Tag Archives: online retailing

self-actualization

Taking Care of your Online Customer’s Self-Actualization Needs

Customers seeking to satisfy their self-actualization needs online do so to fulfil their total potential. Self-actualization represents the need for growth that people constantly strive for as they reach toward fulfilling their highest level needs.

Yes, if you’ve guessed that I’m talking about Maslow’s 1 hierarchy of needs, you’ve guessed correct. So, what can your online business offer to someone that already has battled through most of the layers of Maslow’s pyramid?

Let’s first have a look at how the pyramid is structured.

Maslow’s hierarchy of needs

self-actualization

Maslow’s Hierarchy of Needs

Looking at the pyramid, you’ll see that the need for self-actualization is right at the top. On the other hand, can the physiological needs of you customers be found at the bottom of the pyramid. Your customer’s most basic needs start at the bottom of the pyramid. As the needs are satisfied, your customer is motivated to seek the next level of need fulfillment. The need for safety and love/belonging and esteem make out the remainder of the hierarchy.

But will your customer satisfy her need for self-actualization when visiting your website? Maybe you should first recognise who the customers are that seek self-actualization needs…

Characteristics of customers seeking self-actualization (SA)

According to a study by Maslow, people who are looking to find self-actualization can be recognized as follows:

  • Realistic – SA persons have a more efficient perception of reality, they have comfortable relations with it. They are un-threatened and un-frightened by the unknown and have a superior ability to reason, to see the truth. Moreover, they are logical and efficient.
  • Acceptance – they accept themselves, others and the natural world the way they are. Furthermore do they see human nature as is, have a lack of crippling guilt or shame, and enjoy themselves without regret or apology. Also, they have no unnecessary inhibitions.
  • Spontaneity, Simplicity, Naturalness – spontaneous in their inner life, thoughts and impulses, they are unhampered by convention. Their ethics is autonomous, they are individuals, and are motivated to continual growth.
  • Problem Centring – they focus on problems outside themselves, centred on others. They have a mission in life requiring much energy, their mission is their reason for existence. And, they are serene, characterized by a lack of worry, and are devoted to duty.
  • Detachment: The Need for Privacy – SA people are alone but not lonely, unflappable, retain dignity amid confusion and personal misfortunes, objective. They are self-starters, responsible for themselves, own their behaviour.
  • Autonomy: Independent of Culture and Environment – SA’s rely on inner self for satisfaction. Stable in the face of hard knocks, they are self-contained, independent from love and respect.
  • Continued Freshness of Appreciation – they have a fresh rather than stereotyped appreciation of people and things. Appreciation of the basic good in life, moment to moment living is thrilling, transcending and spiritual. They live the present moment to the fullest.

According to Saul McLeod (Simply Psychology), Maslow estimated that only about two percent of people reaches self-actualization.

Concluding

Gratefully, it’s not everyone that seeks and reaches self-actualization. However, if self-actualization seeking people subscribe to your website, or follow your business on social networks, then you may possess a niche audience.

All that’s left is to keep their attention and monetize their loyalty.

Note

1 Maslow, A.H. 1943. A theory of human motivation, Psychological Review, 50(4):370.

Images

  1. Wikipidia.org
  2. Pixabay

Making Money Online Requires Analysis, Planning, Effort and Lots of Patience

It seems that right now is the best time for making money online. According to Statista.com, retail e-commerce sales worldwide amounted to 1.86 trillion US dollars during 2016 and online retail revenues are projected to grow to 4.48 trillion US dollars in 2021.

Ashwin Ramasamy writing for PipeCandy estimates that there are between two and three million eCommerce websites, excluding websites from China, on the web. So, if you do the calculation, taking the numbers of 2016, the average annual revenue per eCommerce website could be around 740,000 US dollars.

And with an online retail revenue of 4.48 trillion US dollars projected for 2021, there seems to be a lot of spare capacity to take up. Is making money online that easy? Not really…

“eCommerce has about an 80% failure rate. Other researchers claim it’s as high as 97%. One of the reasons the failure rate is so high is because an eCommerce business can be easy to set up, for a small amount of money. Creating a store front is easy. Making it successful, on the other hand, not so much”, says Dianna Labriem in Tech.co.

