POD: How to gain competitive advantage in a cluttered ecommerce market-

The Indian e-commerce scene has seen a meteoric rise. From a meagre $2.5 Bn in 2009, the number was an unbelievable $14 Bn in 2012. New players have come in and continue coming in everyday, buoyed by an increasing consumer demand and growing confidence in the online shopping model. Apparel seems to be the darling of the e-commerce players with every major player trying to ride on the success of the category online. 

With everything (and everyone) available online, how does a player differentiate itself from another with products/brands/offerings remaining essentially the same. The POD framework tries to answer this question using classic marketing success levers slightly tweaked to make it relevant in the e-commerce space. The model has one (or two) major assumptions. 

a. People can find you when they are looking for. You are visible to them and have a good recall.

b. You offer a decent user experience.

Using advertising and a good UI, any e-comm player can take care of the two challenges stated above. However, there still is a lack of brand loyalty in this space with the consumer trust yet to be established. In this scenario, how does a player now differentiate itself from others?

Lets examine the POD framework-

1. P-  Price-

Need I say more? The online consumer is smart and knows how to get the best bargains. She will check out all the possible websites where the product of her choice is listed and will go after the lowest price. Make no mistakes about that. Lately, there have been a lot of comparison shopping websites who aggregate listings from multiple players and lists the price for any product you search. The consumer will ALWAYS chose the least priced product (we will look at possible exceptions later). The price has to be competitive and should always be smart enough to adjust to market trends.

2. O-  Offers-

In a cluttered market scenario, the consumer has choices at all possible places. Its all about which choice sounds the most attractive. You have to make it sweet- throw in coupons, loyalty bonuses, discounts, freebies, anything that suits you. Remember, the consumer needs to believe that she is getting the best deal online from your website which no other player can offer. Offers not only let you lure consumers away from other online players but also from traditional retail markets. However, you might have to bear in mind to strike a balance so that your brand image is protected and not seen as a discount brand.

3. D- Delivery-

Alright. The consumer has found you, likes your price, delighted by your offers and is ready with her wallet open. Don't lose her now. Delivery is as important as any other element in this framework. While Cash On Delivery is a norm so we will not discuss it, its the delivery time which is very very important. The consumer is willing to wait to get her product but the wait cannot be insane. Anything beyond 4-5 working days and there is a high chance that the consumer will be lured away by competition. Longer delivery waits also lead to lack of acceptance for products on cash on delivery as it gives extra time to consumers to change her mind or find another bargain in the meantime. The mantra here is faster the better.

This explains the POD framework. Any player in the e-comm industry can win by establishing winning position in at least 2 out of these 3 elements. Anything less than that is setting oneself for a failure.

Cheers!

Abhishek