7 Challenges to Plan for When Scaling a Multi-Million Dollar Ecommerce Store

December 2, 2021
by
Shogun

7 Challenges to Plan for When Scaling a Multi-Million Dollar Ecommerce Store

December 2, 2021
by
Shogun
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Your brand is scaling rapidly, but are you prepared to face the challenges that arise as your store transitions away from small-business status?

What should you prepare for when your direct to consumer business enters the big leagues?

According to David Schripsema, Director of Retail Technology at Digital Agency Assemble, if you have $20mm in ARR with the last two years over 20% growth, you aren’t a small business anymore—and should prepare for the new challenges you’re about to face.

With this in mind, we talked with experts from our trusted partner agencies about the challenges they see with the scaling ecommerce brands they help daily and how you can avoid certain pitfalls as you grow.

Here’s what our partners say you should anticipate to glide effortlessly into the next phase.

#cta-visual-fe#<cta-title>Web Performance that Scales with your Customer Base<cta-title> Shogun Frontend gives your site the speed and flexibility you need to scale your ecommerce business. See more

1) Handling multiple marketing channels efficiently

Rapidly scaling ecommerce or omnichannel retailers often struggle to find a cost and time-effective way to handle all the different aspects of marketing. 

Generally, small ecommerce startups have leaner marketing teams and manual marketing activities—like posting to social media—can prevent brands from taking on other important tasks. As your brand scales, you’ll have more marketing work—but often the same staff—increasing the difficulty.

Start considering enterprise-level automation (or outsourcing)

As you start feeling this pain point, it can be time to look at enterprise-level software solutions—or ones that can support broader needs. These types of tools—think Klaviyo—often have options for automating the tedious parts of marketing for sending email sequences, for example, or Buffer for posting regular social media updates. Thanks to a range of features and levels of pricing, these platforms can be used while you’re a small business and adapt to your now scaling status.

Though our experts warn: be sure to avoid the ad-hoc approach when looking at new software. That is, getting the exact tool needed for just one isolated problem you’re having at the time.

According to Piyush Lathiya, the CEO of Aureate Labs:

“[a common mistake growing brands make] is not planning for future growth and expansion before investing in technology.”

This could be choosing a marketing software that doesn’t scale with larger brands, for instance, or continuing to use a traditional ecommerce website platform alone when you’ve outgrown its standalone capabilities.

Outside of software (which still needs to be used by someone on your staffed-up team), you can completely free your internal team of tasks like email marketing and social media altogether by looking at outsourcing these activities to an agency. This route can keep your employee count lean and give your marketing the help needed to thrive as you scale your efforts. However, full support like this is often the most costly route.

2) Supporting rapidly growing demand for customer care

One of the first things you’ll likely notice as your store expands is more shoppers needing customer support—likely through more than one channel. And scaling multiple customer support channels becomes the challenge.

You might already be using customer service software, but with more customers come more requests. And, folks will begin reaching out on new channels, so you need to account for each, responding fast to keep shoppers happy and returning.

Lean into effective customer service software to expand

As you prepare to scale, consider using software that aggregates all customer service requests—whether from email, social media, or web chat—into one easily manageable backend view. Using customer service software that matches your growth stage lets customers reach out on any channel they prefer without customer support needing to monitor each channel individually.

Though it might seem tempting to restrict customer support to just one channel, forcing customers to get help in only one way can alienate people. In fact, 20% of customers prefer email support, while 42% prefer phone, and 38% prefer digital channels like a chatbot or social.

Overall, make sure your chosen software supports easy add-ons for new channels and new customer support specialists. Take a look at customer support software like Gorgias, Zendesk, or VHT to find the perfect solution for you.

3) Differentiating your brand with a unique UI design

Failing to create a memorable shopping experience makes it unlikely you’ll compete against the 12-24 million ecommerce stores out there.

To become a household name requires your brand to stand out in a way others selling the same thing don't. According to our agency expert Lathiya:

“I found when [our] customers grow to more than 1M+ revenue by default, they want to improve Theme/CX.”

Improving your ecommerce site is a prime way to offer the type of online shopping experience visitors are expecting as the bar for direct-to-consumers stores continues to rise.

Create a custom store that highlights your brand while remaining flexible to change

You have a few options to choose from when differentiating your ecommerce site. Some will be better for branding than others, and each has drawbacks.

Free-to-use themes are a little cookie-cutter by nature; so that as many brands as possible can use them—and using these means you won’t stand out. On the other hand, fully coded Liquid sites can be difficult to change (think: adding new products, new verticals, or even flash sales) without a lot of development. So while you might stand out via piecemeal customizations, they aren’t always efficient changes, causing a whole new set of issues to overcome.

Another option to look at when you’re scaling (especially if differentiation is important to how you tell your brand’s story) is headless commerce. A flexible frontend paired with your existing backend from Shopify or BigCommerce can unlock entirely new design capabilities without tradeoffs to site performance. And, as a bonus, brands that go headless see an increase in site speed and conversion.

#cta-visual-fe#<cta-title>See examples of brands going headless<cta-title>Check out how scaling omnichannel brands like TULA and Daring Foods are taking growth to the next level. Read more

4) Creating and distributing content

Take a moment to look up your favorite direct-to-consumer ecommerce store and scroll to the site’s footer. You’ll likely find that while the store is teeming with promotions, special offers, and popups to get free shipping, what’s often missing is a blog or owned content destination.

Worthwhile content creation that contributes to store growth via acquisition takes countless hours of time planning, researching, writing, and publishing—without upfront reward. Until starting to scale rapidly, many brands focus on the promotions side of marketing, sales, and product development, not the content on the site or expanding into owned formats. And, as they scale, creating and distributing content at scale gets even harder—making it harder again to begin focusing on content.

