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5 Ways to Scale Your eCommerce Business

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Estimates report global eCommerce revenue will total $55.5 trillion USD in 2022. With an increase in digital activities combined with a mass shift in shopping habits (spurred in part by the 2020 onset of the Covid-19 pandemic), eCommerce is experiencing exponential growth. As it continues to boom globally, it’s important to understand how you can scale your business and build a growth strategy grounded in real-world evidence and proven tactics.

Read on to learn some of the most effective ways to scale your eCommerce business.

1) Add SKUs

One exciting method is to add SKUs (stock keeping units) to grow your catalog or store offering. In inventory management, a SKU is a distinct type of item for sale, already purchased, or tracked in inventory, such as a product or service, and all attributes associated with the item type that distinguish it from other types.

You can use SKUs in a number of ways to increase your sales and scale your business, such as adding new products, products similar to those you already sell, or bundling your existing items to offer your customers value and convenience.

New products

Fresh offerings keep your store relevant and can attract a wider audience. However, new product development can be costly and time-consuming, so you need to do your homework first and understand which products are most likely to sell well.

Begin by identifying a need. Talk to your customers and scope out what the competition is selling. Then, determine what sales volume you expect, calculate pricing, plan your marketing strategy, and make sure you’ve budgeted accordingly.

Similar products

Finding products similar to those you already sell is a safer foray into adding products than building from scratch. This could include selling different sizes of the same product or offering multiple brands in the same product category (e.g., sneakers by Adidas, Nike, and New Balance).

If you decide to sell products similar in nature to those in your catalog, it’s imperative to verify there are no clauses in your existing contracts that restrict this activity.

We recommend choosing your best-selling products and identifying similar items at both higher and lower price points to attract new customers across the spending spectrum.

Existing product bundles

A safe and easy way to add new SKUs to your inventory is to bundle two or more of your popular products for sale. You have a few options to do this:

You could create bundles of two or more of the same product. For example, sell two coffee mugs as a set or a six-pack of one-month-supply bottles of vitamins.

Offer a discount on these bundles to add value and convenience, especially since it cuts down on shipping costs while helping you move more inventory. This is also a great solution when you’re trying to move less popular items.

You could build bundles of complementary items (think shampoo and conditioner or a day and night cream combo). Again, you can offer a discount on this multiple-item bundle.

These complementary sets make it easy for customers to purchase everything they need for a particular use, plus save money on products and/or shipping. Best of all, they give you a new product to market and sell, which contributes to your business growth.

Read: How to craft your bundling strategy for DTC success

However you add SKUs to your product lineup, it’s a good practice to market them to your existing customers. We recommend a newsletter announcing your new product(s), retargeting advertising, or even early access for your subscribers and loyal customers.

2) Increase average order value

Arguably the most effective way to scale your business is to increase your average order value (AOV).

Growing AOV has multiple benefits: It increases the return on investment (ROI) spent attracting and converting new customers; it reduces the cost of fulfilling orders; and, ideally, it also earns you more bang for your buck when moving and shipping out those orders.

Below are our favorite ways to boost your eCommerce business’s AOV.

Offer free shipping over a certain threshold

How many times have you added a pair of socks, some lip balm, a measuring tape, or some other small item to bump your purchase total over the threshold for free shipping? Consumers (understandably) loathe paying for shipping. An $8 shipping fee is perceived as less tolerable than paying $15 for a new hat, so offering your customers free shipping over a payment threshold is an easy and effective way to boost average order value.

To ensure your free shipping offer doesn’t backfire, you’ll need to run the numbers to figure out what that threshold is for your business. A quick look at major retailers reveals this threshold can range from as low as $25 to as high as $200. That range also varies based on the products you sell and the requirements for their safe shipment.

Showcase similar or recommended products

Similar or recommended product widgets use upselling or cross-selling to increase AOV.

Upselling occurs when you convince a customer to purchase a more expensive option than the one they’re looking at or have added to their cart. A good example of this would be offering a larger (and thus more expensive) version of a product, like a 100-pack of pens over a pack of 50.

Cross-selling is when you offer a complementary product to your customer, such as suggesting a bag of coffee beans to go with their coffee machine.

When implemented correctly, both upselling and cross-selling increase average order value. In an upsell, the customer may only purchase one item, but it’s the more expensive one. With a cross-sell, the customer purchases the original product as well as complementary item(s) to make a larger order that costs more.

