Bogdan Aron, Chief Product Officer 2Parale, shared from his experience in eCommerce world, putting up together a list of 10 things from his first encounter with the sector which are applicable also 10 years later.
Bogdan wrote this editorial to promote the 6th edition of eCOMTeam, an event launched by 2Parale and currently organized by Wall-Street. During the event, Bogdan, together with Cristina Berdea (Farmec), Valentin Radu (Marketizator) and Alexandru Jijian (Evozon Systems) will try to identify and offer solutions for the most common and important problems in eCommerce.
Below, the English version of the article he wrote on this theme (the Romanian version is available on Medium.com)
“Hypermarket to your place!” – my first experience in eCommerce
Ten years ago, I was launching an online store together with 3 partners. The idea sounded great on paper: one could order from any hypermarket and we were delivering the products the same day for a fee equal to a fraction from the total value of the basket. This way, one could get away from crowds and save precious time. I loved the slogan: “Hypermarket to your place”.
Initially, we wanted to build a website from scratch. But we found eCommerce solutions which were already developed and allowed us to launch faster. We chose osCommerce. It was all right, because we could install it fast on the hosting we already bought, we found many themes easy to customize and a multitude of add-ons. Moreover, the community was strong and there were many forums where you could find answers to your questions.
We were at the beginning and we had a lot of enthusiasm. But this enthusiasm was compensated with lack of experience. And that didn’t care about our enthusiasm. Or of the fact that, in the first months, the orders were scarce and we were spending fast the money we gathered. We made a few thousand flyers and we distributed them in the residential neighbourhoods and we also joined numerous web directories, but results were late to appear.
We started analysing the problem and we discovered in the the admin solution from our hosting (Cpanel) the fact that we had a service offering us info on website’s traffic. It was a rudimentary web analytics. For the nostalgic ones, a presentation is available here. Later on we found out about trafic.ro and Google Analytics.
The problem we identified was that we didn’t have visitors on the website and people weren’t finding us in Google searches. A few days passed until one of us figured it out: it was a technical problem. The osCommerce version we were using was introducing session ids within the URL, generating an infinity of pages with the same content and Google didn’t know which one to index. Later on, we would find out that it is a typical problem and what we needed is called SEO. Little later, we also found out about Google AdWords.
After solving the problem of the duplicate content, Google indexed us pretty fast and orders started to appear. We started to deliver tens and hundreds litres of water with each order. And that was messing up with our calculations, it was expensive and complicated to deliver so much water. We had an operational problem, one I later saw that the big hypermarkets entering online faced also: people order a lot of water. That leads to a small value of the basked when reported to the quantity of products.
The business wasn’t sustainable, and we had a lot of problems and little resources to solve them. And although we decided to close the shop, it was a fantastic period of accelerate learning for all 4 of us.
10 things I’ve learnt in eCommerce
- The logic behind the decision to launch an online store doesn’t relate with the business itself all the time. Sometimes, someone is very passionate about something or is bored at home and his partner helps with money to make a hairstyle saloon / coffee shop / online store or a decision was made at the HQ. This means the store ends servicing not the needs consumers have, but a need the future owner has.
- It’s cool to have an online store, but there are also many less cool things in it: you must create a company, interact with the state, take care to be all good legally and financially, negotiate with providers and so on
- Everything costs. From the moment you found a company, you start having 0 income and a multitude of expenses: rent, website, people, promotion, stocks etc
- An idea is not a plan and the plan is important. And even more important than the plan (that you will change many times anyways!) is the planning process. An xcell in which to simulate easily different scenarios can tell you versions of the future that you might want to prepare for.
- Four people aren’t necessarily many when you want to start a project. But it is important for the founders to have different competencies so they would be able to cover the start needs of the business. These essential competencies in eCommerce are: commerce, tech and online marketing
- The tech solution must allow you to start quick, to scale and to be flexible. Don’t expect for the perfect design and don’t pick a provider you will have a hard time changing. If you are at the start, a SaaS eCommerce solution can be a good choice as it eliminates a lot from the need of tech competencies
- It is difficult and very expensive to bring people from offline and make them buy online. Start with the people that are already online and need the products you are selling. Capture the idea that exists already.
- Online stores don’t have a commercial avenue. You must create that and, for that, you need to invest in promotion. There are some basics that were used 10 years ago, that are still being done today and which probably will be done in 10 years from now too: SEO, affiliate marketing, social media, PPC or e-mail marketing.
- Measure. Install Google Analytics and set the eCommerce tracking. Start with the basic things: traffic and traffic sources, users conduit, conversions’ cost, products’ performances and so on. Very few online store owners know how much a conversion costs on each acquisition channels costs
- Your work isn’t done when you registered the order on the website (as it happens in the physical store). You must handle the packaging and delivery via courier. And then, you will see returns, unpleased customers, clients who will call for warranty. Think about all that before figuring out that it is expensive to deliver water and be forced to close.