So, the Trillions of US dollar revenue generated each year by online retailers is shared by a handful of eCommerce websites.

Making money online the hard way

From the moment that you’ve activated your ecommerce website, you need already to know what value you’re offering your customers. In other words, what is your competitive advantage in the online market you’re targeting?

A sustainable competitive advantage may be defined as ‘the ability to deliver superior value to the market for a protracted period of time’ 1. Here, superior value refers to the fact that the consumers of a product or service must be convinced that they are getting something of value for their money. The value proposal for Bricks and Clicks retailers was previously discussed in this blog.

The hard way of making money online starts with analyzing your online market.

Analyzing your online marketplace

To make money successfully online, you need to know everything about your market. Your market consist of your customers, suppliers and intermediaries and your competitors.

Analyzing your customers:

  • Who are your biggest customers?
  • Who are the most profitable?
  • Where can you find your customers online?
  • Do your customers have any unmet needs?
  • What are the benefits they seek from your products?
  • And what price are they willing to pay for your products?

Analyse your intermediaries:

Intermediaries have captured a significant proportion of the profits available in the online retail market 2.  Therefore, their impact on your business’s marketing mix should be analysed.

  • The place (delivery) – most online retailers are dependent on logistic service providers to do the ‘last mile of delivery’ to their customers. Retailers should analyse the different service providers and choose one that is the most reliable at the best price;
  • Your product – only source products of the highest quality at reasonable prices from reliable suppliers;
  • Your promotion – which marketing intermediary will deliver your marketing messages the best? Google’s AdWords or social networks such as Facebook or Twitter?
  • The price that intermediaries charge – analyse the offerings and choose those who deliver the best service at reasonable prices.

Analyse your intermediaries

Analyse your competitors:

You need to find out how to satisfy customers better than the competition. By doing a competitor analysis you may begin to understand the level of competition that exists in your target market and it will help you to make the right pricing decisions.

The strategies and actions of your competitors may well determine if you will be making money online:

  • Who are our present and potential competitors?
  • What are the positions that they have established in the market?
  • What are their strategic objectives and thrusts?
  • What are their present and future strategies?
  • What are their strengths and weaknesses?

The next step to do to get your online business on its way, is incorporating all the data you’ve generated with your analysis into a strategic plan.

A strategic plan to make money online

By now you should know who your customers are; who the intermediaries are that you’re going to use; and whom you’ll be competing against. Now you should develop a competitive strategy.

The competitive strategies available for online retailers to obtain and maintain a sustainable competitive advantage are 1:

  1. The differentiation strategy – value is added to the product or service through differentiation to make it different from competitors’ products and services.
  2. The low-cost strategy or overall cost leadership – this implies that an organisation will supply a product or service more cost-effectively than competitors.
  3. The focus strategy – here you can focus on a special product/market niche that you may later monopolise.
  4. The pre-emptive move or first-mover advantage – this strategy can be pursued by an online retailer who takes a calculated risk by being the first to enter a market with a new product or service.
  5. Synergy – this means that all the components of an organisation are working together and so creating a sustainable competitive advantage. For example a physical retailer that adds the online channel to its business.

It takes a lot of effort to make money online

Mostly, money doesn’t just start flowing in because you have an ecommerce website. You may need to spend many hours a day to monitor the happenings on your, (and your competitor’s) website. You need to follow the trends in your market, negotiate with intermediaries and confront your competitors. You definitely need to create quality content for your website and also get a presence on social media networks.

Furthermore, you should manage the finance of your business and identify the risks of the business. Your online customers demand a 24/7 service – and that is what you need to deliver. For your customers, the alternative is a click away…

Concluding

Although the internet offers us billions of potential customers, anywhere at any time, it will take some time for your online business to show substantial profits. That is especially true for small retailers with a limited marketing budget…

However, if you do the right thing and do that right, with lots of patience and belief, you’re online business may be part of the 3% that make money online.

