Most Common Opportunities I’ve Observed in Growing E-commerce Businesses

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At Barrel, a segment of our clients (and prospective clients who contact us) are growing e-commerce businesses doing anywhere between $500k to $5 million in sales. They are typically run by small teams (usually less than 10 people, often just 2-5 people) and have either been bootstrapped (funded with the founder’s savings plus the profits of the business) or with a small seed investment from friends and family. Drawing from my observations and experience reviewing dozens of such e-commerce businesses over the years, I thought it’d be a useful exercise to share some the most common opportunities we’ve come across and identified for these companies.

Here’s a quick overview in bulleted list form:

  • Google Analytics Setup & Campaign Tracking
  • Email Automations
  • Product Photography
  • Image Size / Website Speed
  • Product Organization
  • Product Recommendations

Google Analytics Setup & Campaign Tracking

One of the most common issues I’ve seen over and over again is the overall neglect of the company’s Google Analytics account. Google Analytics helps you track traffic, user behavior, and e-commerce performance. It’s a great way to gauge the performance of the website and to see what kinds of marketing activities and traffic sources generate the most revenues. However, if not set up properly, data can get muddied and the analytics will become less useful.

A very specific common issue is the lack of organization when it comes to campaign tracking. Campaign tracking is achieved through UTM parameters. UTMs, or Urchin Tracking Module parameters, are “five variants of URL parameters used by marketers to track the effectiveness of online marketing campaigns across traffic sources and publishing media” (source: Wikipedia). Here’s an example in which I’m utilizing three of the parameters:

  • https://www.peterkang.com/?utm_source=newsletter&utm_medium=email&utm_campaign=welcome-email

As you can see, the source is “newsletter”, the medium is “email”, and the campaign is “welcome-email”, which signifies that I am tracking the traffic coming from my welcome email newsletter that automatically gets sent when someone subscribes to my list.

What I often see are various campaigns labeled willy-nilly, spawning different names for the same marketing activities. For example, I’ve seen traffic coming from paid Facebook ad campaigns as “facebook / cpm”, “paidsocial / fb”, “fb / paid”, etc. for the source and medium parameters. This creates issues on the Google Analytics side as it splits up the campaign traffic into several different items on the list. This then has downstream impact as it requires tinkering with Google’s Default Channel Grouping setup extensively in order to properly categorize different campaigns into the right channel types. One way to quickly see if your campaign tracking is a mess is to view Acquisition >> All Traffic >> Channels. If you happen to have quite a bit of traffic under (Other), then you’ll know right away that marketing activities are not being categorized into the proper channels.

One way to prevent this is to keep an organized system for producing UTM links. We’ve introduced many of our clients to a spreadsheet as a way to centralize and keep track of their UTM links. Here’s a Google Sheets template for anyone who needs to shore up their campaign tracking.

In addition to the campaign tracking issues, here are some common Google Analytics account issues we often see:

  • No Goals set up for newsletter sign-ups or e-commerce transactions. Goals are helpful for visualizing the funnel and seeing where users drop off. It’s fairly easy to set up but just requires testing to make sure it’s working properly.
  • Site search tracking not turned on.  For sites that carry many products and have a search function that’s widely used by customers, it’s essential that you have site search tracking turned on so you can see analytics on search terms and usage.
  • Lack of annotations. This is less of a setup issue and more of an on-going practice. We encourage our clients to always put in annotations whenever significant PR and marketing events occur. For example, if the company is mentioned in a prominent magazine or on TV, it’s important to note it in the annotations box because a lot of traffic will actually be classified under direct and organic search and the annotation will be one way to remember that it accounted for the bump in visitors that day.

There are a number of other setup details that we see missing, like stripping URLs of query parameters to avoid splintered pageview stats, setting up proper audience definitions, and getting Google Tag Manager set up properly so events like button clicks or scroll depth can be measured. These all represent some quick-win opportunities for a company that’s looking to make better use of analytics to make informed decisions about marketing and website performance.

Email Automations

For most e-commerce businesses, email is still the highest performing marketing channel. This is not surprising. The email list represents a group of people who’ve self-selected to receive marketing messages from the company. They are the ones most likely to buy or buy again. Understanding this, an obvious opportunity is to make sure that these email list subscribers are hit with relevant emails at the right times. Email automation is a feature that’s available on almost all email service providers (ESP). Two of the most common ESPs we use are MailChimp and Klaviyo. They have fairly robust email automation tools.

