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eCommerce-about Making Money

eCommerce is all about making money – Part 2


By Curtis Johnson, Mananging Director – Salmon Asia Pacific


Part 2 – eCommerce money making site

eCommerce (or Online Retail) is all about ‘making money’, first and foremost. If you do not want to do this, then do not invest in these strategies. If you do want to, then keep reading.

Part one of this three part article introduced you to the notion of the EIS Factor, however it was the writers intention not to go into detail about the External channels or Internet capabilities to get customers to your site (except for a brief description to create awareness that these items are required also, to be successful in Online Retail), there are many agencies specialising in these fields which will guide and assist the needs of Online Retail marketing, and many more informative articles to read.

However it is the ‘Site’ factor which is the main topic of discussion and which will get the investment returning. Once we get customers to the site, how do you keep them there?


This can be a contentious question, as you may have thousands of visitors to your site staying for long periods of time, which may fulfil the question however if the conversion rate of buying is zero or low then you do not have eCommerce in mind. Therefore the question which will be answered in this article is:

‘…What are the essential components of an Online Retail site solution which will assist you to keep a customer on you site longer, returning more regularly and most importantly buying more a.k.a. making you money…?

It is not really a secret, you need to manage and use information about Products, Customers and Orders. However it is how you use this information which is the all important aspect, unfortunately it is not a simple as placing an image of a product with a price onto your webpage and allow your customer to purchase through a basket, you may get a few sales, but you will not make any real impact on what you can achieve with Online Retail. You must be able to target and segment products for your customers personal likes, while keeping the site fresh and offers to your customers changing – just like your store, you wouldn’t keep stock in store for long periods. Just as your stores change so to does your online store need to change.


Product (& Service)

We are in the information age, people love knowing about what ‘things’ are, same to when it comes to products. When online, this is even more important, as there are no sales personnel for a customer to ask questions, so it is important that you provide rich information online, not just about who your company is but also about every product (& service) – regardless of how small.

Nothing is better than images and the more per product the better, the capability to display many views of the item allows a customer to interact with the product so a customer can see the front, back, side, top etc. this increases a customer’s interest. At the minimum having ability to view the image in different colours (changing as selected) and zoomingin on the item is a plus. Where it is a service on offer, the same applies, just a different aspect.

You should describe all characteristics of the product (look, feel, use, material/s, and component/s), the more information a customer has on the item, the better informed and more confident they feel it is a quality product. Of course if it comes in more than one size or colour, referred to as skus, these also should be selectable, however for a size component, the ability for a customer to see what the size means – in the form of a size chart – again allows them to increase confidence, as it will assist in a more informed decision of the purchase. All this type of information also assists in Search Engine Optimisation (SEO), which the ‘Internet’ aspect of the EIS Factor will require.

Inventory for products is a sensitive part of an online offering, as fast as a product is placed online it can be sold out, or the sku changed, or have more stock added, these activities happen in real time. The system must be able to handle the product inventory updates constantly, if not there may be conflicts through the fulfilment processes later, and nothing stops a customer returning to a site faster than them buying something online, only to be told at a later date it is not available. The ability to backorder or future order an item also gives good appeal to the customer, as it can make them feel they are getting something before others.

Just as important as Inventory control is having the ability to manage the price of the Product. Prices change, anyone in retail will know this; they change for all kinds of reasons; sales, markdown, specials, deals, seasons, promotions etc. What ever the reason, the ability to change the price of your products will be paramount for your Online Retail system. This allows a customer to see change on products and that coming back to check out sale prices and such is a must.

With all the above functionality and information, a capability proving highly beneficial is a customer purchasing due to peer reviews of the product, this can be done by allowing a customer to share the item on their social networking site (Twitter, Facebook, MySpace etc), usually through links on the site. Although be careful that a balance is made, as this has the ability to take people away from your site, another component or an alternative is allowing a customer to Comment, Rate and Review the product, which they have purchased previously directly on the site, this allows other customers to read their peers’ comments along side product descriptions and keeps them on the site. This also gives you a great way of researching what your customers think of your products and change the items online to reflect the more favoured ones, or place greater discounts on the more unfavoured ones.

