Every business has its lifecycle and e-commerce is not an exclusion. Although there’s no one-size-fits-all formula for lasting success in this space, as every brand is unique, there are patterns and stages that online businesses go through.
Knowing where you’re in the e-commerce lifecycle will help you determine your bottlenecks with more clarity and realise what you need to do to avoid business stagnation and get to the next level of growth.
Let’s get to it.
Stage 1 – Start-up & fast growth.
Challenge 1: The main challenge in this stage is not to burn through the little cash the business has.
Challenge 2: Another one is dealing with the regular variety of issues bidding for more time and money.
Focus: The focus on this stage should be on establishing a consumer base and the presence in the market, besides tracking and conserving cash flow. Some of you will choose different models to pursue such as Kickstarter, Facebook Ads, influencers, etc. Regardless of your choice, you must keep your business agile so it can quickly respond to change.
Stage 2 – Plateauing growth or stagnation
Challenge: it seems like many businesses reaching this second stage of the e-commerce lifecycle tend to panic and look for quick-fix solutions to perceived issues. Instead of jumping from one quick fix to another trying to find a way to return the desired growth that you had experienced in the start-up stage, you need to put your efforts into more long-term and strategic development.
Focus: Most of the time it’s the mindset shift that can help us make a lasting difference. In other words, you need to start having a more mature approach to the growth of your e-commerce brand. Invest in learning about how can you increase the lifetime value of your customer, create a better customer service, add more products to increase AOV or upgrade your post-purchase experience.
From the business point of view, you should also keep the focus on the bigger picture. The issues of marketing and advertising ecosystem, competitors, or the changing tastes of the customers can quickly end all that it has worked for.
Stage 3 – Renewed growth by implementing change (new marketing channels, paid media, features, resources/people)
This is where things get seriously serious. If you got through to this stage you would need to pay more attention to the research and analysis which is required to optimise your advertising and marketing budgets.
To have a team of top-notch marketers who can help you figure out much complex media buying and customer retention strategies is a must. Bigger boys are willing to spend $1 and wait for two, three and even 6 months to get their ROAS back. It’s because they have a very strong back-end that allows them to worry less about how much they spend on customer acquisition.
Understanding the stages of e-commerce business development helps you to adapt your marketing strategy goals to what is most needed at that moment to help your business grow with easy and be successful. It is not a difficult science, just think about the natural order of things.