Practical Ecommerce

4 Reasons to Think About Brand

Developing a brand for a small ecommerce store may help otherwise hurried and busy entrepreneurs and managers do a better job of managing the business, engaging customers and potential customers, earning profits, or even saving money.

“Branding is often seen as a fluffy subject,” wrote Avid Larizadeh in a recent Forbes article. “It’s de-prioritized because it is neither tangible, nor easily measurable and belongs more to the creative types than left-brain entrepreneurs. But dismissing the importance of branding is a big mistake, especially for consumer facing companies. Branding is critical to the success of any business.”

Defining Brand

For online retailers, brand might be described in a couple of ways.

First, there is the brand as customers see it. This “brand” is, in a sense, a store’s reputation. It is how shoppers think about a business, and it includes the ideas or concepts that they associate with that business. To help explain this first branding definition, focus on the first things that come to mind when you think about Amazon, Apple, Macy’s, Nike, or Starbucks.

Odds are good that you were familiar with each of these five companies — all of which operate some form of an online retail business, by the way — and for each one you have a “brand” impression.

A second definition of brand has to do with how a business wants to be perceived. You know that every customer is going to form some brand impressions each time they interact with your store, so if you could pick the ideas, concepts, or feelings those customers associate with your business, the things you choose would be your company’s brand or at least its desired brand.

Branding as a business activity may be thought of as the act of conveying your store’s desired brand to customers and potential customers through business operations, marketing, and customer service.

Even once it has been defined. Brand can be a squishy concept. So what follows are four additional reasons that every ecommerce entrepreneur and manager should spend some time thinking about branding.

Your Brand Can Help You Manage Your Business

It may seem strange to think that something intangible like a brand can be a business management tool, but many businesses use a brand as a way of guiding business decisions from the products chosen to people hired to customers served.

I know of a multi-channel retailer, for example, that has set up four “core values” as part of its brand. These include the ideas of service, integrity, relationships, and constant improvement. When this retailer makes business decisions, it looks to its core brand values to guide it.

For example, a customer wanted to return a pair of shoes after 60 days. The shopper had purchased with the retailer before and had really tried to give the shoes an honest try. The retailer’s written return policy said that items could be returned for up to 30 days. In spite of that written policy, the retailer processed the return, gave the customer a full refund, and even paid for the return shipping. Why? Because service and relationships were part of the retailer’s brand. And you can bet that the customer will come back and make another purchase because his brand impression of the retailer is positive.

Similarly, the same retailer is in the habit of refunding shoppers a portion of shipping fees if the actual cost of shipping ends up being less than the price quoted on the retailer’s site. This is an easy management choice for the retailer to make, since it is congruent with the company’s brand values, specifically with integrity.

Once a business has defined what it stands for it becomes much easy to make business decisions.

Your Brand Can Help Engage Customers

Brand and the way that a retailer defines its brand can be a driving force behind marketing efforts and, therefore, a powerful way to engage customers.

As an example, think about a retailer that wants customer service to be an important part of its brand. This merchant might go out of its way to be helpful or useful to shoppers. In turn, this desire to be useful will inform marketing choices.

A retailer of sporting goods could publish a series of YouTube videos that demonstrate how to swing a baseball bat. The videos would not be about selling bats or baseballs, but rather would focus on being useful to the viewer as an extension of the company’s brand. These videos will engage potential customers and when the time does come to purchase sporting goods those shoppers who benefited from the videos might be more likely to purchase from this retailer.

Similarly, a retailer with a brand aimed at providing customer service, is going to do more to answer questions or concerns on Facebook, Twitter, or other social media sites, and might invest a greater number of resources into answering emails or offering live chat. In all of these cases, a defined brand informs marketing choices.

Your Brand Can Make Your Business Profitable

New or small ecommerce businesses often focus most marketing attention on acquiring new customers. There are certainly plenty of good reasons for that approach. A new business almost by definition won’t have established customers so all of its initial marketing will certainly be focused on earning new business.

New customer acquisition and new customer marketing, however, often have the lowest return-on-investment, so that focusing on brand building will often make a business more profitable in the long term.

Perhaps one of the most important customer-retention studies released this year comes from Adobe. Titled, The ROI from Marketing to Existing Online Customers, the report demonstrates that long-term customer relationships are much more valuable to online retailers.

Adobe found that about 8 percent of online shoppers are returning or repeat customers, but that those 8 percent accounted for 41 percent of online revenue. In the United States, new customers represented an average online revenue of $2.06 per visit, while a shopper returning for a second purchase represented an average online revenue of $5.22 per visit, and a repeat purchaser returning for a third or fourth purchase represented an average online revenue of $10.24 per visit, according to Adobe.

Thinking about your store’s brand and focusing on conveying that brand to customers, may help your business build long-term customer relationships, which in turn are likely to be more profitable.

Your Brand Can Save You Money

A well-defined brand may also be a defense against needlessly spending money or spending money on the wrong things.

There is a sense wherein a well-defined brand is really a well-conceived business. Having defined what your store is really about will help you avoid spending mistakes.

For example, there is a retailer whose brand includes a focus on traditional family values. That retailer ordered in a number of zombie-themed products during the October holiday season last year. The items featured images of the undead, blood, bloody weapons, and similar. Not surprisingly, the products didn’t sell well for the retailer, and some customers, who had a strong sense of traditional family values, were offended. Zombies were not compatible with the brand the retailer had been building, and assessing that brand before making the zombie purchase would have saved the retailer money.

Armando Roggio
Armando Roggio
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Comment ( 1 )

  1. Alessio January 28, 2014 Reply

    Hallo, i’ve a question.

    I should create an ecommerce for a person that have a personal brand a bit diffused, and he want to expand his personal branding.

    I thinked about create another brand for ecoomerce, but let visitor to know that there is he behind that ecommerce with video, blog post ecc.

    What do you think about this strategy?

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