When the customer has found a product they like (and hopefully placed it in their ‘bag’/’basket’), a way of getting your customers to add more items to their order is providing them with associated products, which would compliment the item they are about to purchase, for example a belt for the jeans, or mouse for the laptop. This is referred to as cross selling or product association (which can also be labelled as ‘Recommendations’) and gives you the ability to market other items of like to a customer to also buy. Any Online Retail system should have the ability to update associations frequently as they change, or are sold out etc

One of the most important factors when dealing with Products online is having the ability for a customer to find what they are looking for. The site must be able to allow a customer to search directly on keywords or browse through your catalogues, and even filter on attribute to match their needs, such as browsing computers and filtering on brand, colour and price, or the ability to filter on style, look or cut of an apparel item. This is referred to as Guided selling and gives the customer the ability to locate items fast. Forcing a customer to view the products you want them to view without the flexibility of browsing, can prove costly, as they will leave because they cannot find what they want or worst, will go elsewhere to discover other sites where they do have the freedom to roam.

Product promotions are a large benefit of getting customers to return to your site, these are different to specific sales or markdowns of a product. Promotions allow a product to be sold at a ‘special’ price based upon a qualifying factor, such as buy 3 for the price of 2, free gift with an item, percent of first order etc. Promotions create excitement and anticipation as to ‘what the next one will be’, therefore bringing customers back to your site. Some promotions can also cause a customer buying more than they normally would, as they get a sense of saving money therefore getting more.

Older Online Retail solutions allowed a customer to only enter a promotion code at time of purchase in order to qualify for a promotion, which are still in use today, mainly for promotions where a quick buzz is needed where the codes are spread throughout social sites to cause a viral spread or frenzied buying. Systems now have smarts which can automatically qualify without the need for codes, which can be based on a product, customer and order, they are very powerful and used in conjunction with each other can seem like a customer is getting something different each time they come to the site, while all the time making you more money.

Promotions associated with customer segmentation and orders will be further discussed in this article below.



Knowing your customer is important for any business, and in Online Retail it gives you the ability to automatically target, where there are no personnel around to ask specific questions to your customers.

Security or Privacy of information is still a sticking point for many retailers and customers. There has been and still is a mountain of investment spent on technology and is today very safe, it can even be said that with all the encryption of information, tokenisation and technical security measures, customer information and privacy is safer with online systems than, in some circumstances, in stores where staff can obtain the details easily, or ATMs where criminals are tampering with the machines. That said, security is important and should not be thought of any less because of the technology available, an Online Retail system must comply will all standards and policies, when it comes to your customers, their confidence that their information, identity and finances are safe, will bring them back to your site to continuously buy. So make sure the security/privacy message is clear on your site.

Online Retail is no longer about presenting a few products online and expecting your customers to buy them, ‘just because they are there’, it takes a little bit more than that and always has. Customers expect you to not only provide a wide range of products online, but also they expect you to know who they are and what they want. This is where segmentation, or personalisation, comes into play. Todays sites must cater specifically ‘for’ your customer, so your system will need to have this capability from the start.

The more you know about your customer the better you can target or promote to them. The basic items of segmentation are; Registration, Order History, Gender, Age, Address, as these can be gathered through registration and/or through the Order process. Registration is a must for any online retail system, it gives you the benefits of managing and co-ordinating your segmentations, however, there are still people who do not want to have any registrations – for what ever reasons – do not segregate these people by forcing them to register to your site to buy, otherwise you are throwing away money, they are just another segmentation to target.

In order to be confident you know who the customer is when they come to the site, relies on registration, as it is all about what they tell you and is based on building your database with the information you can use, it must be a hard known fact which is consistent, unlike using cookies to target a customer, where a customer could delete cookies or use a different computer, you cannot be confident of who the user is, and whether they have been to your site or not previously.

As soon as you know anything about a customer, you can start to target using promotions, specials, sales etc. directly to your known customers, the first one to set up is Registered Customer segmentation, where you can target a promotion to customers when they register or log in.

Start off slow with the basic items of segmentation mentioned above, as you will need a process to manage the variations, and to look at all the different types of targeting possibilities can be overwhelming and can lead to placing targeting into the too hard basket. It doesn’t need to be, just plan and grow, introduce a new target or segment each week or fortnight, and within a few months, your customers will be see different items each time they log in.



Orders are pretty straight forward, the Online Retail system should be able to support storing orders associated with a customer, and have the ability for a customer to add/store more than one delivery address in the system, as they may be purchasing the items as a gift for a friend or relative. A great functionality of an Online Retail site is the ability for a customer to track their Order; this allows them to feel confident they will get their delivery. Basic tracking using a third party’s URL and Consignment number of the delivery is fairly straight forward and can be integrated into most available Online Retail systems quickly.

