by: Hanna Walther

Ecommerce is a constantly shifting market with loads of competition, and not enough room for everyone. E-tailers fight tooth and nail to get their shops and websites ranked high in search results. Nothing comes easy because everyone is doing it, and price quickly becomes king.

The pain points of ecommerce are rampant - however, in this post, we’ll be focusing on the challenges of setting your business apart in the planning, launch, and aftermath of introducing a product into the market. While the challenges of a product launch run the gamut, businesses that exist in highly competitive niches struggle to find their way to reach new customers.

Alternatively, post-launch presents challenges of its own. Pivoting to a new audience, proving product viability, and gauging consumer buy-in are all typical struggles that companies face.

If these sound like current struggles within your business, don’t fret.

There is a highly successful marketing strategy that is worth exploring for ecommerce. Let’s talk about Blue Ocean Strategy.

Differentiate Your Product and Avoid Competition Online with Blue Ocean Strategy

What is Blue Ocean Strategy?

The short summary of blue ocean strategy is that it challenges you to push the boundaries of your market, find new ways to provide value, and offer consumers something that benefits them in a unique way.

In that sense, a blue ocean is comparable to a Unique Selling Proposition (USP). However, finding your blue ocean is about more than just standing out: it’s about challenging the way your product category provides value to customers.

While a USP might have you standing out by offering a health-conscious vegan alternative to a common snack, a blue ocean approach could have you offering custom-mixed snacks based on each customer’s taste preferences and fitness goals, and a custom nutrition plan to go with it.

Blue Ocean Strategy originated as a book published in 2004 by W. Chan Kim and Renée Mauborgne. From the authors, the blue ocean strategy definition is “the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant.”

The authors theorize that in any given market, the system of competition for space and resources is quite brutal. Businesses spend valuable time trying to find innovative ways to compete directly with each other, creating a savage bloodbath.

This is the “red ocean”.

In this setting, time spent away from the actual company and helping it thrive is how the “red ocean” sinks businesses — most can’t survive in such a tumultuous environment. Becoming spread too thin and losing focus, along with financial stress along the way, is a recipe for disaster.

On the flip side, the blue ocean has the exact opposite effect on businesses.

The Blue Ocean is the vast, unknown water that offers bountiful opportunities to anyone bold enough to seek it. Unexplored market space has massive potential, from an entirely new customer base to unlimited profitable growth. All it takes is some refocusing and a pivoted approach to marketing, differentiation of products or services, and some innovation on the business side.

Despite similarities, blue ocean strategy isn’t the same as brand differentiation. The authors point out a couple key differences: first, blue ocean products don’t treat value and price as an “either/or” dilemma. They seek to add value to their offering without needing to raise the price.

When done incorrectly, “organizations inadvertently become either premium competitors or differentiated niche players in the existing industry space, rather than creating value innovation that makes the competition irrelevant.” (Bolding is ours for emphasis.)

For instance, consider how Jeff Bezos created a blue ocean when building Amazon: by eliminating the need for physical bookstores. At the time, being web-focused was huge. Amazon had a huge additional piece of value over any normal bookstore at the time. Anyone who wanted a book but didn’t want to make the trip to the bookstore now had an obvious choice.

Let’s jump in to how the Blue Ocean strategy can lead your ecommerce business into new, exciting, profitable waters.

Blue Ocean Strategy Examples in Ecommerce

Threadless

The online t-shirt business has been saturated for years. Since price and quality tend to go hand in hand with t-shirts, it’s hard to retain customers. Threadless set themselves apart by crowdsourcing their designs, and having customers vote on which design would go to production next.

First, this gave them a community with a ton of unique designs — a great start. It also helped them build brand loyalty, and created a platform for designers to showcase their work while taking a share of the profit (which in turn means those designers are more inclined to promote their t-shirt on threadless, which makes customer acquisition easier).

Death Wish Coffee

While most coffee makers might be tempted to talk about their organic fair trade beans, or their gentle roast for great tasting coffee, Death Wish instead chooses to focus on something else: putting as much caffeine as possible in their coffee.

Calling themselves “the world’s strongest coffee,” their audience is the utilitarian coffee drinker, who might not care much for taste but mostly just needs that caffeine kick in the morning. This not only sets them apart from taste-focused competitors, it also means that anyone trying to target Death Wish’s customer base needs to make significant changes to their coffee making process.

Zappos

Modernizing and emphasizing customer service is deeply integrated in Zappos’ business model. This includes hiring customer service reps who truly value service, providing four weeks of training for employees, anticipating returns, and encouraging customers to order multiple sizes when purchasing so they find their perfect match.

Zappos goes out of their way to differentiate themselves from other retailers by offering what others don’t - exceptional service and experience, every time. To build authentic brand loyalty, retailers must serve their customers in effective, thoughtful ways.

Differentiate Your Product and Avoid Competition Online with Blue Ocean Strategy

In the ecommerce space, the most effective way to grow a profitable business is to market to the right audience, using the most powerful and high ranking keywords, while selling the right product at the right price point. It’s no easy feat, to say the least.

However, with a Blue Ocean strategy in your back pocket, there’s a whole world of opportunity to market to. It starts with finding a niche that is underserved with high demand, and then determining a few ways to differentiate your product from the rest.

How Can I Differentiate My Ecommerce Product?

Your focus with Blue Ocean strategy is simple: You want to avoid your product being compared apples to apples with any competition. When this happens, customers will often compare the most obvious factor: price.

When refocusing the marketing of your product and business, ask yourself this:

“What are some elements of the business that we can leverage or reinvent to create our Blue Ocean? What do we offer — what can we provide — that others aren’t?”

