Online Retail

A good basic strategy is more important than ever for businesses trying to compete and make money in the digital age. Unfortunately many leaders fail to even think about strategy when they enter the digital arena.

The basis of all effective strategies is the implementation of a few key principles. An understanding of these principles can point you to an effective digital strategy.

Key Principles for Implementing a Successful Digital Strategy

A few basic principles that can form the basis of an effective digital strategy include:

  • Amplification: One of the biggest advantages to digital technology is the ability to amplify business processes. An example of this could be a small business that uses a website; or an ecommerce platform such as Amazon.com, to sell its products all over the world. Another is the use of next generation social media solutions such as WhatsApp to market goods and services worldwide. Many technologies including cloud storage can be used for amplification. Amplification was the basis of the success of many of the largest online businesses including Alphabet, Facebook and Amazon. Understand it is critical to competing online and in social media.

  • Integrate data and analytics into marketing and customer service efforts: An example of this would be tailoring content to take advantage of trending topics online. Another would be an attempt to use data to identify the characteristics of the customers you want and to tailor content to that which is most likely to attract those individuals. One way many companies; such as Alphabet, have succeeded is to develop data-obsessed cultures. Data is vital, because it is often the only means you have of understanding what is happening in the digital realm.

  • Never forget that there are human beings behind the numbers: Many organizations become obsessed with data that they forget they are marketing to people. Examples of data-driven content that drives away potential customers abound. A common mistake is blog posts and other online content written to attract the attention of Google or other search engines, rather than customers.

  • Efficiency: One of the key advantages of digitalization is to make a process as efficient as possible. Reducing labor costs and the chance of costly errors by accepting digital payments rather than paper checks for example. Many companies are no longer competitive because they fail to that efficiency itself is a strategy. Lowering costs and speeding up the process can save money and attract customers. Simplifying the process can enhance customer service and drive business as well. One company that has succeeded through efficiency is Amazon; which strives to make ecommerce as efficient as possible.

  • Simplification: The most neglected advantage of digitalization is simplification. Making a process as simple as possible makes customers more likely to use. People use PayPal because they simply have to click on a button to pay for example. Google succeeds because all individuals have to do is type a word into the search feature. Some of the simplest online solutions such as Facebook and WhatsApp have been the most successful.

  • Centralization or concentration: One of the inherent tendencies in digital processes is concentrate activity into a few centralized processes. Examples of this include Google’s domination of search; Facebook and WhatsApp’s popularity in Social Media, and Amazon’s success in e-commerce. Alphabet in particular has proven that one way to make money online is to provide a simplified efficient solution that can dominate an entire sector.

  • Lower costs: To successfully achieve concentration, a solution must actually lower costs. Much of Alphabet’s success comes from the fact that Google provides the cheapest advertising available. In the United States, at least Amazon’s prices are often much lower than some brick and mortar competitors. Electronic payment is popular because it is genuinely cheaper than the use of paper checks.

  • Verification: Customers in the digital arena are accustomed to receiving immediate verification of the results of a process. A prime example of this phenomenon is Google analytics of a website’s viewership. That tells the website owner how many people are visiting and offers quantifiable data in real time. Successful digital competitors understand that customers expect such verification.

  • Transparency: Many of the most successful digital solutions provide a high level of transparency. Google Analytics provides a vast amount of data to advertisers and marketers for example; Alphabet lets developers see the code for its Android operating system; Bitcoin’s block chains are available to all. Transparency creates trust and builds customer loyalty,

  • Openness: Closely related to transparency is openness. Opening up a system can lure others in and turn them into customers as the success of Android demonstrates. Apple and Android drove large amounts of business to their phone platforms by allowing many participants to develop apps for their system. Bitcoin has become a fast growing payment solution, because it is available for all to use.

Grasping these key principles is the first step to devising a successful digital strategy. Once you understand these concepts, you can begin to think like a digital strategist and develop a competitive business model.

Successfully adopting these principles can be difficult; but those entrepreneurs and companies that have achieved that goal have made a lot of money.

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