MP spoke with Ryan Lee, founder and CEO of Nautical Commerce. Nautical is a technology platform that enables businesses and startups to increase revenues and customer reach by quickly launching and scaling their online marketplace. Before founding Nautical, Lee worked in digital transformation for some of the largest companies in the world. He helped launch Apple Pay internationally while at Apple, worked at Visa, was the Chief Product Officer at a fintech serving Fortune 500 companies, and led the payments strategy at a logistics startup. Nautical’s marketplace platform was born from his experience working in commerce, fintech, and logistics and seeing how inaccessible marketplace technology is – even to large enterprises.
Where do most eCommerce entrepreneurs go wrong from the beginning, and why?
First and foremost, eCommerce entrepreneurs have to understand their customers.
Their job is ultimately to grow demand on their site.
Once they understand what their buyers want and can get in front of their target audience, they will get more traffic, enabling them to learn more and lean into the products and services their buyers are looking for.
At the end of the day, their product is secondary to what buyers want.
Google offers a tool called Google Trends, where users can see what people are searching for. This tool is a great way for eCommerce entrepreneurs to learn about their specific business model.
They need to go out, research, and find out specifically what buyers are searching for.
That’s one way they can get good data validation without surveying prospective customers.
What are three mistakes entrepreneurs make when choosing a platform for their eCommerce business, and how can these mistakes be avoided?
1. They Fail To Understand Their Platform Choices’ Total Cost of Ownership Tradeoffs
While one platform might be super easy to set up, it may hit a hard limit relatively quickly when they begin to scale.
At that point, many eCommerce businesses hire headcount to make up for the platform limitations. Unfortunately, this mistake isn’t something an eCommerce entrepreneur will figure out until they run on that platform.
They need to consider what their business will look like 2-3 years from now.
2. They Also Look at the Price of the Platform at a Surface Level
This relates to understanding the total cost of ownership but is less about the people and process and more about overall platform cost.
Some platforms try to get entrepreneurs in at a very low monthly rate but gate access to many necessary capabilities.
When they’re done adding the needed features, they may be paying thousands over what they budgeted for.
3. They Also Think They Can Build an eCommerce Platform Themselves
These entrepreneurs may believe their business idea is too unique for any platform to fulfill their needs. Instead of leveraging existing technology to get much of their underlying technology, they build it all from scratch.
Remember, eCommerce platforms are complicated systems that include catalogs, information, order, inventory, and more.
Some eCommerce businesses require many integrations. What are some of the oversights entrepreneurs commonly make when considering integrations for their eCommerce business, and how can these mistakes be avoided?
Ecommerce entrepreneurs need to understand the complexity of integrating relative to the value they extract from that integration.
The truth is, they are never going to get to full automation.
Instead, I believe they should be following the 80/20 rule regarding platforms and technology. Can the technology get them 80% of the way there and then close the gap on the 20% with custom development or internal processes?
Automation is very expensive, so going for 80% - 90% will cost a lot of money.
Then going from 90% to just 92% will cost even more.
Ultimately, they have to balance their back office processes with technology optimization.
One of the biggest challenges eCommerce businesses face is developing a website that is easy to navigate. What steps should be taken to ensure one’s eCommerce website is easy to navigate, and why?
1. The Company Needs To Focus on Removing the Friction of Buying
One of the keys to increasing conversion online is selecting a mobile-friendly technology. Many websites can’t do business on a mobile phone, yet over 70% of B2C commerce purchases happened on mobile phones following the onset of the pandemic. (1)
2. They Need To Leverage a Platform That Can Streamline Their Checkout
One of the biggest reasons that customers abandon websites is frustration with the checkout experience.
With modern payment platforms like Braintree and Stripe, eCommerce businesses can leverage one-click checkouts, whether Google Pay, Apple Pay, or a Buy Now Pay Later offering like Klarna.
They need to give their customers a choice in their checkout experience.
3. Navigability on an eCommerce Site Comes Down to Searchability
How searchable is their site?
How quickly can their customers find what they’re looking for? Think about the ways they are tagging their products into different categories.
When choosing an eCommerce platform, ensure it offers flexibility in the search function.
How should eCommerce businesses consider speed and performance part of their customer experience, and why?
Speed and performance are critical.
Amazon discovered that with each 100-millisecond delay, they lost millions of dollars. (2) Smaller companies aren’t going to see that large of an impact but should still optimize for fast load times.
They need to be cognizant of image optimization to ensure they’re not doing things like sending a 10MB image file over a mobile device.
Google has created a tool called Lighthouse that gives great feedback on ways to improve a site's speed.
How important is the utilization of programmatic and automatic ads designed to retarget customers across platforms, and why?
Retargeting has become much more challenging because of iOS 14 privacy updates.
A company used to be able to figure out the origin of the customer and additional details, but that is no longer the case.
They’ve made it incredibly hard to figure out where that’s coming from and sometimes routing through data centers that deliver incorrect information.
Because of these privacy changes, eCommerce businesses must be more diligent to find their target customers.
They can search for customers in smaller communities on Facebook or Reddit.
Marketplaces also serve as a great channel to find customers because they are ready to purchase at the bottom of the funnel.
They don’t have to go through that buying journey of discovery, interest, and checkout.
How should eCommerce businesses implement email marketing into their strategy, and why?
Email marketing is still very effective.
We are all overwhelmed with many emails, and nowadays even text messages, from businesses. But when an email is sent from a brand you have an affinity for, it can cut through the noise and serve as a relationship builder with customers.
They should use email as a relationship builder to serve useful and relevant content to their customers.
Topic Contributors
- Matt Hudson, eCommerce Consultant at BILDIT
- Bob Bilbruck, CEO at Captjur
Responses provided by Ryan Lee, founder and CEO of Nautical Commerce.
