How to Maximize E-commerce to Grow Your Business

By Gregg Wartgow, Special to AEM -

Many organizations that are looking to launch an e-commerce platform are overly obsessed with website traffic. It's understandable. More traffic, logic would suggest, equates to more potential buyers, which will ultimately equate to more transactions.

Given that assumption, the organization tries to be all things to all people. But in reality, that line of thinking can initiate a death spiral for a company trying to engage in e-commerce. Trying to be all things to all people often creates value for very few.

To be successful, the facilitator of an e-commerce platform should be more focused on solving a genuine problem a specific type of customer is having. Then, in order to create ongoing value, the facilitator must consistently solve that problem in a trustworthy way.

Geoff Parker and Josh Creamer, co-founders of consultancy firm FP Transformation (FPT), talked about these important topics during an AEM Member Education Webinarpresented earlier this month. FPT helps organizations design, implement, and accelerate their digital product platforms and AI-enabled business transformation strategies by utilizing a series of organizational assessments.

Following are some key takeaways from AEM's webinar…

Why E-Commerce

"The first thing we like to see is if an organization's efforts are guided by a clear and compelling vision, along with clear goals and desired outcomes," Creamer said. Organizations also need a well-structured problem statement from the perspective of a well-defined and segmented customer.

"You can't serve five or seven different customer profiles all at once in the beginning," Creamer said. "What specific problem are you trying to solve for a specific customer? Then you need to validate the importance of that problem from the lens of that customer."

This leads to FPT's second organizational assessment, which requires a market segmentation analysis based on primary research. "Abstract, secondary research reports from big consulting firms will get you nowhere," Creamer said. Companies need to do their own research so they can understand how the target customer will use their platform. That research will provide the insights necessary to build a holistic customer experience, which is what creates value and helps mobilize more buyers.

Creamer reiterated the importance of starting with a specific customer segment and expanding from there.

"We often see that organizations get really excited about their broader ambitions, but don't match that with the more focused discipline of building a specific use case for a specific user," Creamer said. Once that specific type of customer begins using the platform, an organization can begin providing additional use cases and providing more value, which lays the groundwork for attracting more users.

Awareness is Everything

The vision of creating an e-commerce platform must attain buy-in from everyone in the company, from the project team tasked with the execution, to senior leadership and the board of directors. Everyone must also be aligned on the strategy to make it happen, as well as the desired outcomes of facilitating a marketplace. "Additionally, leadership must be aligned on the organizational structure and resources needed to implement, scale and operate the platform," Creamer added.

Execution is where a lot of companies miss the mark. The broader vision and strategy are well-defined, but the project isn't scoped in a way that the company can actually execute. "You need a focused lens on your short and medium-term objectives that will help you build toward your longer-term vision," Creamer said.

This leads to the fifth organizational assessment, recognizing your delivery capabilities. Does the project execution team understand the solution it needs to build to create value by solving the customer's problem? Do they know how to build it, as well as scale it and operate it? These are the types of questions that need to be answered and resolved before an organization rushes an e-commerce platform to market.

Building Trust

When creating a marketplace, an organization should take a step back and think about what it is really doing.

"You're putting together a set of rules for how the various participants are going to interact with one another, with an eye on creating value for both buyers and sellers," Parker said. "Once you start thinking about it that way, you start thinking about the governance mechanisms."

Ungoverned marketplaces are susceptible to fraud and abuse. "That could be really bad news for a sponsor of a name brand company that is trying to mount a marketplace," Parker said. "That's why it's important to be mindful of what structures you'll put in place to help promote the positive, which is quality content and motivated buyers so you can create valuable exchanges. At the same time, you want to be able to detect and prevent things that destroy value."

At the end of the day, thriving e-commerce platforms create value by solving customer problems, not just allowing for the buying and selling of products. That is easier said than done. Taking the time to self-assess your vision, goals, and capabilities is essential to ensuring both a successful launch and enduring success.

About the Speakers

In addition to the work they do through their consultancy firm FP Transformation, Geoff Parker and Josh Creamer are also accomplished researchers and educators. Parker is a Professor of Engineering at the Thayer School at Dartmouth College. He is also a Visiting Scholar at the MIT Sloan School of Management, and a Research Fellow at the MIT Initiative on the Digital Economy. You can reach Parker at [email protected].Creamer is a lecturer and PhD researcher at MIT. You can reach him at [email protected].

About AEM Member Education Webinars

AEM members have exclusive access to help them stay on top of emerging issues and trends via member education webinars. Experts break down industry issues and pinpoint critical changes in the landscape to help attendees refine their company's strategy.

For more information on the upcoming series of member education webinars, contact your Account Success Advisor.

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