How Can your E-Commerce Survive in a Highly Competitive Environment


Today, as a few years ago, opening an online store is one of the most popular ways to start a business. We can say that the dream of own a candle factory in the twenty-first century has transformed into a dream of a small but profitable online store. However, if in the past it did not take much money to trade on the Internet, today it is not so. I risk assuming that soon to build a candle factory in the network will be even harder. That is why I recommend getting extensions at Mageworx.

I think it is clear to everyone that in the near future the border between offline and online will be erased. Online stores will develop logistics and offline points, and traditional retailers will become even more active online. The very name “online store” will turn into an atavism, it will be replaced by some other term, as the car replaced the “horseless carriage” – a popular form of transport at the beginning of the last century. For the buyer, everything will turn into single retail, where there will be neither online nor offline. Such erasure of borders, certainly, will lead to the fact that the competition will become more intense – after all, everyone will start to cook in one big boiler. And small online stores in this boiler will be especially difficult (although they are still not easy).

How can you survive in this cruel world?

In my opinion, a business store consists of four key elements: assortment, price, the site and service itself. I noticed that many online retailers “start from the end” and try to bet on service.

People think: there are big clumsy competitors, and call center they are callous and unresponsive, and couriers unpleasant, but I will be with each client to blow dust – and be able to compete. It’s a dead-end road.

Another year or two you will last so long, because now the market has an opportunity to stand out, just teaching couriers to smile. But the booth will not last long – soon good service will become the market standard, will be widespread, and it will be adjusted, including your larger rivals. And what will you do then? Service is not a strategy. Good service is about hygiene, not super-results.

Another common approach is price competition. As a rule, owners of small online stores hope to be cheaper than market leaders in their category. And to build on this business. They should not hope for it. You work from home, and a large company has many administrative costs? But no one canceled the effect of economies of scale. And, as a rule, it turns out to be more substantial. So I do not believe in the price advantage of small players. Besides, the management theory teaches us that the “strategy of the best price” is suitable for only one company on the market. Usually, this company is not a small shop.

What remains? Assortment – you should start with it because the only assortment in its unique niche can be your long-term competitive advantage. But here you have to be careful. People often think: “I’m a much more focused player than my big competitor, I’ll make the best website in my category, I’ll have better content, better catalog, better photos – a lot of things will be better. That’s right, there will be. There’s only one problem: the buyer doesn’t need it. After a certain level of content quality, the buyer becomes indifferent. And your competitors will reach this basic level of quality three months after they decide they need it. And they will take all your best ideas. So, as in the case of the service, a niche product in itself – that is, the site and its content – not a strategy.