E commerce appears to be taking Nigeria by storm.
Slowly but surely the infrastructural gaps that where a major hindrance are finally being bridged as a result of a bunch of factors on the consumer and retailer side, that being said, credit has to be given to some of the clever CEO’s that are masterfully manoeuvring their various company flagships along the iceberg laden waters of online retail in Nigeria.
A crucial aspect to any e commerce endeavour is an ‘e’ presence and this is usually in the form of a website. A website represents your store in cyberspace, its where a customer walks in and purchases an item or two or three (you get the idea) from the comfort of his home office or wherever via his desktop or mobile device.
One of the few similarities that online retail stores and traditional retail stores have in common is the need to make money. The idea is to make money from customers through sales or transactions, but what is more important for an e commerce store? Should you monitor traffic or transactions?
Obviously there is a need to monitor both of these metrics, so the real question is what is a better measure of performance.
There are two schools of thoughts on this topic and both sets raise some valid point. I believe that for any store (offline or online) the more visible you are to your market the better chance you stand of being seen and thus making more money from your market. For an e commerce store this measure of visibility is determined by how much traffic (visits to your site) you get.
Within the e commerce sphere, transactions are great but they do not paint the whole picture, for example if you have one thousand transactions in one day, depending on your business it’s safe to assume that you are doing quite well right? Well what if those thousand transactions came from just a handful of visits, maybe ten or twenty, what does that say? Well it certainly suggests that you could do with more traffic. What it doesn’t tell you explicitly is that you need to revisit your marketing strategy and expand your reach. With a thousand transactions (that came from a few visits) you may have hit your daily transaction/revenue target and to the transaction lover this is enough to justify performance for that day.
Let’s flip the scenario, if you have a ton of traffic to your site on a daily basis but only a handful of transactions this gives you a more insight into performance in terms of what you are doing good and what you could be doing better. For one it suggests that there is an awareness of your site (thus product) among the general populous, it also tells you that the current set of products you offer on your site are good but they do not carter to majority of the site visitors, thus informing you of a need to expand your product base. Basically a lot of customers are walking into your shop but they don’t like what they see, the solution is to change what they see.
The tricky part of retail is getting people into your shop, and this is especially true in online retail particularly in Nigeria where online shopping is still at its embryonic stage.
Traffic is a great measure of performance once you get that right you can then go about figuring how to get the visitors to transact. The process of figuring out how to get your visitors to transact goes a long way into improving and diversifying your strategy.
The customer is king and the number of Kings you have at your dinner table says more about you than how often a King dips his spoon in the soup bowl.