EC Business: Increasingly Important During the Pandemic. Secrets to Growing Fans and Achieving Success? (Part 1)

Due to the impact of the COVID-19 pandemic, many companies are entering the e-commerce space or further strengthening their existing efforts. On the other hand, many people are likely facing challenges such as "We entered the market but aren't seeing much success" or "We're already involved, but with more competitors entering the field, we don't know how to strengthen our position."

Therefore, this time we will cover "The Latest E-Commerce Trends and Keys to Success." We spoke with Junichi Kato and Natsuki Nishi, members of a team specializing in supporting corporate e-commerce entry and enhancement at CARTA COMMUNICATIONS Inc., a leading digital marketing company in Japan, about the real-world state of e-commerce business.

The first step to e-commerce success is how closely you can align with your customers' needs

Q. Let me get straight to the point: What do you consider the most important factor for e-commerce success right now?

Kato: It's hard to sum up in one word (laughs). Of course, there are various scenarios, but broadly speaking, there are two main cases: "launching a new e-commerce business" and "revamping an existing e-commerce business." The "launch" scenario essentially means creating a new D2C Inc. brand. The core effort here boils down to "building a strong brand worldview, using that to create fans, strengthening engagement, and thereby increasing customer LTV (Lifetime Value)."

The other case, "revamping an existing e-commerce site," involves situations like a company that has been running its own e-commerce site but isn't seeing much success, or one that has a storefront on a marketplace like Amazon but isn't growing significantly. To break through these situations, we leverage our expertise to drive improvements. However, the actions needed here are really in the details – things like changing product images, properly handling gift options, adjusting delivery times, and so on. It's the accumulation of these steady, incremental steps that truly matters.

Nishi: Above all, I believe the most critical elements are "brand concept," "logistics," and "customer service." In other words, "how closely we can align our approach with the customer's perspective" is paramount.

For instance, consider manufacturers launching their own e-commerce. Many manufacturers, before starting e-commerce, often leave customer touchpoints to retailers or distributors. Consequently, they frequently don't consider the customer experience "from the moment the product reaches them onwards." What's crucial in e-commerce is the time from order placement to delivery, the impression when opening the box upon arrival, and such details. It's really disappointing when a product arrives in a dirty box, but if there's a single message card inside, it can make the customer feel much happier.

When it comes to gifts, this importance only increases. Details like whether the gift wrapping is done properly or if it's neatly packaged become crucial. Getting these right boosts satisfaction and increases repeat business. Conversely, if these basics aren't handled well, I don't think even the coolest website matters much. In fact, redesigning the gift boxes and packaging materials might be the priority.

While cherishing the brand's worldview, also prioritize "clarity"

Q. What other approaches can we take to truly connect with customers' feelings?

Kato: A common practice among D2C Inc. brands is including a message on the inside of the shipping box. But the real key is "how to turn customers into fans." Recently, we've seen more influencers running their own e-commerce sites, where they actively share the process with fans. For example, during product development, they might ask fans, "Which design do you prefer, Option A or Option B?" With Instagram, you can gather target feedback without needing group interviews. It's truly the pinnacle of "small mass."

Even with e-commerce expansion, gaining offline recognition or exposure in physical stores is actually crucial. Some customers see products in-store, search for them on the mall, and then purchase. Seeing products displayed directly also has the effect of significantly boosting excitement. Furthermore, connecting the "N=1" live feedback from customers gained in physical stores to improving satisfaction on e-commerce is also an important initiative.

Q. I see. Earlier, Mr. Nishi mentioned "brand concept" as a key point for e-commerce success. Could you elaborate on that?

Nishi: Well, I don't think a "self-indulgent concept" works very well. Many brands sell a stylish worldview, and while that might attract customers, they often leave if they don't gain a deeper understanding of the products.

When I manage a site, I make sure to include supplementary content and product descriptions that help customers understand the brand concept. There are quite a few cases where the visual presentation is stylish and cool, but customers can't tell the difference between the various products listed, so they end up unsure what to buy. While maintaining the brand's worldview, I place great importance on elements like "clarity" and "not being pushy" to truly connect with customers.

Kato: In today's world, where so many products flood the market, relying on just one theme for your concept can be weak. There are countless things with beautiful packaging, for example. So, perhaps one approach is to sharpen your concept by combining multiple elements, like "stunning packaging" × "designed by this influencer."

How has the COVID-19 pandemic changed e-commerce?

Q. The spread of COVID-19 significantly accelerated efforts in e-commerce, didn't it? What changes have occurred in e-commerce since the pandemic began?

Nishi: I've noticed a huge shift among manufacturers who previously had little interest in e-commerce. Before the pandemic, manufacturers focused heavily on offline sales due to their large scale there. Now, they're moving to open stores on malls to generate sales.

Specifically, I see major corporations rapidly expanding into e-commerce. In the e-commerce world, even brands unknown offline can rank highly on Amazon. Now, large companies with established offline track records and market share are entering this space.

In that sense, it might become harder for small brands that were "generally unknown but strong as D2C Inc. brands" to keep winning. However, it's also true that, at this stage, "products unique to e-commerce are still selling well." We even get consultations from major manufacturers asking, "Why can't we be number one online when we're number one offline?"

Numerous companies started with mail order and specialized in e-commerce, including logistics and customer service. They have dedicated themselves wholeheartedly to developing their e-commerce operations. Compared to them, even major manufacturers often lack the sheer volume of customer data they possess. Furthermore, many still lack fully developed e-commerce customer service and gift handling systems. Therefore, I don't think the situation where "just because it's a famous brand, it will immediately sell a lot online" will materialize easily.

The e-commerce market saw many large companies with strong offline track records enter the space, spurred by the pandemic. However, the situation isn't as simple as "they're well-known, so they'll sell well online immediately." Whether launching a new e-commerce platform or revitalizing an existing one, the crucial long-term perspective is "building the brand's worldview, cultivating fans, strengthening engagement, and increasing customer LTV." Especially in e-commerce, "logistics" and "customer service" are vital. The decisive factor is how well you can align with the customer's feelings from the moment they place an order until they open the box.

So, what are the further secrets to capturing customers' hearts and reliably boosting sales in e-commerce? Next time, we'll delve deeper into precisely that.

• E-commerce business, growing increasingly vital during the pandemic. What are the secrets to building a loyal fanbase and achieving success? (Part 2)