Marketing strategy of an online store as an effective business plan

Service Business

Have you ever wondered how to start an online store? Nowadays it is simple and cheap - all you need is your own domain, buying space on the server and choosing one of the many systems for running an e-shop. Automating e-commerce programs allows you to easily manage sales, inventory or customer contacts; there are many systems on the market for running online stores, e.g. free pasejo. From the technical side, setting up an online store is easy. First of all, we should focus on introducing products to the store (photos, descriptions and prices), determining the costs and shipping details and developing the store's regulations. However, it is more difficult to come up with a good business idea and develop a strategy for it. A good online store marketing strategy should be based on a solid business plan.It is worth thinking about it before we set up an online store, because it is supposed to earn, rights? So you need to carefully evaluate the planned profitability of the store, think over the type of assortment, pricing policy and many other components of the business plan. Let's take a closer look at them.

Marketing strategy of an online store - a business plan and its components

  1. Offer

A professional online store marketing strategy should be based on a thoroughly developed business plan. First you need to ask yourself a few questions and find realistic answers to them. The primary task is to develop a selection of products that the online store is going to sell. If your e-commerce business is going to offer services as well, these should also be well planned.

Your offer must be competitive, not necessarily in terms of price - it may be distinguished by quality, level of service or speed of implementation. It should also stand out with something that others do not offer. The so-called niches that fill a gap in the market propose something unique. Think about how your store could be better than the competition. Developing an interesting offer is half the success of a business plan.

  1. Competition analysis

The marketing strategy of an online store should start with checking the activities of the competing companies' offer. Know what your competitors are doing and plan how you will react to them. Think about the advantage of your offer over that of the competition. In what aspect can it be better than what is already on the market? Is your idea easily copied by competitors? Do you offer anything innovative? If you duplicate someone else's ideas, what can you do to break into the market with them?

  1. Market analysis

Get knowledge about your industry. Is this market developing and the demand for the service or product is growing? Is it subject to change? What are they dependent on? Is it a seasonal industry? Are you going to operate on a local, regional, national or international scale? What are the costs of entering the market in this connection? What barriers will you have to overcome? And another very important question: what is your target group, i.e. who is your potential customer? What needs does your offer meet? Think how many leads you plan to have. What expectations and shopping habits do your customers have? Try to answer these questions truthfully and reliably.

  1. Sale and promotion

You know the market, competitors, customers and your offer. Now it's time to answer the most important question: how to sell it? If you focus on e-commerce, you have to choose whether you want to run a stationary store at the same time. Combining the two activities is more difficult and generates more overhead costs, but it can increase trust in the business and serve as an option for picking up products in person. Choosing an online store option is cheaper and can be a good proposition, especially for those starting their business adventure with e-commerce. Make your sales path as simple as possible for the customer. Make it easier for him to make purchases through the option of quick payment by providing PayPal, PayU or DotPay systems. Develop quick and convenient forms of product delivery for customers. Remember about the store regulations and the possibility of returning goods, as well as guarantees and complaints. In online sales (qualified as mail order), the customer has the right to return the goods within 14 days of purchase. The developed marketing strategy of the online store can significantly facilitate the work on its development.

  1. price

Pricing policy is one of the most important components of a business plan. It determines not only the profitability of your e-commerce store, but also, for example, the target group - the profile of a customer buying cheap creams will be different, from a customer looking for exclusive and expensive products. When you choose an assortment for your store, you should analyze the prices of the same or similar products offered by the competition. The cost of selling your products does not have to be the lowest. Remember that by going to war and lowering the financial value of the offer, you can finish your own business faster than your competition! So calculate the prices so that your margin allows you to earn. Of course, it can be set at different levels for different parts of the offer. This is where the next component of the business plan comes in handy.

  1. selling prediction

If you already have assumptions about the number of leads, work out your planned sales. Think about which elements of your offer will sell in the greatest quantities, and what will be just an addition? Plan daily, monthly and annual sales and adjust the pricing policy accordingly. Remember about seasonality. Think about the dates of the online store promotion and sale dates. If you've already done so, go to step seven.

  1. Revenue

If you already have a sales forecast and have compiled the prices, you can calculate the planned revenues and revenues from the online store. Remember that income is sales revenue minus costs. So you need to calculate everything well: from fees for the store domain (internet address) and server, possibly also for software (e-store system), through outlays for the purchase of goods, store operation (introducing products, customer service, packaging and shipping), to expenses for the warehouse, courier company, accounting, owner's ZUS contributions and taxes as well as employee salaries. If you already have a revenue and revenue forecast for your e-commerce business, you can calculate the net profit and profitability of your business.

