How to Scale an eCommerce Business: 5 Effective Tactics
“At the height of the COVID-19 pandemic, 10 years of ecommerce growth happened in just 90 days.” – ShopifyPlus, The Future of Ecommerce 2021 Annual Report
Since COVID, we’ve seen more growth in eCommerce than the last 10 years combined. There has been an influx of tools and investments coming into this space, which means a few things for those interested in growing an online business.
For one thing, it’s never been easier for a business to get started online. There is more eCommerce competition than ever, even among the bigger players. Where certain companies were dominating large swaths of the online retail space only a few years ago, now these same companies must focus on micro niches to keep an edge among their growing competitors.
Consider the industry of mushroom coffee as an example. Even as a micro niche between supplements and coffee, mushroom coffee makers are suddenly facing a lot of competition.
This doesn’t ruin your chances of scaling a profitable eCommerce company. It simply means you must move forward with new tactics so you stand out and find customers. In this article, we’ll show you how to scale an eCommerce business, focusing on five actionable tactics.
Tactic #1 – Focus on brand and growth
Scaling in eCommerce over the next few years will come down to how well you juggle two often-contradictory business goals: brand and growth.
Most companies lean one way or the other. In the context of brand, these companies use good storytelling and create site experiences that wow you. They offer a clear and unique value that customers recognize, differentiating their brand from anyone else.
The flipside are companies focused on growth. You couldn’t tell one of these companies apart from their competitors, but these growth eCommerce companies put everything in the right place: industry-leading usability, growth hacks to increase average order values, and bleeding-edge tools for customer acquisition.
Companies focused on building their brand are great at retention because they’re memorable. Growth businesses are good at acquiring customers but have low returning customer numbers.
In 2021, scaling eCommerce businesses can’t afford to just be one or the other. With rising CACs and increasing competition, you need a blend of both. Find the middle ground. Make sure the brand experiences are memorable—while also improving average order value and customer acquisition through conversion optimization.
Tactic #2 – Use a scalable team
Leverage a team that can scale with you over time. When you’re a small business making under 5 million, most of your money will be allocated to customer acquisition and building a great product, so that customers fall in love with what you’re selling.
As you do that, you’ll also need to work with people—freelancers, agencies, and in-house developers—to create your online experience. The problem is, you’ll go through high growth periods as well as periods of slow or stalled growth. There will be ups and downs. No business grows in a diagonal line, and you’ll need to be able to scale your roadmap up and down with your momentum.
In other words, you’ll need a scalable product team: UX designers, UI designers, developers, application engineers. You’ll need a team that expands quickly to take advantage of seasons of growth and contracts immediately when you need to divert resources.
This became clear through the pandemic. At the beginning, we saw many companies who needed to contract who were not able to. Now that things are opening up, eCommerce leaders can’t hire the talent they need fast enough to keep pace with their growth.
Learn more about hiring scalable product teams here.
Tactic #3 – Leverage a scalable tech stack
Use a tech stack that matches where you are in your business—and scales with your growth. Using too large of a tech stack in the beginning hinders your ability to remain agile or flexible enough to make changes in the early stages of your business. The enterprise level software can also eat a significant portion of your budget. And during your early stages, you don’t want to be spending too much money on technology.
You need flexibility, the ability to move where you need to, when you need to move there. Enterprise is the least scalable. It’s built for quality and consistency, but can also be rigid.
So when you’re choosing technologies and building your tech stack, understand that the tech stack is always going to have to evolve based on your stage of business. Leveraging technologies—like modular architecture—that can expand and contract with you is vital to maintaining the flexibility you need, without overspending.
Tactic #4 – Start with a narrow niche, then expand
As I alluded to in the introduction, even micro niches are facing unparalleled eCommerce competition. That’s why it’s more important than ever to start with a narrow focus. Specialize. If you’re selling a shoe, just sell one or two styles of that shoe. Get one or two core pieces and really build out from there. This will allow you to test a demographic and this strategy reduces the number of variables you have in play.
Do one or two things better than anyone else in the business. Build a reputation around a handful of core products. Later, as you develop a deep understanding of your customers and what they care about, you can choose to expand. But don’t rush into producing an expansive product line.
Just do a couple of things really, really well.
Tactic #5: Leverage qualitative information early and often
Many players in the eCommerce space rely too much on average order value, Google Analytics, and cost per acquisition data—quantitative metrics. These only represent the big-picture health indicators of your business. But not enough businesses take the time to identify the qualitative information right at their fingertips.
What are the core problems your customers are facing? Are they satisfied with your product? Are they dissatisfied? What precisely do customers like or dislike about your product or company?
Qualitative information answers why. It tells you when customers are delighted by an experience—or how you can make their experience better.