At its core, email automation is about sending timed emails to a specific audience based on pre-set triggers.  There are countless varieties you can put together and sophisticated e-commerce businesses have incredibly complex automations. For many growing e-commerce businesses, I often see even the most basic automations missing. When we implement these, our clients often see thousands of dollars easily convert in the course of a few months. The advantage of email automations is that once they’re set up, they run on their own.

Here are a few of the most common ones:

  • Welcome flow for new email list subscribers. When someone signs up for the list, it’s an opportunity to send one or a series of emails that introduces the brand, the products, and the story behind them. Incentivizing a new email subscriber with a promo code or some kind of incentive (e.g. free shipping, free sample) can be an effective way to convert someone into a first-time customer.
  • First time purchase. For someone who’s converted as a paying customer for the first time, it’s an opportunity to thank them and engage them with content relevant to the product or something that makes them smile. This automation can also include a follow-up some weeks later asking the customer to leave a review of the product.
  • Replenishment reminder. If the product is one that runs out or naturally wears with use (e.g. a skincare product, apparel, beverage, etc.), an automation that sends a reminder email at the optimal time can bring a customer back for a repeat purchase. Even for businesses that offer subscriptions, a replenishment email for non-subscription customers can result in repeat purchases.
  • Winback. An automation that sends a promo email to customers who have not engaged with the company in several months is one way to win them back. The timing depends on how you classify a dormant customer. For some products, it could be as short as 60 days and for others it can be 6 months.
  • Birthday. By collecting a list subscriber’s birthdate, you can set up an automation to send a special discount code to that person on their birthday. It’s a simple yet often effective way to generate sales throughout the year. As the list gets larger, this automation becomes more and more useful.

Product Photography

For many e-commerce businesses, displaying the product in an attractive can mean the difference between mediocre sales and great sales. Of course, there are other factors like the quality and look of the packaging or the form factor of the product itself, all decisions that are made before the product makes its way online. However, there are various opportunities to improve the presentation of the product on the website through strong photography.

These are some common recommendations we’ve made to clients when reviewing their product photography. Not all are going to be relevant for every type of product.

  • High-resolution and crisp quality on zoom. Every now and then, we still see product photography that’s low-res and fuzzy and looks awful on zoom, making it hard for customers to make out certain details.
  • Showing multiple angles of the product on a clean background. Another way to accomplish this is by using 360-degree capture and embedding a draggable view onto the page, but this can be overkill for many products. Depending on the product, showing a few different angles can give the customer more confidence in making the purchase.
  • Showing the product in action. For products that are better understood in context of their environment (e.g. furniture to show sense of scale or how it looks in a particular room) or through use cases (e.g. a kitchen appliance that can perform multiple functions), a photo of the product in action can help the customer visualize owning it. In some cases, showing these situations in video format can be quite effective as well. These images are useful on product pages as well as across the website on various landing pages like home and product listing pages.
  • Showing everything that you’ll get with the purchase. For products that come with several components (e.g. an electronic device with a charger and other accessories), having a photo of all the pieces that come in the package ensures that the customer is clear about what’s included and not included. In some cases, this photo can reduce unnecessary customer service inquiries.

Investing in product photography is seldom a mistake. In fact, having a great deal of product photography can be a valuable asset as it gives you additional opportunities to use them in social media posts and various paid marketing campaigns.

Image Size / Website Speed

This is a simple one we can spot typically spot by running the website through a tool like Webpagetest.org. Oftentimes, we see images that have not been properly compressed or saved at a reasonable size, and so rather than loading a 150kb JPG, a 3MB PNG might be in place, forcing longer load times and slowing down the website. Sizing down images and using a compression tool like TinyPNG across the entire website can improve website speed quite a bit.