Profitability can be defined in two ways: as ROS (return on sales) or as ROI (return on investment). Of course, the higher the profitability, the better. You calculate the ROS by dividing the net profit by the sales revenue multiplied by 100%. For example: if the net profit is PLN 10,000, and the revenues (net sales), i.e. after deducting costs, our sales are PLN 20,000, the ROS ratio will be 50%. The marketing strategy of an online store is most often measured in terms of profitability - with the ROI indicator. It is the difference between the amount of expenditure on an internet campaign (i.e. its cost) and the amount of profit from the campaign (internet promotion), then divided by the costs of the campaign and multiplied by 100%. So if we gained 1500, the campaign costs amounted to 1000, the equation looks like this: (1500 - 1000): 1000 = 1 * 100 = 50 (%) This means a fairly high 50% ROI profitability: each zloty spent returned as 1.5 zlotys! By calculating your ROI, you know how much you will earn by spending on an online store's promotional campaign. The online store's marketing strategy should be based on the ROI as it best reflects its effectiveness.

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Marketing strategy of the online store

  1. Objective

Depending on whether the online store has been around for some time or is just starting on the web, the online store's marketing strategy must take into account various goals, e.g. brand promotion or sales goals. If you focus on increasing sales, which products from the offer will it apply to?

  1. Campaign target audience

You precisely define potential customers for the chosen goal and product group. For example, when it comes to face creams for women 30+, the target group will be women aged 30-40. Its more detailed characteristics will allow us to select the appropriate places for the promotional campaign, which is determined by the marketing strategy of the online store.

  1. The territorial and time scope of the campaign

The Internet also makes it possible to conduct campaigns in the territory of a given country, region or city. It's worth taking advantage of. The duration of the online store promotional campaign should be adjusted to the seasonality of sales and the needs of our store. For example, if you have a disturbingly large amount of facial creams for women 30+ in stock, you need to increase your sales so that they do not exceed the use-by date. The time of conducting advertising activities is also limited by the advertising budget.

  1. Campaign budget

Based on the cost of the campaign and the assumed ROI (e.g. calculated on the basis of previous campaigns of this type), you can define the promotion budget of an online store on the web. Sometimes, with a limited budget, it is worth planning a short, but intense campaign and choosing the right places and forms of advertising.

  1. Selection of marketing tools

Actually, it is a key part of the campaign, because good planning of the forms and places of its conduct is a guarantee of success. Depending on the industry of the online store, you need to consider the advantages and disadvantages of various forms of online marketing - SEO activities, social media promotion, the use of blogs, the use of e-mail marketing, ads on auction sites, the use of sponsored links (AdWords campaigns, AdSense retargeting campaigns) and display campaigns (advertisements such as banners, billboards, pop-up windows, etc.). The choice of the right tool depends on the purpose of the campaign, the target group of the product, its scope and duration, but most of all on the company's capabilities (mainly budget) and promotional needs.
The planned marketing strategy of the online store will be different with long-term activities promoting sales and brand awareness, differently with a short sale campaign. When planning marketing campaigns in an online store, you choose the means to achieve the goal, not the other way around.

  1. Marketing strategy of an online store - analysis of conducted campaigns and optimization

Each completed online marketing campaign should be carefully counted and analyzed. This is what marketing indicators such as CTR or ROI are used for, as well as detailed statistics available e.g. in Google Analitycs. These indicators are intended to answer important questions - whether the assumed goals of the campaign have been achieved. Is the chosen online store marketing strategy effective? If the answers are "no", you must make changes. Optimizing the marketing strategy of an e-shop means adjusting it to the realities. If your assumptions aren't working out for you, think about what needs to be improved, what needs to be changed, and what not at all. Re-examine your business plan and marketing plan and see what's missing. Where are the bugs? Or maybe you forgot something? Do you encourage customers to leave feedback on the purchased item? Do you care about after-sale customer service? Do you thank him for his purchases, do you remind him of the next ones? Did you define your target group correctly? Do you plan your promotional campaign budgets well? Remember, if you want to earn money on your e-store, the developed marketing strategy of the online store is your most important task for its owner.