IDEAS SHOPPE

Early stage E commerce companies cannot ignore brand building communications

Over $750 million has been invested in the e-commerce sector by PE and VC funds over the last five-six years as investors attempted to ride a predicted boom in the online marketplace. E-commerce transactions touched Rs 8,146 crore in 2007, more than doubled to Rs 19,688 crore in 2009, and crossed Rs 45,000 crore in 2011, according to estimates by the Internet and the Mobile Association of India (Iamai). The value of transactions is expected to touch at least $70 billion by 2024-25 and could even rise to $260 billion if all factors remain conducive to growth, the association said.

Yet, despite the buzz around online retailing in India, the country does not feature even among the top 30 markets for online retail investment, according to consulting firm AT Kearney's Global Retail E-commerce Index. Significantly low Internet penetration and poor financial and logistical infrastructure are major roadblocks to India's entry into the index. Funding is increasingly becoming a challenge with funds starting to prefer the safe bets - i.e. the more visible who paradoxically are burning huge amounts of cash to attract customers to their portals

While smart promotions and discounts are one way to beat the clutter, it doesn't help build loyalty. What is being noticed now is a price war in some E com categories and discount mavericks rule to roost in fits and starts. Clearly high cost of mainstream advertising, wafer thin margins, the elusive volumes can stretch entrepreneurs badly. Lessons can be learnt from the experiments with such predatory pricing and promotional methods, from cash rich industries like telecom and aviation. In the latter, the upsurge of fairs have started happening while in telecom the 1 paisa tariffs are now being reconsidered! But one thing that differentiates these 2 sectors with ecommerce is on-ground hardware and some strong efforts at brand building by promoters with reasonably deep pockets

So where does that leave the early stage ecommerce firms? Eventually the questions we must ask is, are there ways to deal with the brand building challenge especially at the early stages... smartly and cost effectively? There cannot be a zero budget marketing plan but certainly a communications program that can run at ¾ the cost of mainstream publicity channels…but it must be integrated to your marketing objectives...

7 tools you must adopt

  • Develop a smart PR program to tell your story creatively and constantly- Have an efficient PR program in place. Set aside some budgets for cost effective media deals besides earned media spaces
  • Spend some money in a great creative worksomething that truly shakes up the online space where your campaign will play the most. Creative work that associates with day to day lives could be useful (e.g. Amul ) or a powerful brand icon like the Zozos. Here I am NOT talking about advertising campaigns but simply great creatives that can embellish your digital media campaigns
  • Use associations with large reputed partners and vendors to build credibility. Include images or logos of recognized third-party companies on your e Commerce pages. These go a long way in giving potential customers a sense of security. An example is PayPal which gives visitors confidence to share personal details and purchase online
  • Have a high intensity social media campaign in place. You must be present at all the places where your customers are
  • Blog:Creating a blog that runs like a mini magazine can be a power tool. It is not necessary to get celebrities to associate but getting reputed authors in this space to run this property for you could be a sustainable cost efficient solution
  • Build credibility by encouraging reviews. Don't be afraid of bad ones. Listen, trawl and manage the reviews. One way to deal with bad reviews is to take the customer offline in real time and deal with his concerns. Get him to post a positive comment
  • Think of ways to Enhance Customer experience:You may choose to use soft tools like a virtual shop assistant to answer any question. Although your product description should give as much detail as possible, it does no harm to have a virtual shop assistant to answer any questions a prospect may have about your product. Even though consumers are buying online more often than before, there is still some reluctance to click the buy button.