Connective eCommerce is gaining tons of exposure lately — but also plenty of backlash.
This modern, lean approach to eCommerce blends together several existing models and concepts into something new. And in the ever-changing eCommerce landscape, tighter connection and integration is certainly an attractive idea.
To rise to the challenge of meeting modern consumer expectations, some are turning to connective eCommerce as the solution.
Let’s explore what this concept looks like in action — and how you might use a connective eCommerce strategy to elevate your brand.
Defining Connective eCommerce: What Is It?
Connective eCommerce is an approach to online eCommerce sales that reduces the need for upfront investment by offloading numerous parts of the eCommerce model to connected partners. Web development, inventory, storage, and order fulfillment are all handled by other parties, lessening the administrative load and costs of running an eCommerce business.
Connective eCommerce grew out of dropshipping and third-party logistics as entrepreneurs and small businesses found ways to roll those concepts into a new experience with comparatively low risk and fewer barriers to entry.
Many Amazon sellers are connective eCommerce businesses: They aren’t selling products they make and store, but other products they can acquire at a discount and sell at a profit.
Another example is subscription box services, which (for the most part) don’t maintain inventory storage and rely on others for order fulfillment.
Traditional eCommerce vs. Connective eCommerce
In traditional eCommerce, the seller takes on quite a bit of risk and cost that can be partially avoided in the connective model. That’s not to say that connective eCommerce is better 100% of the time: With greater risk comes a greater chance of greater reward.
Here are a few of the costs and risks involved in traditional eCommerce:
- Inventory and storage costs
- Website design and development costs
- Logistics costs and complexity
- Higher marketing costs
These costs lead to a higher risk of loss, should the launch go poorly. However, connective eCommerce solutions avoid all these direct costs — at the price of all those vendors and partners taking a small slice of the profits.
What Are the Core Elements of Connective eCommerce?
Connective eCommerce can vary widely in appearance (and often, consumers won’t know or care whether an online business uses the model or not). But no matter what the experience looks like, every connective eCommerce business will have at least these core elements.
Any eCommerce business must have a digital storefront from which customers can purchase products, and that’s no different in the connective world.
Businesses can build their online stores from scratch, of course. But that’s almost never the approach in connective eCommerce, where the name of the game is simplification and ease of use.
Instead, most businesses using this model stick to one of many online store platforms. Shopify, WooCommerce, Magento, BigCommerce, and Square are some of the most popular, plus other website builders like Squarespace and Wix have also built out eCommerce templates and modules that are fairly robust.
Choosing the right platform for your business takes a bit of research, but here are a few elements to consider:
- Customization options
- Level of technical knowledge required
- Integrations with other web services
Because connective eCommerce means not keeping your inventory, you’ll rely on suppliers to keep items in stock and deliver them to your customers.
So why do you need an entire supplier directory? Because you typically won’t be able to source your entire store from a single supplier, and as your store grows, you might even need multiple suppliers to keep up with demand for individual products.
Order Management System
An order management system can help connective eCommerce businesses streamline their operations by keeping track of where orders are in the fulfillment pipeline. Because businesses using this model rely on others to fulfill orders, order management can get a little tricky.
Look for an order management system built with outsourced order processing in mind. If you don’t see the term “connective eCommerce,” that isn’t necessarily a dealbreaker. An order management system that can handle third-party logistics (3PL) will typically have what you need.
Even though you’re outsourcing fulfillment, you’ll still need to determine a shipping strategy and select the right partners. Most connective eCommerce businesses will partner with one of the Big Three (UPS, FedEx, DHL) — at least at the beginning — but there are other options as well.
Look for a shipping solution that integrates with the order management system you selected (and that plays nicely with the suppliers you work with).
How Does Connective eCommerce Work?
The connective eCommerce model can be confusing, so let’s break down the main steps involved.
Create Your Online Store
To create your online store, you’ll need a URL that’s on brand, a basic website built using your chosen eCommerce platform, and products to sell. Hopefully, you’ve already got some distinct ideas about the products, but we’ll get back to those in a minute.
As far as building an eCommerce website, you’ll want to use a connective eCommerce platform (any eCommerce platform with prebuilt templates that let you go live quickly and without much technical work) so you can get up and running quickly.
As you decide on a platform, pay attention to how easy (or not) it is to add new products to the store. The more products you offer, the more of a difference this will make.
Add Store Products From a Supplier Directory
This is perhaps the most high-stakes part of the process. To succeed in connective eCommerce, you must select the right mix of products that 1) appeal to your audience and 2) are available to you at a price that allows you to make a profit.
Some products might be perfect fits for your audience but simply can’t be profitable based on the suppliers you have and prevailing market prices. Others might be especially profitable, but not particularly sellable in a given market.
