2019-06-06 15:07:42 Growing a Business English Discover different ways to stay competitive when you're running an online business. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2019/06/GettyImages-670884683.jpg https://quickbooks.intuit.com/ca/resources/growing-business/staying-competitive-in-a-crowded-online-retail-environment/ Staying Competitive in a Crowded Online Retail Environment

Staying Competitive in a Crowded Online Retail Environment

7 min read

An online retail business is a great way to sell your products to customers around the world. As the online market grows, however, competition is tough, that’s why we have broken tips to help you be competitive in the crowded e-commerce space.

Maintain Your Prices

In the face of steep competition from other online retailers, you might be tempted to drop your prices. While this pricing strategy might bring in more customers in the short term, it’s not usually sustainable over time. Why? To start, a drop in prices also means a decrease in profits, which most businesses can’t handle for long. Lower prices also create a perception of lower quality. When you’re charging significantly less than competitors, customers might wonder what’s wrong with your products. For many online retailers, it’s a good idea to maintain prices and increase profits by bringing in more customers.

This isn’t to say that it’s not possible to disrupt the market with a lower-cost product. If you choose to go this route, you may need to adjust your entire business model. Some ways you can sustain low prices are:

  • Limit your selection of products
  • Streamline your operations
  • Cut costs in your business
  • Negotiate lower prices from suppliers
  • Offer products with at least one better feature than your competitors
  • Eliminate frills such as fancy packaging or free shipping

Get to Know Your Customers

Customer insight is one of the most underrated parts of online business — and one of the most valuable. The more you know about your customers, the easier it is to tailor your operations to meet their needs. But how do you get to know your audience when they’re anonymous internet users? Thanks to technology tools, this process is easier than you think.

Google Analytics: This tool tells you how customers behave on your website. You can see the most-visited pages, find out how customers move through your website and see how long they’re spending on each page. Google Analytics also tells you:

  • When customers visit your website
  • Where your customers are from
  • The search terms customers use to find your website
  • How many visitors come back to your site
  • Which of your digital ads bring the most traffic

Social media analytics: These analytics help you understand how your audience reacts to each post. You can see which type of jobs:

  • Get the highest engagement
  • Encourage customers to click through to your website
  • Earn you additional followers
  • Get the most comments and questions

What’s more, the analytics can tell you how old your customers are, where they’re from, and whether they’re male or female.

Surveys: Already have customers? Surveys can help you get to know them. You might add a single question to the end of the ordering process, for example, or put a short survey on your website. This works best when you want a specific piece of information, such as “How did you hear about us?” or “Which of these products would you be most interested in seeing from us in the future?”

Once you know and understand your customers, you can better serve them. Do your Instagram followers click through to your website to see “helpful hints” posts? Try writing more of these posts to increase traffic, and add product links to boost sales. Are your website visitors dropping out halfway through the ordering process? You might want to invest in a one-click shopping system to retain more buyers. You can also make connections with prospective customers by focusing on a well-defined product niche that shows the potential for a significant profit. By analyzing your target market smartly and thinking about what problems your product solves, you can build an authentic relationship with customers who come to see you as the answer to their needs.

Build Brand Loyalty

It’s no secret that keeping an existing customer is cheaper than bringing in a new one. That’s why it pays to invest in building brand loyalty. As an online business owner, this means you need to offer an incentive for your customers to choose your business over the competitors. Some ways to build loyalty are:

  • Send special discount codes to repeat customers
  • Allow customers to make profiles for faster checkout
  • Create a rewards program
  • Accept popular online payment methods
  • Recommend useful products based on customers’ purchase history

Another way to build loyalty is to differentiate your product in a way that speaks to the customers’ needs. If your buyers are sick of expensive shipping fees, you could offer free shipping and returns.

If your competitors send products in plain, boring boxes, you could invest in beautiful packaging to delight customers. Small, thoughtful touches can go a long way toward creating repeat business.

Reach a Broader Audience

Part of running an online business is getting your company in front of as many people as possible. If customers don’t know about you, they can’t buy from you. As a first step, it’s crucial to build a robust and ongoing search engine optimization strategy. Great SEO helps your website show up in search engine results, so customers can find it when they’re searching.

Another option? Borrow other companies’ audiences through collaborations. Identify another online business that serves similar customers, but isn’t selling a competing product or service. Then, work out a joint venture that benefits both of you. Imagine that you sell essential oils, and you know that many of your customers practice yoga. You could find an online yoga instructor and:

  • Write a guest blog post for the yoga instructor about using essential oils in a sun salutation
  • Hold a free online seminar for the instructor’s followers about the benefits of essential oils
  • Offer a discount code for the yoga instructor’s customers
  • Give the yoga instructor free samples to review on her social media

This process creates free content for the yoga instructor, and it introduces your products to a whole new group of people.

Online efforts are only one way to reach potential customers. Events in which you connect with customers face-to-face can also drive online sales. To make your products more visible and accessible, try holding events in your area. Simply find where your ideal customers are gathering, and create a temporary physical presence for your business. If you’re a fashion designer, you could hold a special pop-up shop at a local mall or festival. If you sell energy gels for endurance athletes, get a booth at a running expo and hand out samples. Getting your products into customers’ hands can help you win fans who can, in the best-case scenario, act as unofficial brand ambassadors for your company by spreading the news of your products to their friends. Consider starting the ball rolling by giving out free samples to expand your audience.

Be Willing to Change Your Online Retail Business

Change happens fast on the internet, and as a self-employed business owner, you can stay competitive by adapting quickly. Think about Netflix. When streaming media hit the market, the company ditched its DVD service and changed its entire business model. As a result, it’s now one of the biggest media providers in the world.

While you might not be as big as Netflix, you can use the same strategy. First, you must stay on top of your business and industry trends so you can take action. Is a new low-cost competitor about to hit the market? Upgrade your products to stay competitive. Have sales for a specific product dropped off? Try amping up your marketing or replacing the item with something that’s more relevant to customer needs. When you don’t hesitate to pivot, you can adjust to changes quickly and keep your small business online longer. Changing your e-commerce website to keep it updated, with a focus on an attractive, modern look and overall ease of use, can also make a difference.

Stay Ahead of Your Competition

The online business world is huge and ever-changing. Your goals as a small retailer are to find out what your competitors are doing, and then find ways to do it better or differently. Thanks to the internet, it’s relatively easy to keep tabs on the competition. You can:

  • Follow them on social media
  • Visit their websites regularly
  • Read their blogs
  • Set a Google alert for their company names
  • Join their email lists to get a heads up about product launches and sales

With this information, you can see what your competitors are doing well and use a similar strategy in your own business. More importantly, you can see what opportunities they’re missing. If you see that your competitors don’t have blogs, you could start one and position yourself as an expert in the industry. If your products have more features or better performance, you can hype up this difference in your marketing. You can also look for gaps in the market and expand your product line accordingly to offer products that stand out when compared to the competition.

When you’re selling products online, staying competitive is an ongoing effort. By staying on top of your operations, customers, industry, and competitors, you can set up your company for success. As you build a strategy, keep in mind that higher sales and better marketing aren’t the only way to put more cash in your pocket. With a cloud accounting program like QuickBooks Online, you can keep track of expenses and maximize profits.

 

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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