Basic Strategies for Shopify (Our Own E-commerce Site)
What is an owned EC site?
An owned EC site refers to an EC site where you acquire your own domain and build and operate the site yourself. It's a model where you have your own independent online store, rather than opening a shop on a marketplace like Rakuten or Amazon.
Shopify is a platform for building such owned EC sites. Shopify handles the technical aspects such as server setup and security measures, allowing store operators to focus on selling products.
Differences from marketplace EC
EC sites are broadly divided into two types: "marketplace type" and "owned EC type."
Marketplace EC (Rakuten, Amazon, etc.)
- The marketplace itself has a strong customer draw, so a certain amount of traffic can be expected by opening a store.
- High sales commission (around 10-15% of sales)
- Customer data is managed by the marketplace, making it difficult to utilize.
- Must comply with marketplace rules.
Owned EC (Shopify, etc.)
- Must attract customers independently.
- Low sales commission (only payment processing fees in the case of Shopify).
- Can manage and utilize customer data independently.
- Can freely decide on site design and strategies.
A marketplace is like "opening a store in a busy shopping mall," while an owned EC is like "setting up your own store on a street."
Strengths and weaknesses of owned EC
Strengths
| Item | Description |
|---|---|
| Flexibility in branding | You have complete control over site design, brand aesthetic, and customer experience. While stores on marketplaces often look similar to others, owned EC allows you to fully express your brand's unique identity. |
| Direct relationship building with customers | You can manage customers' email addresses and purchase history yourself, allowing for free use of email marketing and repeat customer strategies. |
| Higher profit margin | Without the high commissions of marketplaces, a larger profit remains in your hands for the same amount of sales. |
Weaknesses
| Item | Description |
|---|---|
| Difficulty in attracting customers | Without the existing customer draw of a marketplace, you need to attract traffic yourself. This is the biggest challenge for owned EC. |
| Requires technical knowledge | If you operate an owned EC site in-house, basic knowledge of HTML/CSS is required. This is necessary for adjusting product pages, modifying designs, editing email templates, and many other situations. Furthermore, for Shopify, understanding Liquid, Shopify's unique templating language, is also required for theme customization. If you cannot handle it yourself, finding a reliable external partner is an important option for successful operation. It is also a valid strategy to entrust technical aspects to a partner and focus on product development and customer service. |
Basic strategy (access edition)
Common mistakes
When explaining EC sales, the following formula is often used:
Sales = Number of accesses × CVR (conversion rate) × Average order value
While this formula itself is not wrong, taking it at face value will lead to failure. This is because it lumps "access" and "CVR" together.
There are 4 types of access
Marketplaces also provide new/returning customer metrics, but the definitions and granularity vary by service and feature, making it difficult to directly apply them to strategy design.
People accustomed to marketplace operations tend to think of access as a single entity. For owned EC, this lack of perspective can be fatal. This is a basic point, but if you proceed without understanding it, you will continue to struggle.
Access can be classified along two axes: "purchase history" and "number of visits."
| Type | Description | CVR |
|---|---|---|
| New first-time visitor | These are people visiting the site for the first time. They know nothing about your store. | Lowest |
| New returning visitor | These are people who have seen the site before but haven't purchased yet. This is the "consideration period." They are returning because they are interested. | Low |
| Existing customer first-time visitor | These are people who have purchased in the past and are returning for the first time after their purchase. A relationship of trust has already been established. | High |
| Existing customer returning visitor | These are people who have purchased in the past and are visiting multiple times. These are repeat customers. | Highest |
Why categorize them?
If you lump the four types of access together, it becomes impossible to identify where the problem lies.
For example, if you feel that the "CVR is low," what is the cause? Is the CVR low for new first-time visitors, new returning visitors, or existing customers? The causes and countermeasures for each are completely different.
For new first-time visitors, strategies to "build trust" are necessary. For new returning visitors, strategies to "give them a push" are needed. For existing customers, strategies to make them "want to buy again" are needed.
By thinking about it in this categorized way, you can finally implement effective countermeasures.
However, accurately measuring and distinguishing these four types is not easy. GA4 and Shopify's standard functions have limitations, and ingenuity is required. This is where the operator's skill comes into play, and it's a point where daily strategies make a difference.
Methods for acquiring traffic for owned EC
There are mainly three ways to acquire traffic for an owned EC site:
Branding (direct search)
This method aims for customers to search directly for your store name or product name. However, this only works if you have brand recognition.
SEO
This method aims for organic traffic from search engines. It takes time to see results, and there is a lot of competition, so it's difficult to achieve immediate success.
Advertising
This method utilizes Google Ads, Meta Ads (Facebook/Instagram), TikTok Ads, and others.
Most stores lack brand recognition, so direct searches cannot be expected. SEO also takes time. Therefore, many stores start with advertising.
Strategy based on advertising
When running ads, the four-category perspective mentioned earlier becomes extremely important.
People who visit your site through ads are "new first-time visitors." At this stage, the CVR is the lowest, so in most cases, they won't make a purchase on their first visit.
However, interested individuals will visit again later. This is a "new returning visitor," and it's the consideration period. At this stage, the CVR will be higher than for new first-time visitors.