Product Organization

Product organization is more of an issue for businesses with large product catalogs. For example, apparel or beauty companies that have more than 100 or even 1,000 products will need to be strategic about the taxonomy of the products, ensuring that the classification of different product types is intuitive for users browsing on the website.  Here are a few common issues that we come across which can be addressed by revisiting how products are organized into different categories and attributes:

  • Categories are too general and can go deeper. The original categories are not specific enough and, over time, have too many products that may require users to browse irrelevant products. An example is if an apparel brand has a category called Shirts and has a plethora of t-shirts, button-down shirts, and polo shirts. It would benefit the user if the website had one more layer of categories.
  • Categories/attributes are too specific and fragment product lists unnecessarily. On the flip side, the categories are too specific without a unifying top-level category, fragmenting the product browsing experience and frustrating the user who just wants to get a quick view of all the related products. This is also an issue when it comes to attributes and there is a Product Listing Page that has too many options. For example, on a site selling jackets, rather than having a list of the most popular colors, there are two or three dozen color combinations (e.g. red/grey, red/dark grey, red/green, etc.) with 1 or 2 results each. Unless customers are known to be very specific about certain color combinations, this can work against making it easy for them to find what they need.
  • Website needs product organization hygiene work. The product catalog has experienced an overhaul but the website does not quite reflect this. For example, a beauty brand may have phased out a certain collection of products (e.g. products that help treat acne) but the navigation still has a link to an empty collection page. We often find that websites can go many months without a general clean-up of the navigation, leading users to dead ends.

Product Recommendations

The ability to intelligently recommend products while a user browses through a website is something that doesn’t get taken advantage of enough by most e-commerce websites. This is an area where we often have a great deal of discussions with clients and where lots of opportunities to increase both conversion rates and average order values can come about. Here are some common opportunities:

  • Bestsellers. This sounds like a no-brainer, especially for sites with larger product catalogs, but we often come across websites that do not take advantage of the draw that a listing of the bestselling products can have on users. Of course, not all brands may find a bestseller recommendation appropriate, especially those with a limited number of products or those that may not find a bestseller listing compatible with the brand (e.g. ultra luxury brands that would rather not put their iconic bestseller under a “Bestseller” listing).
  • Pairs well with / Works well with. For any brands selling complementary products, we often see opportunities to push the recommendation in a number of ways. This can be done through a section on the Product Detail Page, a pop-up when one of the products is added to cart asking if the user would like to also add the complementary product, or during the cart and checkout process. Done well and in a manner that adds value for the customer (rather than obnoxiously trying to get them to buy something they don’t need), this can be a powerful type of recommendation.
  • Also purchased with / You may also like. This is similar to the pairs well with / works well with recommendation but the products recommended here may not necessarily be complementary products. Using data from past customer purchases or using a personalization engine (there are dozens of companies claiming artificial intelligence / machine learning capabilities in recommending super relevant products–not all are created equal, so you’ll have to do your due diligence), the website can display products that may appeal to someone who has been looking exclusively at a certain category. For example, think of a parent who’s only looked at high-end strollers on a baby product site getting recommendations for other high-end baby strollers and high-end accessories for the stroller.

Just Scratching the Surface

The common opportunities presented above are often the “low hanging fruit” that we can quickly act on to see some results. The harder work comes in the form of diving deeper in the analytics, drawing out insights, and designing tests we can run to see whether or not we can gain improvements. This is often not the glamorous work of fresh redesigns but incremental improvements like shaving off a second from mobile load times through code refactoring, testing out the copy on certain call to action buttons across different pages, or making sure we’re setting up proper canonical URLs for categories and collections that go by multiple names but carry the same products.

When it comes to running an e-commerce business, a great deal of the success we’ve observed in our clients at Barrel comes from the relentless work of rolling out continual improvements and the ability for brands to connect meaningfully with customers. These two types of activities go hand in hand and are often intertwined. For example, a brand that communicates often and effectively with fans through owned social channels will benefit greatly by having effective landing pages that give engaged fans an easy way to purchase or to sign up to get emails. There may be spikes every now and then with new product launches or a chance mention by a big-time influencer, but it’s often the sustained effort and dedication to the process of learning, planning, and improving that accumulates into results in the long run.

Most e-commerce businesses are a slow grind that takes patience and grit, and as more and more companies come into existence trying to make their mark online, I know many will fizzle out and fade away. For those that are willing to tough it out, our team at Barrel is eager to join you for the ride.

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