Scaling your eCommerce (1)

You have been working on your online store for a while, seeing results, but you think you could get more out of it. You probably see yourself reflected in this scenario I just mentioned because ambition is as common as it is positive among entrepreneurs.

The thing is, we do not always know where to start. Considering that, we have written this article. You will find some proposals that you can implement right away, and as much as possible, we will try to keep your investment to a minimum.

Do not worry, this post is very based on specific examples, but it is interesting to make this minimal reflection to put into context what we want to achieve.

The big difference between these two concepts lies in the fact that growth can happen spontaneously. Often, this growth does not necessarily translate into profitability. How many companies have "died of success"?

However, scaling is strategically enhancing a business with the intention of reinforcing the current model and increasing its profitability. This can be done in diffferent ways:

And now, without further ado, let's see those tips to scale your eCommerce, and to make it a little more interesting, we will try to illustrate it with some examples that reinforce the ideas.

If we have a good product, with sufficient demand and a dominant position in the market, we are likely hitting a ceiling.

In this scenario, the best way to scale a business is to use that experience to "replicate" what we have done well with a new product, ideally related to the one that has led us to success.

An emblematic example is that of Ferrero Rocher. Although it is not strictly an eCommerce, it is worth mentioning. This company used to sell its classic chocolates, highly appreciated chocolates, during the winter season. This guaranteed the quality level of the brand, which led to them being removed from the shelves for the rest of the year.

However, by limiting themselves so much to seasonality, their sales dropped drastically for half of the year. How could they expand their business model? The answer was simple: by making chocolate ice cream. With this decision, they could better monetize their infrastructure and processes while expanding the offer to the target audience they already had captive.

Taking an example from the eCommerce world, let's look at Zappos. This company started by selling footwear and gradually made the leap to accessories and fashion in general. This strategy allowed them to diversify their catalog and attract the attention of more customers.

Another inspiring example of how a company can scale its business is the case of Tradeinn. They started as an online store specializing in scuba diving called Scubastore, which later transformed into Diveinn and began to generate profits after a difficult start.

From here, using a strategy similar to that of Zappos, Tradeinn began to create its own brands of clothing and specialized sports equipment for different sports, leveraging its experience and knowledge in the market.

Since eCommerce has been gaining prominence, many physical stores have been opening their reflection in the online channel, but the reverse path is also viable and can be quite profitable.

A physical store helps us a lot with local sales, capturing an offline audience. In addition to this, we can make use of the famous ROPO (Research Online, Purchase Offline) and showrooming (view the product in-store to buy online) to work in our favor since everything is part of the same ecosystem.

Additionally, adding a physical store allows us to expand our logistics capacity, using it as a pickup point or Click & Collect.

It is true that the method of expanding your eCommerce beyond the digital realm may require a significant investment in purchasing or renting premises, personnel, and other resources. However, there are also more economical alternatives, such as pop-up stores.

These temporary stores allow us to use this resource strategically, activating them when our strategy demands it.

A notable example of this strategy is that of Nordstrom and Bonobos, who have consolidated an omnichannel approach. Although they are not temporary stores per se, these eCommerce businesses have used the combination of both channels to address issues inherent to the fashion market. This market is one of the most lucrative, but it also has certain barriers to overcome.

Nordstrom, for example, has implemented services such as "Buy Online, Pick Up in Store" and "Reserve & Try in Store".

On the other hand, Bonobos started as a pure eCommerce and then opened "Guideshops" where customers can receive advice and try on clothes before making the purchase online.

These approaches have proven successful in bringing together the best of both worlds: the convenience of online shopping and the personalized experience in the physical store.