It’s expected that the global eCommerce market will grow from $3.5 trillion in 2019 to reach a massive $5 trillion by 2021. Since a rising tide raises all ships, the eCommerce services business will attract lots of new solution providers to support merchants with innovations to fuel this growth.
Today, there are already 75,000 solution providers in the space in the U.S. alone. And even if you specialize in one eCommerce platform, there’s still a lot of competition for services — Magento alone lists over 190 solution partners on their partner page.
So within this competitive market, how can you set yourself apart? Here are four considerations to help you differentiate your eCommerce services business:
- Deliver insights, not data
- Productize services to scale opportunities across more merchants
- Define your target market and specialize
- Offer alternatives to the status quo: advanced experience optimization testing
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1. Deliver insights, not data
eCommerce is an industry that thrives on data. However, vast quantities of data can be overwhelming and merchants can drown in their own data lake. Solution providers that can build a life-raft filled with insights, not data, will differentiate themselves and provide true value to their clients.
Going back to basics, data is the raw numbers that we capture, information is data presented in a way that we can understand something, and insight is gained by analyzing data and information to inform decisions about a particular situation or phenomena.
Data is the raw numbers we capture
Information helps us understand
Insights help to inform a decision
To draw an analogy, you can’t learn a language by memorizing the dictionary. Words (data) alone are not enough — you need experience to understand those words in a sentence (information). And you need perception and analytics to understand the sentence in the context of the situation (insights).
The same is true of eCommerce data. In the rush to become data-driven, merchants have mastered the gathering of data rather than the interpretation of that data.
Gathering data and interpreting data are not the same.
To understand the experience of eCommerce merchants, we can look at one of the key challenges outlined by Forrester in a Total Economic Impact™ study of the Mobile Optimization Initiative (MOI). Although data is abundant, merchants face a lack of meaningful customer experience insights. One merchant interviewed as part of the research explained:
“Without [the MOI] we would be working off unactionable data that we were logging. We wouldn’t know which data we should be logging. We would just be looking at if this year’s numbers were better than last year’s numbers and did that have anything to do with something different that we did versus being proactive about it and figuring out which things we should be changing or which things we should be adjusting.”
As a solution provider, you can leverage programs like the Mobile Optimization Initiative to gain access to a large pool of anonymized aggregated data from participating eCommerce merchant sites. The data is analyzed for key performance metrics like Revenue per Visitor (RPV), Conversion Rate (CR), and Average Order Value (AOV). And finally, eCommerce stakeholders put their heads together to analyze the information to develop actionable recommendations and guidelines for future eCommerce optimization.
In this way, you can stand out from the competition and help your clients reach the next level of maturity that Forrester calls insights-driven business. These insights-driven businesses are customer-obsessed firms that systematically harness insights across their organization and implement them to create competitive advantage.
2. Productize services to scale opportunities across more merchants
Service businesses are the most challenging businesses to grow. Aside from the regular challenges of running a business, you’re also tasked with having to take on new business while ensuring you have the resources to service the contracts and skillsets to meet demand.
One solution to this conundrum is to create a productized service. A productized service can help you differentiate by delivering a packaged, repeatable service at a fixed or tiered cost. By packaging the service and systemizing every detail of the delivery of that service, you can deliver it more efficiently, at a lower cost, and serve more customers.
For example, if you have many clients in the fashion industry, you can develop a “Fashion Industry Optimization Package” with a set of standardized experiments (e.g. checkout optimization, wishlist, coupon collapse) that run continuously as part of a recurring revenue model. The data you collect from specific industry verticals can help to validate your knowledge in the space — positioning your business as a guru or thought leader in that vertical.
Alternatively, you could create an optimization package that focuses on one area of the eCommerce sales funnel. For example, navigation, product details pages, checkout, shopping cart, etc. For Checkout, you could bundle several common tests together into one package:
Because each of the experiments are standardized and run across the community, it’s easy to productize them into packaged, repeatable services.
The biggest benefit of a productized service is that you sell the same services every time — eliminating the need for custom quotes. Start with an initial funnel analysis, evaluate a good-fit solution, and then implement the optimizations that are a part of the package. Generally the productized service can be purchased in a low-touch way, via the website, and has simple SaaS-style pricing and metrics.
3. Define your target market and specialize your eCommerce services business
It’s very hard to turn down business, even if your gut tells you it’s the wrong fit for your agency. However, by honing in on a target market and specializing in specific innovation areas, you’ll differentiate yourself from the competition — especially the competition that tries to be everything to everyone.
Clearly define your target market and build a persona for the types of clients that you’ll take on. For example, will you focus on a specific eCommerce segment (e.g. fashion, beauty, automotive, food and beverage)? Will you work with small business owners or larger companies? Are you going after savvy, innovative clients with a lot of digital maturity or clients that are just starting their journey?
Once you’ve mapped out your target market, decide to take on one or more areas of specialization. With each new technological advancement, more niche specialties arise. The big bet for the next 12 months is mobile commerce. Within that specialization, there are even more niche areas to focus on like progressive web apps (PWA), mobile optimization, and experiential commerce. Pick a niche and stake a claim to it in your thought leadership and marketing efforts.
4. Offer alternatives to the status quo: advanced experience optimization testing
Many eCommerce merchants rely on data from static testing models like A/B testing to make crucial user experience decisions. However, in today’s experience-driven economy, the linear visitor behavior of the past has been replaced by a highly fragmented path-to-purchase.
As a service provider, you can differentiate yourself by providing an approach to testing that accounts for the dynamic, multivariate world of eCommerce — adaptive experience optimization.
Adaptive experience optimization applies artificial intelligence to the testing process to continuously detect and adapt to visitor preferences in real-time. Its self-correcting feedback loop minimizes the risks of experimentation by overplaying good experiences while filtering out the bad ones.
- Does not account for dynamic and changing shopper behaviors
- Low number of tracked variables and no multivariate insights
- No intelligent adaptation to counteract underperforming tests
- Time-consuming and hard to scale
Adaptive Experience Optimization
- Built for the dynamic, ever-changing eCommerce industry
- Accounts for multivariates
- Adapts in real-time to user behavior to improve the experience and avoid lost revenue
- Easy to scale as part of the Mobile Optimization Initiative
Adaptive experience optimization is the technology backbone of the Mobile Optimization Initiative — a community of merchants, systems integrators, and eCommerce experts working together to improve the mobile customer experience. The Initiative’s community-based approach gives you have access to anonymized mobile conversion data from millions of transactions in real-time. With more data and a deeper understanding of how shoppers behave, solutions providers can identify opportunities to help clients make better optimization decisions faster than they could testing in isolation.
The Mobile Optimization Initiative offers a great opportunity for service providers to deliver high-performing optimization tests, actionable insights, and create new recurring revenue streams.
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