Once you find your starter set of products and add them to your store, it’s time to (hopefully) watch the orders start rolling in.
Forward Orders to the Supplier (Per Order)
As orders come in, you’ll forward them to your suppliers. Remember, you have no inventory on hand, so you can’t fulfill these orders yourself by walking down to your warehouse.
This is where your order management system comes into play, as you need an efficient, accurate way to get orders to the right suppliers right away.
Supplier Ships Directly to Your Customers
Once your supplier receives the order, they fulfill it, shipping products directly to customers on your behalf.
There are pros and cons at this stage. Not having to deal with shipping and order fulfillment is a huge benefit for many new eCommerce businesses. But relying on a supplier to come through (and uphold your brand image every step of the way) is a risk.
Your customers don’t know or care about your suppliers. It’s you they call when something doesn’t go according to plan — even if you’re powerless to fix it.
Shipping options can be complex depending on what you’re selling and how complicated your supplier network is. If you’re just starting out, there’s nothing wrong with relying on your suppliers’ preferred shipping partners.
The Benefits of Using Connective eCommerce
Connective eCommerce can deliver major benefits when used in the right contexts:
Connective eCommerce can help businesses build brand loyalty because it enables brands to scale up product offerings faster than would ever be possible in traditional eCommerce.
By offloading many responsibilities to trusted partners, this model allows businesses to offer a wider range of products, faster shipping, and better customer service.
Higher Conversion Rates
Connective eCommerce typically relies on organic marketing. This approach grows slowly but is extremely inexpensive. It also puts your products in front of right-fit audiences already primed to want what you’re selling.
In these ways, connective eCommerce can help businesses achieve higher conversion rates by targeting the right customers with the right products at the right time.
Video is one extremely powerful way to boost your eCommerce conversion rate optimization. Gander makes it incredibly simple to embed product videos into your eCommerce product pages and leverage shoppable videos across social networks and influencer marketing.
There’s also a ton more flexibility available to businesses using connective eCommerce. Testing out a new product is easier and less risky when you don’t have to pay for inventory upfront (and risk getting stuck with something you can’t sell). Did a new product sell poorly? Simply take it down, and that’s that.
It’s also easier to expand into new markets and scale operations when you don’t have to foot the bill for everything upfront.
Lower Startup Costs
Starting a new retail business is expensive. New online retail eCommerce stores fare a little better since they don’t have to pay for prime retail real estate, but there are still tons of costs.
But in connective eCommerce, businesses have lower startup costs than traditional eCommerce businesses. There’s no inventory investment, no warehousing space needed, and no need to build out shipping infrastructure.
Last, in just about every sense of the term, there’s less risk in connective eCommerce than in traditional eCommerce. Risks that you’ll lessen or avoid entirely include:
- Upfront costs
- Unsold inventory
- Prices changing suddenly (leaving you with inventory you can’t sell profitably)
- Logistics and operational bottlenecks
There’s one area where risks are equal or even a little higher for connective eCommerce: supplier risk. You can’t control what your suppliers do, at least not to the level you could if you managed those functions in-house.
10 Steps for Implementing Connective eCommerce Methods
Considering adding some connective eCommerce approaches to your business? Follow these 10 steps to get started:
1. Choose an eCommerce Platform
The first step in implementing connective eCommerce methods is to choose an eCommerce platform that supports this business model. Shopify isn’t the only option out there, but it’s a solid one trusted by millions of sellers.
2. Create Your Online Store
Next up is creating your online store itself. This includes building out a website (using templates and pre-built elements from your eCommerce platform), deciding on branding and imagery, and then stocking your online store with items for sale.
Make sure your eCommerce site is user-friendly and professional. Here are a few tips toward that end:
- Add product search.
- Offer item filters.
- Organize items in clear, understandable categories.
- Maintain a cohesive brand voice and image throughout the site.
- Create a quick, frictionless checkout process.
3. Research and Find Suppliers
As you select items to sell in your store, you’ll simultaneously need to work to find suppliers for those items. Remember, choosing the right suppliers is vital! And deciding which suppliers are right for you will vary based on your store, budget, and what you’d like to market.
Price is a big factor in most eCommerce businesses — and sometimes, it’s the most important consideration. Offering competitive pricing will attract customers, so be sure to factor in the cost of shipping, the products themselves, and other expenses (including those passed along by your supplier).
Keep in mind that connective eCommerce is not necessarily any less expensive than traditional eCommerce. You’re offloading work, responsibility, and upfront investment — but you’re still paying for the same costs (shipping, warehousing, inventory, etc.). Those costs are baked into your supplier and vendor contracts, but they’re no less real than if you paid for them directly.
