Tuesday, August 21, 2012

E-Commerce - Product Strategy - 1

The first and foremost aspect in e-commerce is to decide on the products to be offered online. If one is already into a specific domain (for example retail apparel) and wants to extend into online space, then the next move becomes easier. If one is interested to get into e-commerce domain directly in the first place and has to decide on the products to be sold, exhaustive research needs to be done.

There are many goods and services that can be offered online. Typically, they can be classified into following broad categories:
  1. Physical products (like books, electronics, apparel, lifestyle and deals)
  1. Services online (like online marketplace, travel bookings, tax filing, video-on-demand and group-buying)
  1. Digital Downloads (like ring-tones, mp3 music, wall-papers and images for websites)
  1. Classifieds (like matrimony, jobs and property)

Each category of the products has its own unique characteristics that needs to be considered while making them available online.

Some of the physical products are big in size and quite expensive. The packaging and delivery needs must be considered carefully for such products especially from cost perspective.

One might think that providing services online should not be that challenging. While it is true that fulfillment and delivery are not quite difficult, providing the functionality itself is not that easy. Keeping the customer hooked on to the site to avail more services or repeat service is the key in this case. Earning the trust of the customer in some of the cases is also equally challenging.

The typical challenge with digital downloads category is the digital rights management. The digital content has to be procured from authentic source while paying due attention to copyrights. The complexity involved in delivery of the digital goods through various channels (like Web and SMS) cannot be undermined.

Classifieds is an area, which has been traditionally available in print medium. When it was moved online, it was the exact replica of mixed classifieds (sulekha, freeads etc) available on the Web too. Later, the specialized areas - like only job sites or only matrimony sites - have picked-up and delivered good results in India. There needs to be a good enough incentive for two or more parties to come together on a classifieds site to avail the service.

Identification of a domain is the first crucial step in starting an e-commerce venture.