The Online Retail system must be able to manage orders, which allows you to know when the order was placed, how much the order is, broken up by bought items, quantity of products, total of taxes, and amount of discount (from sales, promotions, deals etc) for each order divided by the items. This is important to be able to manage this end to end, to be able to inform customers of the status if they made an enquiry. Which leads to having the ability to modify, cancel or return orders, which all online retail businesses have to manage, it makes the process streamlined if it is all within the Online Retail system.

Payment gateways are mentioned now, as they tie in directly to ordering through Online Retail sites. Payment Gateway’s are a plenty, and span quite a few functionalities. The base of payment gateways are the ability to accept Credit/Debit Cards, make sure your system integrates these payment gateways, as it gives your customers added confidence the site is a quality site and not a hub for dodgy merchants, for example, there is nothing which turns a customer away faster than having a site which opens up an entirely different webpage and that looks nothing like the Online Retail site, to enter their payment details into.

This goes with other types of payment, such as PayPal or Google Checkout, these can also be integrated into your systems to streamline the process, and not have them ‘point’ to another site, these integrations will also keep the customer on your site. Advanced payment gateways now give an extra level of security in the form of 3D Secure, which is a form of security gaining wider use in Australia, where a password is needed which is linked directly to your bank/card. Another security option is to store payment details off-site; these are handy if you do not have the PCI compliant security policies in place in house or at your hoster.

Again, be sure the system, infrastructure and hoster conform to all security and privacy standards.

Order promotions including shipping promotions (free shipping etc), are a great way to offer promotions which cover a whole order (25% off first order, $20 dollars off orders over $200 etc), not just individual products, which may or may not be used in conjunction with product promotions. The system must be able to qualify an Order based one either the products in the order, the customer placing the order or the total amount of the order, these combinations add up to give the customer variations to qualify against, and encourages adding more items to the current order or returning to save more in the future, and not to mention word of mouth. Remember, always promote.



It is important for the concepts of Product Promotion, Customer Segmentation (targeting) or Order Promotions for customers to know what they are, and when they are, therefore the majority of ‘content’ on the site, must be broadcasting this to the customer, and not just on the homepage, when a customer is browsing through catalogues or viewing their order, banners should be telling the customer exactly how they can qualify for the next promotion and each time the customer qualifies, then the next item is presented to them, therefore a customer not only qualifies for one thing then buys, you have them, give them more and more, and they will add more and more.

The most important aspect of the Online Retail system, is that it is Dynamic and changes as the customers fulfil the need of the promotion.

The notion of content for an Online Retail system, is mainly in regards to supporting the promotions (creating graphic which inform the customers of promotions etc) or static pages (about us, contact us, FAQs etc). anything more than that is what is called a value add for the customer, however caution must be had not to go overboard with sporadic content not related to selling a product or service, as it will distract a customer, especially if it causes the customer to go off your site.

Remember, the first article discussed External and Internet marketing. These should always be ever present in one way or another to promote and assist getting people to your site to qualify for the promotions.

The main aspect of any Online Retail homepage should be Product, or Promotion of Products, and not concentrated or center around Social Aspects. Social aspects are links to social networking sites (these should be used to bring people to your site), blogs, competitions and events. That is not to say you shouldn’t, but you will need to get a balance between buying and giving. The giving does bring benefit, however too much and your sales will suffer. That said, having good social content will entice customers to come back to your site to see what is new, just try to link it back to products and buying (discreetly). If they must be on the site, put them down the page, or have the visitor register to view these items, i.e. create a segment which only displays this type of content once the customer qualifies, it’s the same principle as promotions, this gives them an additional reward for being a member of the site, and keeps them coming back and logging in to see it, which gives you the opportunity to discover who they are and target a great promotion for them.

Integrating the information from the Online Retail system to other informational systems in your business (e.g. Customer Relationship Management, Finance, Warehouse) can be as little as an export file or as big as real time transactional connections. This is a system design based upon your current IT policies, and size of your organisation, and will not directly affect the Online Retail system.

What are the type of costs that will be associated with building, operating and managing the EIS Factor for Online Retail?


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Go to Part 1 >> – eCommerce is about making money


Go to Part 3  >> – You need to spend money to make money

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