Sub-Saharan Africa are yet to trust online businesses with huge transactions has slowed down the adoption of ecommerce .
Fulfillment and Logistics
Ecommerce has multi-layered logistics that require visibility of the entire supply chain in order to navigate the fulfillment process . It is very expensive to set up a seamless fulfillment experience that will enable tracking of inventory , customer order tracking and timely last mile delivery .
An efficient fulfillment experience will attract “ added cost and rates ” that has to be paid by the customer making the total order value more expensive . Practicing a cost transparency policy makes it very hard to optimize conversions since pricing is a key consideration in conversion rate optimization .
The multiple fulfillment touchpoints including warehousing , hauling and repacking , fulfillment centers and last mile delivery logistics is an investment that can be covered by either high value goods or large volume sales .
Building a model that allows the business to generate revenue from the different ecommerce value chain touchpoints or introducing complementing services can lead to financial health of an ecommerce start up . Last mile delivery in Africa remains a challenge since most households and roads are not numbered making it difficult to map out a delivery route .
“ Imported ” Venture Capital business Models
While it is important to appreciate the investment , role played by venture capitalists , it is also necessary to interrogate the different templates they present from other markets where the business model has worked . Markets have different structures , consumer shopping habits and adoption diffusion curve . Most of the business templates should be localized and customized for the local market to enhance connection with the target audience .
Most investors are obsessed with instant success and will focus on aggressive user acquisition and growth which in most cases is a blindfold to other valuable business processes . The scaling models make Startups overspend in different phases of the business leading to unrealistic view of associated costs that become unbearable in the long run .
Phygital Shopping Experience
Retailers all over the world are adopting a phygital shopping experience that combines online shopping elements with brick – andmortar . Businesses that adopt omnichannel strategy are able to collect more data by interacting with multiple online customer touchpoints and in-store interactions .
The changing consumer shopping patterns call for customer centric leadership that understands the shopper journey maps at granular level and identifies phygital touchpoints to creates hyper-personalized customer experience .
Ecommerce Start-ups should be ready to serve customers at their convenience by integrating online retail stores with brickand-mortar stores .
E-retail Platform Agility
Different generations of consumers have exhibited varying technology preferences throughout their shopping journeys . There is a shifting from legacy web shopping platforms to instant messenger platforms and social commerce channels due to their accessibility and versatility . Integration of secure remote commerce / click to pay can lead to higher conversation rates .
Ecommerce start-ups should study consumer technology preference and stay agile enough to rollout new platform features in order to stay connected with different customer segments and offer
optimized customer experience through their convenient platform features .
Focus on right success measures through unit economics
There are numerous ecommerce metrics that can be tracked , analyzed and interpreted to generate valuable business insights . The process of tracking ecommerce metrics can be overwhelming due to the magnitude of data and glamorous vanity metrics involved . There are several priority measures that can gauge and track the success of ecommerce business .
Keep your eyes on Total Merchandise Volume , Average Order Value , Customer Purchase Frequency , Customer Acquisition Cost , Customer Lifetime Value , Fulfillment Cost Per Order , Conversion rate etc .
Make sure to maintain the Life Time Value ( LVT ) ratio to Customer Acquisition Cost ( CAC ) between 3 and 5 . Less than three means your CAC is high and your business may not be sustainable in the near future while above 5 indicates a need to increase user acquisition efforts .
Martin Muli is an eCommerce and Digital Marketing Trainer and Consultant . You can commune with him on this or related matters via email at : Martin @ eyeballs-marketing . com .