One big reason ecommerce businesses don't always focus on content for acquisition is that this channel doesn't always supply the same upfront ROI seen with new product launches or spending directly on paid ads.

Create a thoughtful content strategy with your marketing and sales teams

Get ahead of your competitors by creating a cohesive content strategy focusing on important marketing and sales dates. An example of this in action is the Stikwood Workbench.

We love how the top of their blog page features actionable how-to guides—great for attracting potential customers.

Stikwood is a highly successful direct to consumer decor brand that shows how a blog can be useful for acquisition. They provide value first (how to’s), then inform the reader of products they might like to buy as a secondary goal. When you create content like this, you have the potential to make future and current customers happy and rank higher in search, too.

#cta-paragraph-fe#Remember to include your sales and marketing teams in your content strategy. If you publish without a plan, you risk misunderstanding your audience and wasting time providing content they don’t want. Similarly, if you don’t talk with your sales and marketing teams, you could lose opportunities to push upcoming sales or product launches in your content.

#cta-visual-fe#<cta-title>Web Performance that Scales with your Customer Base<cta-title> Shogun Frontend gives your site the speed and flexibility you need to scale your ecommerce business. See more

5) Maxing out your team's bandwidth

Scaling ecommerce brands cannot manually manage all their tech problems, SKU updates, or infrastructure perfectly while maintaining a lean business structure.

Many small and scaling ecommerce brands save by maintaining a leaner team. Rather than have one person or team for each function of ecommerce (sales, marketing, technology, customer service), it’s common to group functions together (i.e., sales and marketing with one person). Because of this, brands approaching multi-million dollar sales often don’t have the experts or time needed to handle complex and time-consuming issues that arise.

Make strategic changes in bandwidth to make room for more important tasks

We asked Jason Kohn, Head of Revenue at Assemble, the biggest mistake he sees growing businesses make when looking to overcome this challenge. He said, “thinking too much about bandaid fixes and not enough about solutions [you] can grow off of for many years to come.” For example, hiring one person or buying one program to fix a growing number of technology and product issues might seem like an easy fix. But it could lead to burnout or wasted revenue.

According to Kohn:

“[Assemble is] focusing on three core buckets of solutions. 1) Replatform to headless. (That’s the foundation). 2) Get your data and analytics in order. This is necessary to make good data-driven growth decisions. And 3) Process automation. Don’t do anything on excel spreadsheets anymore.”

Khon explains, going headless can solve many of the limitations scaling businesses encounter and opens up flexibility. From there, your brand can automate everything mundane and time-consuming to truly scale store operations.

Lastly, it’s critical to set up more sophisticated data for things like customer support tickets or shopping analytics to better inform your decision-making and further reduce the load on your team.

6) Using an older tech stack

Traditional software solutions for content, product, and website management are great for new and launching brands. However, as your brand scales, they can constrain your growth. Aziz Memon, Partner and Head of Brand & Customer Experience at Tidal Commerce, told us about a few challenges that tend to stem from older technology:

  • Spending more time fixing [your website or other technology] than selling
  • Doing tasks manually that can easily be automated
  • Difficulty expanding to channels [like new social platforms or new websites]
  • Duplication of effort [due to failure to save and other technology sync issues]
  • Inability to experiment [a/b test your emails, website, and more]

This is a challenge because you're using the same technology that worked when you were a startup. So, it can be easy to miss the warning signs you’ve outgrown it.

Move to and build upon a tech stack that works without patching

Your tech stack should change as you scale your business. What worked for you when you had five customers and no budget won’t work when you have 100,000 customers. That’s why it’s important to avoid the sunk cost fallacy.

#cta-paragraph-fe#The sunk cost fallacy is the aversion to moving to a new tech stack because you’ve invested so much money into the technology you’re currently using.

Memon says that staying married to legacy infrastructure by taking a fix-it approach might seem cheaper; however, the costs will add up when changes need to be made.

When choosing what platform is best for your needs, keep in mind the speed at which you’re scaling, your industry, your current and future needs, and your budget. Ideally, you’ll find solutions that work both now and for a long time as you continue to grow. For example, sending emails manually might have worked when you had ten customers. But, using Mailchimp will work for automation no matter how many emails you send per month.

7) Expanding across borders

Finally, our experts named internationalization as a challenge brands face at the multi-million dollar revenue mark. Ecommerce expansion into other countries often requires creating entirely separate stores. And traditional ecommerce solutions can make managing multiple storefronts complex.

Sezane, a French-based clothing company, is a perfect example of internationalization and the support of a multi-currency checkout.

As your brand scales and looks to take its products overseas, traditional ecommerce platforms give you two options:

  1. Use the same website regardless of country of origin
  2. Create a completely new account

The problem with both of these options is they end up being complicated and prone to error. If you have two CMSs, then you have to update them both each time. If you have one site, then you can't run unique sales by region/country or use different languages.

Plan for future expansion and consider headless commerce

The key to successful expansion and planning is avoiding quick decisions and consulting data first. According to Lathiya:

“We found our top-performing clients are very emotion-driven. They make quick decisions to make changes on the website without performing a deep check and impact analysis.” For example, you need to launch your products in a new country soon, so you create a completely new Shopify account. But now, you have two separate accounts you have to keep updated all the time—and double the costs.

One potential solution to cross-border expansion is headless commerce. With a separate, flexible frontend solution, your brand can open up the possibility to more easily host multiple ecommerce sites or expand to internationalization or currencies.

Overall, it’s certainly much easier to plot your store’s world takeover when the back and front end of your store aren’t fused together.

#cta-visual-fe#<cta-title>Web Performance that Scales with your Customer Base<cta-title> Shogun Frontend gives your site the speed and flexibility you need to scale your ecommerce business. See more

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