Provide coupon codes tied to spend thresholds

H&M does a great job of leveraging coupon codes with spend thresholds with their regular “X% off over $X” sales that often run for short periods of time. Offering a coupon code as an incentive to buy more can work in two ways:

  1. You can offer coupon codes for the present order to encourage customers to spend more in the moment. A recent H&M online sale, for example, looked like this: “- 10% off $80 order – 15% off $100 order – 20% off $150 order”
  2. You can also offer coupon codes to be used for a future sale, which has the added bonus of enticing customers to return to claim their prize. Old Navy, Gap, and Banana Republic are notorious for this with their Cash Coupons, which are used during future windows either online or in stores.

This approach sets a minimum spend requirement for customers to receive a coupon for future savings.

Give special deals for larger carts

“Buy two and get the third half off”

“BOGO 50% off”

“5 for $25”

We’ve all experienced the draw of these types of advertisements, haven’t we? Offering special deals encourages customers to add more items to their cart, which increases the number of items per sale as well as your AOV.

Read: 7 ways to boost average order value (AOV)

3) Extend your customer lifetime value

True or false: a one-time customer who spends $1,000 once is more valuable than a customer who spends $100 every six months for years.

If you said “true,” you’re missing out.

Attracting new customers is expensive and, if they only spend once and then leave, your ROI is shot. Rather than one-time big spenders, it’s more cost-effective to attract regular, loyal customers who may spend less per transaction, but keep coming back (although, let’s be real, we like big spenders too).

Keeping your customers coming back to buy again is the key to extending and increasing their lifetime value (LTV). Customers with a higher LTV equate to business growth.

Read: What is Customer Lifetime Value (CLV) and why is it so critical in eCommerce?

Create a newsletter

Communicating with your customers beyond their initial purchase is critical to building a relationship and breeding loyalty. A newsletter is a great channel for this.

Newsletters keep your customers informed about new product launches and market special sales events, and offer additional value by providing helpful tips and tricks for using your products and getting the most out of their purchases. They also keep you top-of-mind among your customers.

Read: 7 Keys of eCommerce email marketing

Prioritize customer service

If you want customers to return in the future, it’s important to give them a fantastic experience. To do this, prioritize customer service and their experience from beginning to end.

Start by creating clear marketing messages. Make sure your online store is easy to navigate, and eliminate any nasty surprises — like duty fees or shipping costs — by openly communicating all costs associated with your products. Keep your customers informed throughout the fulfillment and shipping processes with regular updates and expectations management. And, of course, thank them for their purchase.

If something goes off the rails, be sure to work with them on solutions. This demonstrates your stellar customer service, which endears your customers to you and fosters loyalty to your brand.

Retarget customers

Once a customer has visited your store, regardless of whether or not they buy, you should retarget them with an approach tailored to the customers’ past actions.

If a customer purchased a particular item, they don’t want to see ads for it repeatedly. Instead, your retargeting should focus on complementary items and new products. If a customer hasn’t purchased, retargeting with ads specific to the item(s) they viewed is appropriate.

Offer loyalty programs and deals

Keep your customers coming back by offering a loyalty program and special, “members only” deals. (These can be advertised in that newsletter we mentioned earlier!)

Loyalty programs can take on a number of forms: You can offer points like Sephora or a free product after every 10 purchases — whatever works best for your business. Running loyalty programs and special deals encourages customers to sign up and return so they can reap the rewards of being your customer.

Read: Customer loyalty programs: 8 Benefits you can provide to encourage repeat customers

4) Add sales channels

The more places you sell your products, the more opportunities you have to close deals.

eCommerce sales channels are the various platforms you use to sell your products. You may also have offline channels to expand your audience. When you add sales channels to your business, you increase your exposure (and the likelihood of making a sale), but choose your channel wisely.

Look for opportunities in other marketplaces

If you only sell on one platform, it might be time to expand to other sales channels and piggyback on common practices there.

For example, if you begin selling on Amazon, you can offer Prime perks like free same-day, one-day, or two-day shipping. When you remove shipping fees from the equation, customers might feel inspired to tack on an extra item or two.

If you do decide to sell on other marketplaces, consider setting up your own store. Again, Amazon offers sellers unique, customizable virtual storefronts, for example. This allows you to showcase multiple products in one place, and set up recommended items on your product listings to upsell and cross-sell to customers.

Bonus: Marketplaces like Amazon, Walmart, Etsy, and others already have loads of traffic each day. More customers means more sales opportunities.

Think outside the tab

If you operate a standalone eCommerce store, we know it can be hard to attract new customers and that marketing efforts can sometimes fall flat. That’s why it’s important to think outside of your domain when you’re ready to get serious about scaling your business.

Here are some of our favorite ways to see brands expand:

Pop-up shops

Pop-up shops at brick-and-mortar locations provide a unique opportunity to interact with customers and grow relationships in person. You could also launch pop-up shops online.

