The Challenges and Strategies for Ecommerce Success

– Conversion in ecommerce is not a reusable asset and should not be the sole metric for judging success.
– Many companies in the ecommerce industry are facing challenges due to factors such as rising ad costs, shipping costs, and lack of brand recognition.
– The ability for upstart brands to rapidly grow and compete cost-effectively is diminishing, leading to potential opportunities for purchasing distressed assets in the market.Focus on customer obsession and building real assets in order to succeed in the competitive ecommerce market.A conversion in e-commerce is not a reusable asset. It’s a chase asset with a limited attention span and value. It’s actually the worst metric to judge the success of your business because there’s no one in e-commerce who can guarantee a second purchase. There is an article about DTC that’s making the rounds, and things don’t look good. Most companies that have gone public are facing massive uphill battles. The easy scapegoat, Apple iOS14, and Facebook rising ad costs, as well as rising shipping costs, were also mentioned, along with a lack of brand recognition. The real issue is the misallocation of capital with an eye on growth at all costs on a 1-to-1 basis. There is intense competition in markets with largely commoditized products, which invites a lot of entrants into the space. Incumbents in the space can outspend, out-innovate (for the most part), and wait out these financial missteps of upstart businesses. The ability for an upstart brand to rapidly grow to the point of being a nuisance cost-effectively is dwindling by the minute. The unit economics just aren’t a match. It’s pretty painful to watch. If you’re looking to purchase distressed assets, the next 6 months are about to be bountiful. I see massive growth among aggregators and some pivots within the venture studio space. They are all going to run into the same problem, though: top talent can stand on its own, so the best processes in the world without the proper proprietary tech stack and strategy will make it hard for them to compete long-term. So here’s what that means for the market more generally: those that can succeed will have less competition and get higher valuations, those that don’t adjust will be in a race to unload the asset that is the company as fast as possible. The model of only selling direct rarely works for brands in a world where marketplaces account for the majority of sales. But diversifying to selling on different channels requires rock-solid unit economics, some of which are a bit more shaky than they have been before. With rising costs across marketplaces to stay relevant, this play is going to eat margins pretty quickly. No, a membership isn’t the answer. No, loyalty isn’t the answer. A relentless focus on customer obsession is a decent start. If you’re in e-commerce, though, it’s an asset game, and the fact is most e-commerce and the fact is most ecommerce companies aren’t building real assets. It ain’t getting easier, adapt or die.#ecommerce #marketing #strategy

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