South Africa had a GDP growth of roughly 0.4% in 2019; however, with an inflation rate of around 4%, it technically means our growth is going backwards.
However, the good news is that the eCommerce market is one of our faster-growing markets which brings new opportunities for small to medium-sized business owners.
The eCommerce market is predicted to hit $3,840 billion (R55 billion) in revenue at the end of 2020.
That’s approx. 15% growth from 2019!
If you are an eCommerce business owner, or if you are looking to start your own e-commerce store, then this episode of the Version Eight Marketing Podcast is for you!
Some Fundamental eCommerce Marketing Insight
Don’t Forget About The Digital Marketing Math
Like any kind of business owner, you must know your numbers when it comes to your product or service.
For example, if you are selling a pair of jeans, you need to understand what it costs you to make a pair of jeans.
Now, this is the easy, part; however, understanding and predicting your profit when it comes to digital marketing is a whole other equation.
When it comes to your digital marketing, small business owners tend to forget that you have to spend money on a platform like Facebook or Google to drive traffic to your eCommerce store.
Not every single visitor is going to buy your product, even though every individual visitor will come at a cost.
The average conversion rate for an eCommerce store is 1-2% which means that 1 to 2 people in 100 visitors might end up buying something from your store.
Considering the above, if the cost of a click is R5, then to drive 100 visitors to your store will cost you R500.
Essentially, this means that a sale will cost you R500.
By selling a pair of jeans for R600, some business owners might think that they made their money back on their investment as well as a R100 profit; however, this is not the case.
You see, to get to the real profit, you will need to deduct your cost of the jeans (example R300), you have to deduct shipping costs (another R100), plus the cost of the sale (which is R500).
You can include any other additional costs in here of course.
Now, R300 + R100 + R500 = R900.
R900 is now your actual cost of sale, which means if you got R600 back, then you made an R300 loss.
Do you see why knowing your numbers is so important?
Learn more about digital marketing math by clicking on the article below.
The Number One Metric to Measure to Determine Whether Your Digital Marketing Strategy is a Success or Not
If you, the person in charge of your eCommerce store’s digital marketing, then it’s easy to get paralysed by all the different metrics Facebook and Google shove in your face.
With that said, we believe that there is one metric you should always keep in mind and value at high regard, and that is the lifetime value of a customer.
Learn more about the lifetime value of a customer by clicking on the article below.
Best Digital Marketing Strategy for eCommerce Stores
Because the lifetime value metric is such an essential metric for eCommerce store owners, we believe that there is one strategy that pays of dividends down the line, and that is to always focus on building a direct marketing channel for your business.
If you are starting out, the chances are you do not have a large audience to talk to, which means you will have to turn to pay-per-click advertising as a means of marketing.
However, what this means is that you have to pay to get someone’s attention.
If you focus on building a direct marketing channel in the form of email, SMS, Facebook Messenger, or even What’s App, it means that you can grab someone’s attention with the push of a button.
This means you can drive traffic back to your site at a much lower cost compared to R3 or R5 a click.
By lowering the cost of your traffic, you are reducing the cost of your sale, which means, more profit at the end of every purchase.
To learn more about this strategy, click on the article below.