A pop-up shop is a low-commitment tactic that attracts customers with its novelty while creating a sense of urgency due to their “limited time only” opportunity to shop. Depending on your brand, target audiences, and location, you can leverage these shops in a number of ways.

Often, pop-up shops are the result of the relationship a brand has built with another company or brand. For example, your shoes can be sold at a local clothing boutique, or your fitness equipment could be showcased at a local fitness studio. As another avenue, you could consider setting up a kiosk during special events at local shopping facilities around the holidays.

The most important part of your pop-up shop plan? MARKETING. Create lots of hype and excitement in advance of your event to attract customers.

The greatest benefit of a pop-up shop is the experience it provides your customers. It might feel counterintuitive, but focus less on closing sales and more on building relationships.

Experiential shopping

Experiential shopping has become a popular eCommerce trend in recent years. It creates immersive, memorable experiences that engage the customer in new ways as they get to know your brand and products.

According to Forbes, experiential is the future of eCommerce. While experiential shopping may seem best-suited to in-person shopping, you can bring it online as well. You can use augmented reality (AR) for virtual try-ons, for example, or leverage influencer engagement (more on that later).

You can also implement experiential shopping in events such as the pop-up shops we discussed above. Just like those, the purpose of experiential shopping is to engage with your customers. Focus on their experience rather than their checkouts, and you’ll foster long-lasting relationships that yield repeated purchases and loyalty.

Social selling

As social media continues to grow, so, too, do the opportunities to sell on these channels.

Social media is an effective way to target new customers and retarget existing ones by providing a personalized shopping experience.

Once you’ve carefully selected your target audience (see below), you can use social media to present buying opportunities to those groups and individuals who are most likely to be interested in your goods. Since shoppers can buy directly through platforms like Meta’s Facebook and Instagram, you can create seamless experiences that make it easy for your customers to check out without needing to navigate away from their favorite social apps.

Social media also gives you the opportunity to engage with your customers, so break out your customer service hat and reach out to or respond to customers on your established channels.

Read: How to use social media for DTC success: Influencers, engagement, and customer support

Leverage influencers

Social media influencers are the holy grail of social media selling because they provide credible social proof to support your products. Taking it a step further, you can work with influencers to craft unique experiential shopping opportunities such as Instagram Live events where an influencer shares your products that customers can buy in real time.

When partnering with influencers, work with those who share your brand’s values, and establish key performance indicators (KPIs), brand messaging, and guidelines in advance to protect your and your influencers’ brands.

Read: Influencer marketing strategy: How to find the right partners for your brand

5) Increase advertising spend

Increasing advertising spend might seem like a quick fix to attract new customers and sell more. However, you need to monitor your advertising spend carefully to maximize its efficacy and help you realize the greatest return on investment.

Before you dial up the dollars spent, take the following steps.

Know when to spend more

Upping ad spend is close to a science. Some companies make the mistake of dialing up the spend in hopes of remedying their advertising woes, but the right solution is to spend strategically.

Increase your spend in the days and weeks leading up to major sales events (think Black Friday, Cyber Monday, Christmas, Valentine’s Day, Grading Day, Easter, etc.).

Consider slowly upping your ad spend and analyzing how that affects your business. A good benchmark is to increase spend once a week over the course of four to five weeks, then review your metrics. If you don’t see a rise in conversions and your AOV hasn’t budged, you need to look at other elements of your marketing strategy.

Refine your audiences

It’s useless to increase your ad spend if your ads are served to people who are unlikely to buy. To hit the right segments, hone in on your target audience and set parameters carefully. By making sure you target the right people with your ads, you can increase your ROI and optimize your ad spend.

Choose marketing channels wisely

While you carefully consider your audience, you should also look at where they spend their time and choose advertising channels accordingly. For example, if your biggest customer demographic is 60 and older, TikTok is generally not your best bet — but Facebook might be.

Keep in mind though, not everyone is a fan of social media. As such, search engine advertising and Google, Yahoo!, and Bing are great avenues for advertising.

Read: Facebook ads vs. Google AdWords: Which is better for your eCommerce brand?

Test and repeat

If you retain nothing else from this article, remember this: Always test your advertising. Every time you alter your ads, it’s important to test and monitor their success closely. By doing this, you’ll optimize your ad spend and strategy to reduce ad costs and improve efficacy.

Wrapping up — Start scaling your eCommerce business with tried-and-true strategies

Use these five time-tested strategies to grow your business and watch your revenue and sales volumes soar.

Whether you add more sales channels, expand your catalog, increase your LTV and AOV, or go all in on ads, follow the tips we list above to ensure a seamless growth experience.