Collectively, the best blue ocean strategy examples are the ones where a business can identify a need in the market, and determine how they can serve their customer base in ways the competition can’t.

That brings us to a few suggestions on ways to help pivot your business from what is typically done, and into something unique and valuable.

Refocus your niche

Refocus what your specialty is. Identify what customers need from you, what they value most, and why they shop at particular stores. This could be anything from easy resolutions with customer service, a generous return policy, price matching, or great company culture.

Knowing what your customers want is powerful, and serving them accordingly will bring major success.

A great example of the power of owning a niche is Nordstrom. Their customer service is unmatched, with a return policy that has gained them lifelong customers. Although Nordstrom is a brick and mortar shop and online retailer, their niche is without a doubt customer service.

Nordstrom advertises their return policy on their website, in their catalogue and in their stores… they are not discrete about it. Why should they be? It’s what keeps the lights on! This brings home the point that the more you emphasize what you’re good at, the happier your customers will be.

Aim for top tier customer service

This one is simple - be the best. Having the best customer service team means hiring the best, even if you have to start small. A whopping 80% of customers are willing to pay more for better customer service. That is a massive opportunity for your business to put an aggressive emphasis on customer service, because doing so means more sales, more customers, and more profit.

How can you identify what makes a great customer service experience?

Take customer feedback seriously. After every purchase made, include a survey on your product packaging inserts asking for each customer’s experience with your business from start to finish. Do your best to implement the feedback where you can.

Remember that consumers are trying to solve a problem. Whether they’re online shopping, booking a reservation, or researching a new product... It’s important to acknowledge they are problem solvers by nature, who often just need support and guidance to make an informed purchase.

How can your business help them do that?

One powerful feature that ecommerce sites are implementing is live chat. Live chat has been a popular use case for other industries, like software, to leverage as the initial touch point with potential customers. For an ecommerce site, it’s a very different use case.

Live chat is useful because it shows customers you respect their time. If they have a question, they don’t have to fill out a form and wait 24 hours to be contacted.

It empowers them to shop confidently, knowing if they have questions, someone can answer them immediately. It’s also another opportunity to ask for feedback about their experience once the chat is complete.

A staggering 46% of customers prefer live chat compared to just 29% for email, and 16% for social media. Get on board with live chat and your sales will skyrocket.

Get real with modern pricing options

While your knee jerk reaction may be to offer the lowest price to stay competitive, this isn’t the answer. Being the cheapest isn’t going to distinguish your brand as the best, so keep that in mind when researching competitors and establishing your pricing. There are many different pricing options for ecommerce shops, and they won’t make or break your conversion rate.

Offering purchase options is a great way to show value to your audience; by presenting options to the customer, you’re giving them more control of how they shop and how much they spend at any given time.

For example, many online retailers, including Amazon, offer a ‘Subscribe and Save’ option where shoppers can sign up to receive a product at the frequency of their choosing (typically monthly) and their first purchase of said product is discounted, anywhere from 5% to 40% off.

There’s incentive to select this option because the first purchase is heavily discounted, and for your business, you’ve automatically gained a repeat customer! Everybody wins.

Another pricing model that offers additional value to customers is the payment plan. Coined ‘Buy now, pay later,’ with this model, customers opt to pay off their bill via installments instead of one cost at the time of checkout.

To a customer, this option is appealing because it allows them to maintain more control of their finances, while still enjoying the shopping experience. It’s a surefire way to gain repeat customers for your business.

Payment plan services include Affirm, Afterpay, Klarna, QuadPay, SplitIt, and many more.

Offer flexible shipping options

Throughout this post, we’ve encouraged you to find where your competitors are weak -- and strive to be great in that space. When it comes to shipping and fulfillment, it’s best to first research what the realistic options are for your business.

While it may not be in your budget yet to begin automatic order fulfillment, you can offer something more by being more flexible with shipping. Big retailers like Amazon and Shopify offer lots of flexible shipping options for sellers and their ecommerce websites.

Explore shipping options so you can sell your products in more areas, at a better price, or even at different speeds. This will help you acquire more customers that you may not have been able to reach otherwise.

Expand your audience

As an online retailer with a particular product, it can be difficult to pivot after product launch and target a new audience in marketing campaigns. From landing pages, sales copy, imagery and design - there are only so many hours in the day to cater to every demographic, even if you want to!

A great recommendation to try is an omnichannel marketing approach by targeting potential and existing customers on different channels, both digital and traditional. Not every consumer is active with brands on social media, or strictly shopping online.

Some prefer postcards or physical coupons in the mail, SMS announcements with offers and discounts, or monthly newsletters with deals. Your content strategy and copy may have to change slightly for each, but the ROI is worth it.

The goal with focused customer expansion is to meet customers where they’re at, not where you want them to be.

Bundling

Putting together items that add value to each other is a great way to expand your offering and set yourself apart. It’s arguable whether bundling can always be defined as a blue ocean, because depending on how you bundle, it can be fairly easy for competitors to replicate. The harder it is for competitors to replicate your offering, the better off you are.

To get a sense for what this might look like, ask yourself what your business does best. What are your strengths that would let you help your customers the most? If you’re a fitness nut and you’re selling fitness products, you could consider bundling your products with a fitness training program. These are two different areas of expertise (manufacturing vs. fitness course creation), which makes it harder for your competitors to copy you.

And that’s the 411 on Blue Ocean Strategy

Implementing the Blue Ocean strategy for your ecommerce business will allow you to become more creative with how you market to customers in any landscape. It’s a launchpad to great success online. We can’t wait to see how you grow.