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Home / Tech / E-commerce / EFB: Sales (Bonus) – Who will survive when e-commerce bubble pop?

EFB: Sales (Bonus) – Who will survive when e-commerce bubble pop?

It would not be that wrong if I say we are living with a tremendous “e-commerce bubble” (especially in hot markets like Turkey). As a result of each economic bubble, unfortunate things will come up and there will be winners and losers at the end. Don’t you feel terribly curious about who will be those winners?

My prediction is that the websites that will be selling not only the products/services, but also the solutions will prevail while others will be shutting down.

My observation is that the trend is going through adopting solutions selling approach. This had been noticed decades ago by many firms in the offline world. Meanwhile in the online world, it is harder to develop such an approach across the business stakeholders especially when website owners are busy with enjoying easy-money coming over. However, the only way to survive in this extreme competitive e-commerce markets will be to switch sales model from traditional selling to solutions selling. Once this is achieved, the next challenge will be transformation from solutions selling to consultative selling, which is even much harder.

In current state, the ones who help customers to make a purchase decision in a convenient way with a good communication of product benefits are the winners. Apparently this level is highly sufficient to be recognized positively by customers and to take the business to the next level in terms of profitability. What I expect is that this will not work when market becomes even more competitive. The only way to survive would be to create customer value by addressing important customer problems, rather than focusing solely on the product.

In order to make it simple, I prepared a table for you to describe the characteristics of losers and winners:

 

son yazi yeni

 

Let me clarify the last two:

1) Reactive vs. proactive

By nature, we can claim that e-commerce business capabilities are rooted as “reactive”. You implement marketing actions, and then wait for customers to visit, view your products, add some of them to your cart, do the payment and leave. And let’s admit that this simple life-cycle was the main reason you were attracted at first to the idea of starting up an e-commerce business 🙂

Although thousands discuss the significant advantages of online trade for about 4-5 years, no one clearly stated the main disadvantage of it comparing to the substitute (offline): E-commerce is not as flexible as traditional commerce. What do I mean by this?

Imagine yourself in early 20th century, owning a small patisserie on one of the central streets of Paris, which is full of  frequent visitors. You would probably have too many competitors nearby. Ultimately, you would have to differentiate your products, (maybe with instant bundles) and also you would try to attract customers with customized prices,promotions or services. You would try different sales strategies tailored to each segments that you think your customer belong to. You would have your negotiation strategies in your mind 24/7.

This is must be the end-game you should focus in your e-commerce business. 

 

2) Focus on online competitor vs offline world:

I think this one is the most important message that I can deliver out of this article. Most of the players set their vision based on the major players of e-commerce in their industry. Where as if you want to be the champion, you should always keep track of what is going on in the offline world. Don’t underestimate the existence of offline world’s share in your industry, and also don’t disregard the opportunity coming out of the transformation of trend from offline trade to the online trade.

In my opinion, the most crucial weakness of e-commerce is that it is not as flexible as traditional commerce. Whereas this also includes great improvement opportunity. If technical capabilities  of e-commerce can be incorporated with this flexibility, that will be the nightmare of all offline players. 

 

Why don’t we see e-commerce players worried about these issues above?

Main reasons of the hesitation (or even no interest) of achieving might be:

1)      To act as an offline business is more costly these days.. (You have to hire thousands of customer service agents to serve 100% customized way to your customers)

2)      Most of the small players are enjoying their current volume and they ignore the upcoming threat to the market

3)      Focus of short-term sales

4)      Lack of Big Data focus (Not enough attention to analytic capabilities, technologies…)

 

Image source: Flickr

Orkun Basaran

One comment

  1. the losers winners matrix is overall applicable but im not sure about your “differentiation by people” point. whats meant by that?

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