The Competitive Nature of the Internet

The internet is an extremely tough and competitive world, where almost everyone is on a level playing field. It is therefore absolutely paramount for a company starting up or moving into the e-commerce environment to find themselves a sustainable competitive advantage through developing their own existing distinctive competencies, whether by selling exclusive products, providing exceptional levels of additional customer support, or ensuring the actual site is easy to navigate yet attractive, innovative and unique in its design.

It is very important to be aware of the tactics being used by your competitors online; as there are various factors they could change/add on/stop using which could adversely affect the number of customers using your site ahead of another to make their purchases online. These include basic features such as price; some companies base their price on what their competitors are offering, and ensuring theirs is always the cheapest/best deal. Post and packaging is a cost that all e-tailers have to contend with, in order to get their product(s) to the customer. Deciding on what rates to charge the customer, whether making a loss by rendering all ‘p&p’ free when a certain amount is spent, or charging more than necessary to regain any profits lost by offering the product itself at a reduced price, is an important decision. Some e-commerce stores may require a membership before you can shop online, which could add a certain prestige factor to the experience, but could also work the other way and repel potential customers when they realize they have to pay for the privilege of simply browsing what is on offer.

The website itself needs to be well built by an experienced web designer, preferably with SEO and SEM experience, although this is not essential as a separate person can be employed to make the site search engine friendly and build in all the tags and links once the design has been completed. A good web designer is well worth spending the money on, because a poorly built, home made site will not only be unappealing to customers, but give them no faith in the security of the site, meaning they will be unlikely to hand over any credit card details. Many sales, and therefore potential profit, could be lost by trying to cut corners with the initial preparation.

Besides the actual design of the website, the marketing and promotion of it is even more essential. A perfectly designed, attractive looking site won’t do anyone any good if no one knows it’s even there! SEO and SEM look to ensure that when a keyword or phrase is typed into a search engine, your website is as high up on the list, or ‘rankings’ as possible. The higher up the better, but even more important is to be on the first page of results – browsers very rarely look further than that. This is achieved by making sure these keywords appear regularly in the text on the website, so that when the search engine generates its results they can be picked up quickly. Another popular, but expensive method is known as Pay Per Click advertising, where companies are guaranteed a small ad on the results page for certain keywords that they bid on. However, only when the advert is clicked on, do you have to pay the search engine the agreed amount, hence the name ‘Pay Per Click’. It is easy to see why costs generated from this can add up – just because a browser clicks the ad, it doesn’t mean they will make a purchase from the site, so there is often a lot of money spent for a small return.

Businesses not currently involved in e-commerce should certainly jump on the bandwagon sooner rather than later, but it is important to view, and budget for, the e-commerce as a separate sales channel and plan accordingly, to achieve the best success.

Adrian Lawrence
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