This page outlines how to create an ecommerce strategy for your online business, in easy-to-understand steps.
Why create an ecommerce business plan?
- Achieve a better understanding of your business;
- Identify new business opportunities;
- Identify new business threats;
- Set more realistic budgets and targets;
- Win budget & support inside your business.
What’s in an ecommerce business plan?
- Executive summary;
- Situational analysis;
- Statement of goals;
- Strategy statement;
- Description of tactics;
- P&L summary.
The planning process
When creating an ecommerce business plan, follow this simple process…
|1. Situation > 2. Goals > 3. Strategy > 4. Tactics > 5. P&L > 6. Summarise > 7. Measure & review|
Gather information. Review the internal and external factors affecting your business; this describes the world your business operates in. The better your understanding, the more relevant your strategy. Gather information with a view to summarising the important points. Below are some suggestions I’ve incorporated into the 7Ps of eMarketing.
- Your company’s competitors: list them and their competitive threats to your business;
- Customers: country, gender, type, visit reason (eg: info only, buy for a friend, retailer, wedding list…);
- New technology: eg: Magento 2, Artificial Intelligence, 5G;
- The Law: eg: GDPR, Distance selling regulations, cross border trading;
- Political situation: eg: potential new International trade deals, Change of Govt, Political certainty;
- Market trends: New business models & tactics (eg: Consolidated returns, White label marketplace stores, personalisation, localisation.);
- Society trends: eg: Leisure society, Environmentalism, Animal welfare, Fair trade, Corporate responsibility.
- People: Your team, other relevant staff;
- Organisational structure: Who does what in your web team? Who are the business decision makers?
- Finance: Cash flow, budget, current Website performance;
- Product/Services: What are you selling? (Sku volume, product types);
- Price: price ranges, AOV’s;
- Physical evidence: Stores, warehouses, offices?
- Partners: What entities are you partnering with?
- Place/Access: Website, Return-to-store, etc;
- Promotion: Social media, Google ads, affiliates, banner ads, email marketing, print ads, inserts;
- Process: How is the product/service provided to customers?
Conclude your situational analysis with a SWOT: a summary of your business’s Strengths, Weaknesses, Opportunities & Threats. The points in your SWOT must be addressed in your strategy. Examples….
Your goals may have been set for you, by directors or other factors. Now’s your chance to review, enrich them and ensure they are “SMART”.
All of your goals must be:
- Specific: Target a specific area for improvement;
- Measurable – Quantify an indicator of progress;
- Assignable: Specify who will do it;
- Realistic: State what results can realistically be achieved, with the available resources;
- Time-related: State when the targets will be achieved;
Example SMART goal: “In 12 months, we will grow French market revenue by 20%”.
Write a mission statement: You’ve already done most of the hard work. Summarise your goals and general strategic approach in a simple statement, which you can quickly and effectively communicate.
Example #1: “By leveraging opportunities created by the growth of overseas marketplaces, improved international courier services and our new East Asia warehousing; we will achieve 15% YoY revenue growth over 2 years and improve brand awareness by 10%.”
Example #2: “By upgrading to Magento 2 Cloud, launching 3 new international websites and dispatching orders from our North American warehouse, we will grow revenue by 15% over two years.
Your strategy describes the broad approach you will take, tactics describe the actions you will undertake to achieve the strategy.
By including annual performance targets and costs for each tactic, your list will help you determine your plan’s budget and performance targets, which you’ll define in the “P&L” section.
Tactical plans can be determined in many different ways. I like to organise my list of tactics into Acquisition, Conversion & Retention (ACR). ACR addresses how a plan will attract visitors, convert them into customers and encourage them to buy again.
How you will attract potential new customers? Examples…
- Banner ads
- Print ads
- Affiliate marketing
- Rented lists
- Social media
- Partner marketing
- Blog content
How will you convert visitors into customers? Examples…
- Personalised product recommendations
- Site redesign
- Improved site usability
- Selective discounting
- Free P&P
- Free returns
- Localised content
- Technical optimisation
- Telephone support
How will you keep customers coming back? Examples…
- Re-targeting emails
- Customer loyalty discounting
- CRM strategy
- After care
- Retargeting ads
- Blog content
- Social media
Summary description and KPIs for your tactics
Along with a summary description and details of any suppliers you plan to use, it’s essential to set performance targets. Ask suppliers to help set realistic targets for each KPI they have responsibility for, this encourages them to buy in to the success of the business.
Here’s are some example of tactic summaries – you’ll need to create something like this for each tactic.
Brand and Generic search term campaigns will be created by our Paid Search consultant.
We’ll target different countries with native language ads: Germany, France, UK, USA, Canada. USA is our biggest market; budget will be assigned to reflect this with regular weekly reviews to reassess the spend.
NB: This summary lumps all regions together, your KPI tracking should breakdown to country and campaign level.
Here’s an example of a Conversion tactic summary and it’s KPIs.
|New personalisation widget
The Acme widget allows us to personalise automated recommended product displays to better suit customer requirements. We expect this to increase the average customer conversion and decrease bounce rates.
|Yr1 site visitors||15,000,000||Conv rate +/-||+0.4%||AOV +/-||+0.5%|
|Budget||€5,000||Additional rev||+£50,000||Av COS||10%|
A profit and loss projection sets KPI targets for your tactics and defines the financial viability of your business plan for the next 12, 24 or 36 months. These targets will help detect any issues inside your online business.
Create a P&L table
Take the Cost and Revenue target information that you calculated for each tactic, in the Tactics section. Organise your figures into 1 year time frames, these can be subdivided into 12 month and 52 week sub-targets.
Tip: Every business has different definitions of terms like “margin”, “budget” and “profit”; each business will also has its own P&L table template; this is a very simple example of some crucial elements.
|Marketing tactics||Budget||Revenue||Av’ COS||Gross margin|
|Total cost: -€…||Revenue: €…||Gross margin: €…|
You’ve gathered a lot of information, now reduce it into a format that’s more accessible to stakeholders.
You should be able to reduce and summarise your entire strategy into a single side of A4, at a readable font size.
Recommendation: reduce the strategy to 14 slides.
Alternatively, if the focus of the presentation is to get budget approved, you should use the “10/20/30 Pitch deck rule”. The presentation cannot have more than 10 slides, must not take longer than 20 minutes and must not exceed 30 bullet points.
Use the KPIs in the tactics tables and the P&L statement to measure the success of your plan over time. You can use my ecommerce weekly report template or create your own.
A weekly report
Maintaining a weekly report encourages you to look for problems, find new opportunities and provides an opportunity to communicate the success of your plan to key stakeholders on a regular basis.
|Actual Visitors||Target Visitors||Var +/-||Actual Conv rate||Target Conv rate||Var +/-||Actual orders||Target orders||Var +/-||Actual Rev||Target Rev||Var +/-||Actual Cost||Target Cost||Var +/-|