Notes:

1 Du Plessis, P.J., Jooste, C.J. and Strydom, J.W. 2001. Applied strategic marketing, Heinemann.

2 Laseter, T.M. and Rabinovich, E.  2011. Internet retail operations: integrating theory and practice for managers, CRC Press.

Images

  1.  Featured image: Pixabay
  2. Image in body: Pixabay

My Avatar and Me – Coping in the Virtual World

I got it when I discovered the virtual world, my avatar. It’s like jumping into an uncomfortable spacesuit and then free-falling from the physical world into the digital world. This is a world full of zeros and ones, to which they answer only yes or no, which should be only right or wrong. How on earth can we ever comprehend this abstract environment? We need to digitize ourselves. Hence may avatar and me…

What is an avatar?

Your Dictionary defines an avatar as something visual used to represent non-visual concepts or ideas. Or it may be an image that is used to represent a person in the virtual world of the internet and computers. Peachey and Childs, (2011)1 suggest that taking on the form of an avatar within a virtual world is resembling a literacy of crossing down from the real into the digital. Consequently, many of us created our first avatars when we start playing games online.

With online gaming, virtual worlds are three dimensional environments in which you can interact with others and create objects as part of that interaction. How do you do that? You appear as an avatar in the virtual world: an avatar is a virtual representation of you (a ‘virtual ego’) which can take on any shape or form as you so wish (Virtual Reality Society). Just like my avatar and me…

My avatar and me going shopping

Now we move from gaming to shopping. How will my avatar help me shopping in the virtual world? It can be done with the help of your online retailer… According to De Mesa, (2009) 2 brands can, by being three-dimensional and interactive, move past the ‘show me’ paradigm of other media and get into the ’touch me’ world of true interaction.

Take for example shopping online for clothing. From the start this was a potential minefield. “The issue of getting the correct size remains a serious drawback for buying clothing and footwear online. Sizes vary from brand to brand, and since you can’t try out the products before buying them, selecting the size is always a gamble”, says Tarun Mittal, YourStory.com.

However, the industry is pouring millions of dollars into developing and trying technological solutions. Augmented reality, avatars and algorithms that approximate your size based on measurements you provide are already in the marketplace (CBC News).

So, my avatar (and me) can now click on an app to select my body shape and click on a piece of clothing I want to try. My avatar will appear in a 3D image wearing the item in the comfort of my own home. That’s really cool, isn’t it!

How can using avatars help retailers?

Just as we are using avatars to ease into the virtual world, so retailers use avatars to target their audience better. They call these avatars personas. Retailers, for example, create personas to help them understand their customers better. “It’s not who comes to your website that is important it is how they behave when they get there that is key to your success”, say Jackson (2009) 3.

Jackson (2009) 3 also suggests when designing personas, retailers should look at a number of different sources of data to define how to get to their role models. These are:

  1. Demographic data – age, gender, geography (data acquired from customer surveys, CRM data or other sources).
  2. Customer psychographics – what the customer does in the pre-purchase phase found by looking at a number of different sources in addition to the demographic data, such as web analytics keyword data.
  3. Market data – such as how the branding and market place effects the decisions of the persona. Web analytics keyword data, Google Trends and data from doing a competitor analyses are good sources of information.

Once a retailer has all the data about her customers, she can create an avatar or persona for customers that are interested in a specific product or product line. Below is an example of a completed buyer persona.

Concluding

The advent of the internet and technological advances thereafter have plunged us all in a new world. It’s a new world with a new economy and new rules – for most an exciting though scary space. By creating avatars and personas, machines and humans can meet on common ground – each wearing a spacesuit to make sense of one another.

Notes:

1Peachey, A. and Childs, M. 2011. Virtual worlds and identity, In: Reinventing ourselves: contemporary concepts of identity in virtual Worlds, 1-12, Springer London.

2De Mesa, A. 2009. Brand Avatar: Translating virtual world branding into real world success, Springer.

3Jackson, S. 2009. Chapter 6: Developing and Measuring Motivational and Behavioural Personas, In: Cult of Analytics: Driving online marketing strategies using web analytics, Routledge.

Images:

  1. slidesharecdn.com
  2. Pixabay

Read also: Chatbots in Retailing – a Fact or a Fad?