ROAS (Return on Ad Spend) is a metric used to measure ad effectiveness, but judging it solely by new first-time visitors will lead to an incorrect evaluation. You need to consider customers who eventually purchase after a consideration period.
Without this perspective, you might prematurely conclude that "ads aren't generating sales," and miss out on potential customers you could have acquired.
Basic strategy (CVR edition)
Crucial difference from marketplaces
When considering the CVR of an owned EC site, it is essential to understand the crucial difference from marketplace types.
People who shop on Rakuten or Amazon have already registered as members and have their payment information saved. Therefore, the barrier to purchase is very low.
On the other hand, for an owned EC site, it's a "site they're seeing for the first time" for visitors. They need to enter personal information and payment details, and many people drop off at this point.
Shopify allows guest purchases (purchases without member registration), but the standard checkout screen does not have a clear pathway for it. While it's possible to buy without logging in, there isn't a dedicated "guest purchase" button.
Therefore, it's important to design the UI/UX by providing a page explaining how to purchase, or by clearly presenting options for guest purchase, member registration, and login on the cart page.
Note that Shopify is an overseas platform, and the concept of "guest purchase" itself is not widely emphasized in English-speaking countries. In Japan, the culture of marketplaces like Rakuten is deeply rooted, so there is strong resistance to member registration. It is necessary to design the UI with this cultural difference in mind.
To overcome this hurdle, the following two factors are important:
Is it trustworthy?
Entering personal information on a site you're seeing for the first time can cause anxiety. To alleviate this anxiety, the following elements are important:
- Notation based on the Act on Specified Commercial Transactions / Contact window: Whether legally required information is properly stated and if there's a contact window in case something happens is fundamental to trustworthiness.
- About shipping: Whether shipping days and costs are clearly stated. If it's unclear "when it will arrive" or "how much shipping will cost," customers won't commit to a purchase.
- Payment method options: The more options available, such as convenience store payment or carrier payment in addition to credit cards, the lower the barrier to purchase.
- Page speed: A slow-loading site alone can create distrust. While a technical issue, it directly impacts CVR.
- Security: Visitors don't realize that Shopify is the world's largest e-commerce platform. Entering credit card information on a site they're seeing for the first time can be unsettling. Stating "Protected by SSL encryption" on the cart page or in the footer can provide reassurance.
- Reviews: Feedback from other buyers is a powerful tool for building trust.
Is it a good deal?
A store that doesn't offer discounts is out of the question.
If you think, "My products have high added value, so I won't discount them," rethink that. If they truly had that much added value, direct searches would already be happening. The absence of direct searches means that the added value from the customer's perspective is not that high.
Even marketplaces create a sense of good value with points and coupon campaigns. These campaigns, which Rakuten and Amazon bear the cost for, must be handled by you on your own EC site. Unless you offer equivalent or better discounts, there's no reason for customers to go through the trouble of registering as a member to buy.
Shopify's checkout screen natively displays a discount code input field. This means Shopify itself is designed with discounts in mind. If you don't utilize this, you're not fully leveraging Shopify's design philosophy.
If you only focus on attracting customers without considering these two points, your CVR will not increase.
Summary
Owned EC sites offer greater freedom and better profit margins compared to marketplace models, but they come with hurdles in customer acquisition and technical aspects.
The most important basic strategy is not to lump access and CVR together.
- Divide access into four types: "new first-time visitor," "new returning visitor," "existing customer first-time visitor," and "existing customer returning visitor."
- Each has a completely different CVR (conversion rate).
- The necessary measures for each are also different.
Adopting this perspective will help you identify where the problems lie in your store.
Furthermore, how well these fundamentals are implemented at a high level also affects LTV (Customer Lifetime Value). A trustworthy and value-for-money store will have a higher return rate for existing customers.
Of course, the product itself is the most important thing. However, from the perspective of EC operation, the content explained here forms the foundation.
Aiming for branding and direct searches comes after these fundamentals are in place.
Moreover, owned EC has significant advantages that marketplaces do not.
Even if you accumulate sales on a marketplace, customers will remember the experience as "bought on Rakuten" or "bought on Amazon," and the store name or brand name is less likely to stick in their memory. In other words, no matter how much you sell, it doesn't lead to branding. Brand awareness is absorbed by the marketplace.
On the other hand, when you generate sales with an owned EC site, customers remember the experience as "bought from the store called XX." As purchasing experiences accumulate, brand recognition naturally increases, and direct searches grow.
The ultimate goal of an owned EC site is to achieve "Top of Mind" awareness. Top of mind refers to becoming the first brand that customers think of when they intend to buy a product in a certain category.
Once top of mind is achieved, stable sales can be expected without relying on advertising. This is the true strength of owned EC, and an asset that can never be obtained on a marketplace.
The content explained in this article represents approaches that our company has actually used to achieve results while supporting many stores.
Owned EC is certainly not easy. However, by understanding the basics explained in this article and implementing them one by one, you will surely achieve results. This article was written not to discourage but to inspire success.
If you consistently put in effort in the right direction, owned EC has the power to significantly transform your business.
Detailed checkpoints for CVR improvement are also explained in "Why many Shopify stores are not increasing sales." Please read it along with this article.