Part of a series on Business Problem Solving
Scaling a Commerce business seems, on the surface, like it could be a very linear affair. Shipping worked so far? Fine, do it more and faster. Getting more financial data entry with our newfound success? Just hire more admin staff. Supply Chain availability and scheduling awareness? Dave will do it - more. Dave? Dave?
It is so much more complex than that. Many SMEs have found that the key to success when scaling their business does involve some of those tactical responses, but also many other considerations regarding how they create and manage a company culture, plan for growth in terms of resources, capital and inventory management, and ensure customer service drives retention.
If you're a startup or smaller business you still need to keep reading. This list still applies to early stage growth companies – these issues are just as real as you grow as well, best prepare now and map out your strategy.
Here are the top ten challenges that SMEs often encounter when scaling their commerce business:
(in no particular order)
Competition: SMEs face fierce competition in the online marketplace. It's crucial to differentiate themselves and stand out from competitors to capture market share. Keeping track of changes in consumer behaviour, trends, and industry developments is essential to stay ahead. Reaching the right customers is an important challenge for SMEs. From understanding their target demographic to using the right marketing channels, it's essential to identify and reach potential customers in order to grow the business.
Customer Acquisition & Retention: Acquiring new customers costs more than retaining existing ones, so it’s important to focus on retention strategies and customer loyalty programmes. Taking the time to understand the needs of customers helps build lasting relationships, as well as testing different marketing tactics to reach out to prospective ones.
Fulfilment Logistics: Think of this as part 2 of Customer Acquisition & Retention. When scaling an e-commerce business, having reliable logistics and fulfilment solutions is key to building a loyal and passionate customer base. Timely delivery of products and services and a responsive, streamlined order fulfillment process to meet customer expectations efficiently is critical as sales volumes increase.
Customer Experience: Providing a seamless and personalized customer experience is more challenging as the business scales and interacts with a larger customer base. A well-defined customer service process and understanding of the customer journey is essential to ensure excellent buyer experience from start to finish.The blend of Administrative Experience (AX) and Customer Experience (CX) expands in ways you can't deal with in mere (grunt) hours worked.
Data & Analytics: To effectively scale a commerce business, it’s important to leverage data and analytics and evolve your analytics best practices. Using insights gained from data analysis helps make informed decisions about product development and marketing strategies. It also enables businesses to understand customer needs and helps them to create personalized experiences.
Technology & Automation: As businesses scale, it’s important to select, upgrade, expand, the right technologies and ecosystem partner platforms to support their growth and speed required. Payment systems, decision automation, and ecosystem data integration strategies are essential for a successful commerce business that meets and exceeds customer expectations. The right technology strategy and partners is key in order to stay ahead of the competition. The speed and complexity of Administrative Experience (AX) and Customer Experience (CX) expands in ways you can't deal with in mere (grunt) hours worked. Workflow streamlining, decision automation have to take on roles of their own in your organization, they need to be the staff eyes and ears 24/7 company-wide where humans can no longer be.
Financial Management: Effective financial planning and management are essential to sustain growth and profitability during the scaling process. With real-time integrated data with financial management systems and tax compliant platforms in place, SMEs can process sales data in real time to make faster, informed decisions to be agile and responsive to the market.
Product & Service Development: As sales volumes increase, businesses need to focus on product and service development. This involves understanding customer needs, collecting feedback from customers, testing new products before launch, and looking into how competitors are innovating in order to keep up.
The speed and complexity of Administrative Experience (AX) and Customer Experience (CX) expands in ways you can't deal with in mere (grunt) hours worked
Managing Supply Chain Logistics: An efficient supply chain is key to ensure customer orders are fulfilled on time. It’s important to build and nurture a reliable and cost-effective way to manage inventory, warehouse space, transportation costs, distribution centres, etc. and in doing so, maintain accurate real-time information for customer ordering expectations.
Marketing Strategy & Market Intelligence: Last but not least, SMEs often struggle to develop and implement a a next generation effective, data-driven marketing strategy. A successful plan requires in-depth market intelligence, understanding of customer behaviour, and competitor analysis. Utilizing and interpreting data effectively allows businesses to refine their target audiences, tailor their offerings - often in real time if your automation is done properly, and position themselves effectively in the market. Harnessing the power of automation and real time adjustment in your digital marketing and content strategy is pivotal for enhancing online visibility, increasing website traffic, and ultimately driving sales. Thus, mastering and rolling up the art of leveraging your platforms and decision automation into a data-centric marketing strategy can be a significant challenge, but also a game-changer when scaling a commerce business.
These challenges require strategic planning, proactive problem-solving, and leveraging industry best practices. By understanding and overcoming these hurdles, small business on a growth trajectory and established SMEs can navigate the scaling process more effectively and achieve long-term success in the commerce landscape.
(Source: Business News Daily, Investopedia, KUB-UK, Wix, US Chamber, LinkedIn)