In addition to price and costs, you’ll also need to consider supplier reliability. Choosing reliable suppliers who will deliver products on time and in good condition is essential to maintaining your brand image and company reputation.
4. Connect Your Online Store to Your Chosen Suppliers
For connective eCommerce to work as intended, your store must be connected to your vendors and partners. It’s that connection to your suppliers’ systems that powers the whole system, sending order information directly to the right suppliers as soon as the customer completes their part of the transaction.
If you’re using an established platform that supports connective eCommerce (and working with vendors that understand this approach), these connections should be very simple to establish.
5. Set Up Secure, Seamless Payment Processing and Shipping
You’ll also need a way to collect payments and handle shipping. Even though you’re not technically doing the shipping, you’ll handle the shipping charge calculations and collect shipping fees (if any).
There are dozens of payment processing solutions available. The biggest in eCommerce are big for a reason, which is why most stick with Square, Stripe, PayPal, or Shop Pay (for Shopify stores).
Sticking with well-known brands should keep you safe in terms of payment security, too.
6. Start Marketing Your Online Store
Marketing is one of the most important parts of successful connective eCommerce, and it usually looks pretty different than in traditional eCommerce.
In the spirit of keeping upfront investment low, most connective eCommerce sellers start with free and low-cost marketing channels designed to capture organic traffic, such as these:
- Social media marketing
- Search engine optimization (SEO) and content marketing
- Customer testimonials
- Influencer marketing
- Affiliate marketing
- “Own-audience” marketing (for influencers and personalities who already have a following)
- Opt-in email lists
Wherever you already have traction, push harder into those channels with your new eCommerce venture. And if you’re starting from scratch, enlist the help of good-fit personalities who have traction with your target audience.
These methods are a great way to start out, though they don’t tend to deliver massive, overwhelming results. Once your eCommerce store starts to grow, it may be worth exploring paid advertising and digital marketing.
7. Focus on Customer Experience and Customer Service
While customer experience and customer service are essential for any eCommerce business, they’re especially important for connective eCommerce businesses because of how the business model works.
By offloading other eCommerce responsibilities to trusted suppliers and vendors, connective businesses gain the freedom and flexibility to enhance the customer experience. And by elevating customer service and customer experience, your eCommerce business gains a strategic advantage over brands that aren’t doing so.
There are many ways an online brand can improve its customer service and customer experience:
- Create an immersive online experience that makes the online shopping experience easy and fun.
- Provide quick shipping (free if possible).
- Create a customer loyalty program.
- Collect and highlight user-generated content (UGC).
- Employ video content on product pages.
Gander helps businesses create a more connected eCommerce experience through user-generated content and interactive videos. UGC, such as video product reviews, delivers social proof that helps customers make more informed buying decisions, and interactive video content keeps audiences immersed and engaged.
8. Analyze Your Results
eCommerce is a constantly evolving market. Best practices and winning tactics change over time. That’s why tracking your store’s performance and analyzing results over time is vital; it’s the only way to understand overall performance and growth (and to know when to make changes to address degrading performance).
A few metrics to consider tracking:
- Average ticket value
- Customer lifetime value (CLV)
- Cart abandonment rate
- Click-through rate (CTR)
- Time on page/bounce rate
9. Emphasize Post-Purchase Engagement
As a digital brand, you strive to do more than simply sell products to people. You want to engage those people with your brand, mission, or cause — and you want to keep them engaged long after the purchase.
Email lists are a great way to do post-purchase engagement (since in eCommerce workflows, you’ve probably already collected an email address for every customer). Work those connections by providing exclusive promotions and discounts for loyal customers or previous buyers.
One more tip: If you’re selling consumable items, try reaching out when it’s time to buy again.
10. Scale Your Business
Once you iterate on the previous nine points and see steady success, it’s time to scale your business. If organic marketing has brought you this far, perhaps it’s time to add in paid digital marketing. If you’ve maintained a relatively narrow product catalog, now’s the time to grow it. Or, if you’re operating in limited markets, it could be time to open your digital doors to new regions.
Work with Gander To Grow Your New Connective eCommerce Venture
Connective eCommerce is a promising approach to eCommerce, but it’s not a silver bullet. It still takes hard work, careful planning, and keen market insights. It also requires viewer engagement and faces some of the same challenges around the tactile experience that traditional eCommerce vendors face.
Gander is the perfect solution for introducing interactive product videos to your eCommerce store. These videos can demonstrate your products in a way that text and photo product descriptions can’t. They also provide social proof and introduce interactivity that you thought only the biggest brands could afford.
Ready to see how Gander can transform your eCommerce store? Request your Gander demo now!