April 2, 2020
How to Create a Successful Online Store (5 Killer Tips)

How to Create a Successful Online Store (5 Killer Tips)

Successful online businesses are everywhere
we look: Warby Parker, Brandless, Dollar Shave Club, Bonobos. I could go on and on with this list but the
thing is — what does it take to build the next successful online store? Hi everyone! My name is Pawel Ogonowski and
I’m the Ecommerce Optimization Guy. Usually, I talk about ecommerce optimization
but it’s just a part of the things it takes to build a successful online business. That’s why today, I’ve got 5 bulletproof
tips for you to follow if you want to create the next billion-dollar online store. And as far as I know, they’re also applicable
if your dreams a bit smaller. One: Identify an Underserved Customer Segment
That Can Benefit From Better Product / Service All successful online retailers began by pinpointing
a dissatisfied or underserved market. Casper revolutionized the highly-competitive
mattress space by targeting the biggest pain every customer faced. What was that pain point? An overwhelming number of options. People were bewildered by the sheer number
of options and multiplicity of features that were available. Casper understood that more isn’t always
better and created a small range of exceptionally designed mattresses. They topped that up with a 100-day free “sleep”
trial and an innovative way to deliver their product. Warby Parker, an online retailer of prescription
glasses and sunglasses, is yet another example. When they started out there was a single behemoth,
Luxottica, that served most of the market. Luxotica is a vertically integrated company
responsible for most of the well-known brands that you know: Ray-Ban, Persol, Oakley, Chanel,
Prada, Versace, and DKNY. So if you wanted some trendy eyeglasses then
you knew where to go. There was just one problem. These eyeglasses were ridiculously expensive. Warby Parker noticed this gap. They created a USP that consisted of a mix
of designer branding, superb customer service, high quality, and moderate price. And that’s why today they’re on a raise. So the first thing you should focus on is
finding an underserved customer segment that can benefit from better product or service. Two: Create an Experimentation-focused Culture The internet grants you a unique opportunity
to make improvements very quickly when it comes to your product-market fit and marketing
messaging. Heck! That’s what this YouTube Channel is
all about! At the very earliest stages, your main task
is to develop a great unique selling proposition USP Of course, you need to A/B test your ideas! This is what Susty Party used to validate
its USP of non-toxic, compostable party tableware. When it showcased its USP on the homepage,
as opposed to having a generic design, conversions increased by 250%. Once you’ve established a rock-solid USP,
it’s time to adopt the “keep on testing” mantra. Please, just don’t stop till you reach the
velocity of Fabletics – a brand owned by TechStyle Fashion Group. Adam Goldenberg, who happens to be the CEO
of the group, revealed the number of customer experience tests the company had undertaken
in the previous year. How many tests do you think they have conducted? What was your guess? 100, 200, 400? Not even close! 2,000 experiments. Can you imagine? TechStyle’s teams approach traffic acquisition
in a similar, agile way. They design and test a whopping 35,000 ad
creatives every year and verify 150 TV commercials. In just 16 days from the start of their new
year’s advertising campaign, they were able to come up with a creative and a landing page
that were 2 times more effective than those that were served on the first day. Or at least that’s what their CEO said during
Shoptalk. Three: Over-Deliver on Customer Expectations Have you heard of the Net Promoter Score yet? It measures customer satisfaction by asking
a single question: “How likely is it that you would recommend our company/product/service
to a friend or colleague?” and collecting responses on a scale of one to ten. By working to boost NPS you’ll achieve two
important outcomes. First off, you’ll be pushed to develop processes
that deliver new, innovative ways to boost customer satisfaction, differentiating yourself
from competitors and providing an array of unique selling points (USPs) in the process. Two, delighted customers are much more likely
to promote your store and keep coming back. The knock-on result is a boost to your average
customer lifetime value, which is arguably the most important ecommerce metric. NPS is cool because you can find lots of benchmarks
like npsbenchmarks.com which will tell you that Warby Parker is north of 80 which is
a huge achievement. So, delight your customers. Be like Warby
Parker. Four: Growth Sucks Cash – Find Cheap Capital
to Fuel It If you don’t have cash, you can’t grow. It’s as simple as that. What’s more, poor management of capital
at growth stage can prove fatal to a fledgling ecommerce store. Have you ever heard of “Cash Conversion
Cycle”? Verne Harnish defines it in the following
way: “Cash Conversion Cycle measures company-wide how long it takes between when
you spend a dollar (marketing, design, rent, wages, etc.) until you get that dollar back.” If you get a grip on this metric it’ll turn
out that you can make bigger investments without raising more cash. You can increase the amount of cash available
for investment by asking to be paid sooner, shortening product delivery cycle times and
renegotiate payment terms (so that you have as much time to pay your bills as possible)
and expanding your margin. Five: Build a Brand Successful online retailers invariably have
stellar brands. Chewy, Warby Parker, Casper, even good ol’
Amazon. It’s difficult to overstate the importance
of branding and, in many cases, it often trumps other major ecommerce goals. The guys at Warby Parker didn’t spend a
dime on advertising for the first three months Instead, they focused on generating positive
PR, telling their story, and creating a positive brand image. The upshot was a great deal of positive publicity
and appearances in major publications like GQ. Developing a brand is not an easy task. Developing a great one is even more daunting. However, there is a small shortcut. Try asking yourself “What successful offline
brands do I know do a poor job online?” Asking this question can be immensely useful
in pinpointing underserved online markets that are eager to connect with online brands
that embody the stories, values, and missions of offline retailers. Your job would be just to emulate a selected
brand in the online world: targeting the same demographic, with similar messaging and activities. Summing it up — 5 tips if you want to build
the next successful online business: One: Identify an Underserved Customer Segment
That Can Benefit From Better Product / Service Two: Create an Experimentation-focused Culture
Three: Over-Deliver on Customer Expectations Four: Growth Sucks Cash – Find Cheap Capital
to Fuel It Five: Build a Brand Follow this tips and you’ll build yet another
highly successful online store. Ok, folks, that’s all for today! Remember to subscribe to Bite-size Ecommerce
Optimization Channel. And don’t forget to like this video! Have a great day and see you in the next episode! Ta-ta!

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