E-commerce categories ripe with opportunity
I’ve been asked for advice a lot recently by people in non-traditional e-commerce industries about how they can create and sustain a robust online business for their company. When you’re in a truly unique segment of the commercial space, you may find that you have no market leaders in your exact space to look to for guidance on how to go to market.
At the same time, the opportunity to be the first in your field to capitalize on digital commerce is an especially juicy-looking piece of fruit. And it’s ripe for the taking in many cases. Rather than sticking your neck out and winging things, why not find your way by looking to companies that parallel yours in similar industries?
A lot of people buy clothing online these days, but the high rate of return can drain a company’s bottom line, especially since so many companies these days operate in a lean fashion. The key to e-commerce in this segment is in thoughtful and careful planning. You’ve got to accept and structure things so that you can send out a ton of product, with the understanding—and maybe even expectation—that a high percentage of it will probably come back.
The eyewear industry was struggling to go online as well when Warby Parker became one of the first companies to jump on the idea of sending out samples as the first step in the conversion process. Now they’re a monolith. Amazon Prime Wardrobe is becoming more common now, so the time is right for other apparel companies to take the plunge.
I had an experience recently buying a new truck from a traditional car dealership. It was fairly painful. The salesman was especially unhelpful and frustrating.
By contrast, colleagues of mine in California have bought new cars online, and the whole experience appears to be amazing. Shift.com is an example of this, and when they were used, a colleague had several cars brought to his house by one of their reps and was able to test drive each of them. The entire transaction was handled in-app & Shift.com even has a two-week return policy!
On top of this, the salesperson wasn’t even called a salesperson—they’re a “Concierge”. Shift says these reps are focused not on selling cars, but on making sure the customer’s experience of buying a car is the best it can be. This sort of system can seriously disrupt the auto dealership business model.
This approach actually takes a page from what the travel and vacation rental industries implemented years ago. In the past, if you wanted to travel somewhere, you would sit down with a travel agent, and they would handle the particulars for you, from your actual means of travel to your accommodations and sometimes even food.
These days, the industry has shifted to become more self-selective. Consumers can pre-shop while also having the option to talk to a concierge rep when they need to.
Businesses like Expedia and Airbnb have done this so well. They provide all the information and the infrastructure and remove the hurdles to consumers booking their own travel. The auto industry would be smart to look at their example when considering how to move their product in a digital space effectively.
With the legalization trend gaining steam, e-commerce for cannabis businesses will be a reality very soon. But the unique problems facing the cannabis industry when it comes to digital sales are truly unique. The most likely parallel, really, is alcohol.
Gary Vaynerchuk got his start working for his father’s store, Shopper’s Discount Liquors, in 1998. He renamed the store Wine Library and rolled out online sales. In five years, the store’s annual gross went from $3 million to $60 million.
He was one of the first people to digitize the sale of alcohol across state borders, and it was perhaps the foundation of all his future success. The cannabis industry would benefit greatly from studying what he and other early movers in the alcohol industry did.
What agencies did they partner with? What shipping carriers did they use? How did they protect themselves from product loss? How did they ensure they were compliant with all state and federal regulations? There will certainly be a lot of interesting moving parts to cannabis becoming a product that is sold online, but once someone figures it out, they stand to profit tremendously.
There are too many industries out there totally ignoring digital commerce right now because they think it’s just too hard. Nobody has done it before, and they can’t imagine how they could scale that mountain.
But it’s doable! And it’s necessary. Just look to the examples for some inspiration, and I promise no matter how niche your business is, you can find industries to learn from.
The article first appeared on linkedin.com on May 2, 2019