and profits. Get more from Tommy on Twitter.

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A case study focusing on eBay strategy

This case study summarizes the strategic approach used by eBay to take advantage of increased consumer adoption of the Internet. We have created it as an update for students and professional using Dave Chaffey's books which feature this case study. In this article we summarise eBay's objectives, strategy and proposition and key risks. At the end of the article we give sources to find the latest approaches used by eBay.

Updates will be added at the top of the case study

2018 update: Over 50% of purchases on eBay in the UK from mobile

At the end of 2017 eBay had 168 million 12-month active buyers, an increase from 90 million active in 2010. Nearly two-thirds of transactions are now international. The challenge of growing the business can be seen by the near static GMV in the last three years. Globally 58% of GMV is now transacted on smartphone.

Updating eBay brand positioning using traditional media

In an interview with eBay UK marketing director Gareth Jones, explained that:

“We don’t want to be defined by that online car boot sale reputation anymore. We need to get people to consider eBay in a completely different way. The UK is the petri dish for testing a new approach to rebuilding the brand globally. It is all about a shift away from the marketplace and over to being the ultimate shop”. 

He is candid that a past focus on prioritising digital channels has had a “small impact” on changing eBay’s perception. Despite stating we’re in an age of digital-based marketing, he believes TV is the best channel for brand building. This is based on regional tests that proved TV is the best place to get people to reap-praise eBay as a brand:

“TV is still on fire and a wonderful medium to get neurons into people’s brands in order to rewire their perceptions. If you ask someone where they are shopping on Black Friday then TV is the best place to put eBay at the front of their consideration set.”

Context

It’s hard to believe that one of the most celebrated dot-coms has now been established nearly 20 years. Pierre Omidyar, a 28-year-old French-born Software Engineer living in California coded the site while working for another company, eventually launching the site for business on Monday, 4 September 1995 with the more direct name ‘Auction Web’.

Legend reports that the site attracted no visitors in its first 24 hours. The site became eBay in 1997 and by 2012, it had 112 million active users globally defined as users who have bid, bought or listed an item during the preceding 12 month period, with the total worth of goods sold on eBay $60 billion, which is equivalent to $2,000 every second. Total revenue was $8.7 billion.

eBay's Mission

eBay describes its purpose as to ‘pioneer new communities around the world built on commerce, sustained by trust, and inspired by opportunity’.

eBay’s 2016 report describes the company’s view on current marketing approaches of exploiting Big Data and Artificial Intelligence.

To deliver the most relevant shopping experience, we continue our efforts to better understand, organize and leverage eBay’s inventory.

With our structured data initiative, we are able to begin organizing our vast inventory around products rather than listings and aggregate insights into supply and demand. We continue to broaden the coverage of structured data, which enables us to create and start rolling out new consumer experiences that are modern, simple and differentiated.

One of our goals is to deliver a more personalized shopping experience by determining what products to show our consumers and highlight the incredible price and selection advantages that eBay often provides across categories.

eBay's Revenue model

The vast majority of eBay’s revenue is for the listing and commission on completed sales. While it is best-known for auctions, 80% of UK sales now coming through new items of which the majority are fixed price. UK marketing director Gareth Jones told Marketing Week he wants to focus on top-of-the-funnel consideration: "it wants British consumers to see it as the first choice for buying new items as opposed to its historic online car boot sale reputation".

For PayPal purchases an additional commission fee is charged.

Margin on each transaction is phenomenal since once the infrastructure is built, incremental costs on each transaction are tiny – all eBay is doing is transmitting bits and bytes between buyers and sellers.

Proposition

The eBay marketplace is well known for its core service which enables sellers to list items for sale on an auction or fixed-price basis giving buyers the opportunity to bid for and purchase items of interest. Software tools are provided, particularly for frequent traders, including Turbo Lister, Seller’s Assistant, Selling Manager and Selling Manager Pro, which help automate the selling process, plus the Shipping Calculator, Reporting tools, etc.

Today over 60% of listings are facilitated by software, showing the value of automating posting for frequent trading.

An example of a new Shopper feature which is part of its OVP is the eBay ShopBot on Facebook Messenger.

This uses artificial intelligence to provide a personalized shopping assistant that helps people find the best deals from eBay’s one billion listings.

According to the SEC filing, eBay summarises the core messages to define its proposition as follows:

For buyers:

  • Trust
  • Value
  • Selection
  • Convenience.

In 2007, eBay introduced Neighbourhoods where groups can discuss brands and products they have a high involvement with.

For sellers:

  • Access to broad global markets
  • Efficient marketing and distribution
  • Opportunity to increase sales.

In January 2008, eBay announced significant changes to its marketplaces business in three major areas: fee structure, seller incentives and standards, and feedback. These changes have been controversial with some sellers, but are aimed at improving the quality of experience.

Detailed Seller Ratings (DSRs) enable sellers to be reviewed in four areas: (1) item as described, (2) communication, (3) delivery time and (4) postage and packaging charges. This is part of a move to help increase conversion rate by increasing positive shopping experiences.

For example, by including more accurate descriptions with better pictures and avoiding excessive shipping charges. Power sellers with positive DSRs will be featured more favourably in the search results pages and will gain additional discounts.

Risk factors

Fraud is a significant risk factor for eBay. BBC (2005) reported that around 1 in 10,000 transactions within the UK were fraudulent; 0.0001% is a small percentage, but scaling this up across the number of transactions, this is a significant volume.

To counter this, eBay has developed 'Trust and Safety Programs’ which are particularly important to reassure customers since online services are prone to fraud.

