We don’t need to tell you that the e-commerce industry is booming (but we just did).

Despite Amazon’s department-store-style monopoly in the online retail landscape, there remain incredible opportunities in the online biz – particularly with branded, niche offerings.

How Much Has E-Commerce Grown?

Let’s put it this way: if e-commerce were a country, it would be the third largest nation in the world (and Amazon would be Texas).

The COVID pandemic alone accelerated the e-comm industry exponentially, where we saw 10 years of predicted growth in 3 short months.

This is mind-blowing! (Lots and lots of people are shopping online.)

Scaling Your Online Sales

If you have an online store or are planning to start one, there are several important details to consider as you launch or scale your business.

The very first priority in building and scaling your online business is establishing where you are today and where you are headed tomorrow.

As the infamous Henry A. Kissinger once said, “If you do not know where you are going, every road will get you nowhere.”

So let’s begin with a roadmap.

The 5 Stages of E-Commerce Growth

After years of conversations with online business owners who struggled to articulate the development stage of their stores, we came up with tiers to provide descriptive intel for each phase of e-commerce business evolution.

graphic of the 5 stages of e-commerce growth

This handy framework can help you identify the size of your business, common obstacles, and next steps for growing and scaling.

1. Nothing

This is fairly self-explanatory. You are in the early development phase: picking out a product, pinpointing your audience, building an online platform, etc.

At this stage in the game, you’re not selling anything. It’s mostly strategy and planning.

2. Vending Machine

As the title suggests, this stage involves very little fanfare.

Imagine picking a snack from a vending machine: you take stock of inventory, type in your number choice, insert some cash, and your treat is delivered on the spot.

There’s no one standing next to the machine asking what you’re hungry for or if you need a table for two.

In this early stage of progress, your business might have a handful of products, with a few variations of each.

For instance, a coffee company might have four varieties of coffee, with two size options and four grind choices for each.

A customer can choose quickly and efficiently without interacting with a human. Four clicks and their coffee is on its way!

Most online stores fall in the category of vending machines until they’ve hit enough sales to start hiring and growing their operation.

3. Farm Stand

Envision driving down a country road somewhere in middle America, and happening upon an old-school farm stand.

It’s the middle of summer, so there are loads of fruits and veggies: tomatoes, cantaloupes, sweet corn, you name it.

Now, this same stand will likely have completely different offerings come September and late spring.

Regardless of the season, however, there is a helpful attendant on duty (likely the owner of the farm), eager to tell you about the most delicious choices and what to expect next week.

This person may even know you by name.

In the farm stand phase, your business has more variety, more options, and perhaps even seasonal inventory (think boots in autumn and sandals in spring).

There’s more human interaction, perhaps with a handful of people dedicated to customer service – making sure orders arrive on time, checking in on experience, and asking for reviews.

Ideally, there’s also more of a brand presence, a little more personality to showcase, and a better structured platform to help customers browse, navigate, and decide what’s right for them.

Maybe you even share your organization’s story to entice people to return for more purchases (even if your product costs a little more than a mega-store selling at scale).

4. Brand Store

Think Williams Sonoma, Apple, and Lululemon.

People head to these places to buy a specific item (or selection of items): a charcuterie board, bluetooth headphones, or $200 yoga pants.

They offer many products, but specific to their niche: cookware, technology, and workout apparel.

There is almost always someone there to greet you at the door, offer help, answer questions, and create an enjoyable shopping experience.

In the e-commerce world, it’s no different.

This is Zappos’ legendary customer service and lenient return policies.

Or companies like Warby Parker where you can take an online style quiz or – after you receive a chosen set of glasses to try on at home – you can upload photos of yourself wearing them and an online stylist will help you decide which ones to buy.

This is where most online stores find their sweet spot: focusing on products that fall under the same brand.

The trick here is to offer this same level of customer care and interaction that a person would receive upon walking through the doors of an actual store.

5. Department Store

This is your standard Walmart or Target experience.

In this stage of the game, you have tons of products with very little human-to-human contact.

In fact, you might find yourself wandering around in circles in search of a few items, and – if you’re one of the lucky ones – you might just find a rare employee ready to lead the way.

You get what you came for at a good price, but there was likely no relational connection (and maybe some frustrating experiences) involved.

In the online realm, this is your Amazon or Walmart.com, and we rarely come across companies with the ambition to try and compete with these goliaths.

The size and scale to compete with Amazon is… well, Amazonian.

While these organizations are world-leading at satisfying demand, they tend to focus less resources on driving demand.

With brand recognition, pricing, and distribution already fully at scale, people know to look here first.

The Importance of Scaling Through Human Connection

Regardless of our reliance on technology and our social-media influenced world, people still – at their very core – long for human connection.

That’s why automated answering systems and internet tech bots are so frustrating.

We want the real deal: a living, breathing, empathetic, helpful human that can listen to our needs, understand our pain, and guide us towards a good decision.

This is the missing link in many e-commerce businesses, and a valuable experience to tap into that will set you apart in the industry by simply saying, “We might sell pet rocks, but we still sincerely care about human connections. We care about you.”

Drive Growth through Two Spheres of Influence

There are two ways to facilitate e-commerce growth at scale: investments in technology, and investments in relationships.

Two sphere of e-commerce influence graphic

These two spheres of e-commerce are too often separated.

Most organizations have different staff, meetings, conversations, and goals devoted to each of these domains.

If you want true e-commerce evolution, overlapping these two elements is the key to long-term value and success for your e-commerce business.

Even at scale, there’s room for technology to strengthen the human connection, rather than replace it.

E-commerce companies can win by offering more interactive, conversational, and real-life-human exchanges.

You can do this by:

  • Creating memories (versus just selling objects)
  • Starting a relationship (instead of milking your customers for money)
  • Making an easy-to-use platform, where the customer can’t fail (versus one that “works”)
  • Providing true value to customers (instead of simply grabbing their data)
  • Personalizing curation (rather than bombarding customers with access to everything under the sun)

Some of the most common mistakes made by stores are along these very lines:

Regardless of where your e-commerce company is on the map – whether you’re starting with nothing or with a fully-blown brand store – a relationship is worth far more than a sale.

Real connection makes you memorable.

This is what will keep your customers coming back for more. And it’s why they’ll tell their friends to shop with you, too.

At the end of the day, remember that you are in the business of humans, and humans want relationships, not just products.

They want to be a part of a bigger story that involves other humans, and you get to tell that story.

Looking to grow your online sales? Learn more about Magneti’s approach to e-commerce evolution >>

Magneti aims to be the most effective and innovative growth marketing team in Colorado.