For example, the eBay feedback forum can help establish credentials of sellers and buyers. Every registered user has a feedback profile that may contain compliments, criticisms and/or other comments by users who have conducted business with that user. The Feedback Forum requires feedback to be related to specific transactions and Top Seller status was introduced in 2010 to increase trust in the service.

There is also a Safe Harbor data protection method and a standard purchase protection system.

The fees model that eBay uses is often changed and this can cause problems with users, but the impact is calculated that it does not affect overall sales. In their 2012 SEC filing eBay note: 'We regularly announce changes to our Marketplaces business intended to drive more sales and improve seller efficiency and buyer experiences and trust. Some of the changes that we have announced to date have been controversial with, and led to dissatisfaction among, our sellers, and additional changes that we announce in the future may also be negatively received by some of our sellers. This may not only impact the supply of items listed on our websites, but because many sellers also buy from our sites, it may adversely impact demand as well'.

In common with other global platforms like Amazon, Facebook and Google, eBay note the potential threat of the shift to tablet and smartphone platforms noting that one risk factor is: 'Our ability to manage the rapid shift from online commerce and payments to mobile and multi-channel commerce and payments'.

There is also the common risk factors for online pureplays of retaining an active user base, attracting new users, and encouraging existing users to list items for sale, especially when consumer spending is weak.

Competition

Although there are now few direct competitors of online auction services in many countries, there are many indirect competitors. SEC (2012) describes competing channels as including online and offline retailers, distributors, liquidators, import and export companies, auctioneers, catalogue and mail order companies, classifieds, directories, search engines, products of search engines, virtually all online and offline commerce participants and online and offline shopping channels and networks. In their SEC filing, eBay states that the principal competitive factorsfor the Marketplaces business include the following:

  • ability to attract, retain and engage buyers and sellers;
  • volume of transactions and price and selection of goods;
  • trust in the seller and the transaction;
  • customer service; and brand recognition.

Amazon is one of the biggest competitors since it also has marketplace sellers integrated into its products listings. It’s latest SEC filing notes: Consumers and merchants who might use our sites to sell goods also have many alternatives, including general ecommerce sites, such as Amazon and Alibaba, and more specialized sites, such as Etsy.

Competitive factors today are listed as:

  • ability to attract, retain and engage buyers and sellers;
  • volume of transactions and price and selection of goods;
  • trust in the seller and the transaction;
  • customer service;
  • brand recognition;
  • community cohesion, interaction and size;
  • website, mobile platform and application ease-of-use and accessibility;
  • system reliability and security;
  • reliability of delivery and payment, including customer preference for fast delivery and free shipping and returns;
  • level of service fees; and
  • quality of search tools.

Before the advent of online auctions, competitors in the collectables space included antique shops, car boot sales and charity shops. Anecdotal evidence suggests that all of these are now suffering. Some have taken the attitude of ‘if you can’t beat ’em, join ’em’. Many smaller traders who have previously run antique or car boot sales are now eBayers. Even charities such as Oxfam now have an eBay service where they sell high-value items contributed by donors. Other retailers such as Vodafone have used eBay as a means to distribute certain products within their range.

Objectives and strategy of eBay

The overall eBay aims are to increase the gross merchandise volume and net revenues from the eBay marketplace. More detailed objectives are defined to achieve these aims, with strategies focusing on:

  • 1 Acquisition – increasing the number of newly registered users on the eBay marketplace.
  • 2 Activation – increasing the number of registered users that become active bidders, buyers or sellers on the eBay marketplace.
  • 3 Activity – increasing the volume and value of transactions that are conducted by each active user on the eBay marketplace.

The focus on each of these three areas will vary according to strategic priorities in particular local markets. eBay marketplace growth was driven by defining approaches to improve performance in these areas.

  • First, category growth was achieved by increasing the number and size of categories within the marketplace, for example Antiques, Art, Books, and Business and Industrial.
  • Second, formats for interaction. eBay Stores was developed to enable sellers with a wider range of products to showcase their products in a more traditional retail format including the traditional ‘Buy-It-Now’ fixed-price format.

eBay has constantly explored new formats, often through acquisition of other companies, for example through the acquisition in 2004 of mobile.de in Germany and Marktplaats.nl in the Netherlands, as well as investment in craigslist, the US-based classified ad format. Another acquisition is Rent.com, which enables expansion into the online housing and apartment rental category. In 2007, eBay acquired StubHub, an online ticket marketplace, and it also owns comparison marketplace Shopping.com.

Finally, marketplace growth is achieved through delivering specific sites localized for different geographies as follows.

You can see there is still potential for greater localization, for example in parts of Scandinavia, Eastern Europe and Asia. Localized eBay marketplaces:

  • Australia
  • Austria
  • Belgium
  • Canada
  • Singapore
  • South Korea
  • Spain
  • France
  • Germany
  • Hong Kong
  • India
  • Ireland
  • Sweden
  • Switzerland
  • Italy
  • Malaysia
  • Netherlands
  • New Zealand
  • Philippines
  • United Kingdom
  • United States

In addition, eBay has a presence in Latin America through its investment in MercadoLibre.

eBay’s growth strategy

In its SEC filing, success factors eBay believes are important to enable it to compete in its market include:

  • ability to attract buyers and sellers;
  • volume of transactions and price and selection of goods;
  • customer service; and brand recognition.

This implies that eBay believes it has optimized these factors, but its competitors still have opportunities for improving performance in these areas which will make the market more competitive. According to its 2010 SEC filing: Our growth strategy is focused on reinvesting in our customers by improving the buyer experience and seller economics by enhancing our products and services, improving trust and safety and customer support, extending our product offerings into new formats, categories and geographies, and implementing innovative pricing and buyer retention strategies.

Updates on eBay case's study information

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