October 6, 2019

E-commerce in Czech

By pavel

A brief extract from Business Leaders magazine (03/2019) about e-commerce in Czech Republic and other online resources I came across while doing the research. 

  • e-shop/person ratio is the highest out of EU (around 42,167 e-commerce solutions currently running in Czech, yearly +3.5%)
  • estimated turnover for 2019 – 165miliard CZK (currently 122,215,343,123 Kč)
  • expected growth in small-business market = 13%
  • e-commerce brings around 10.2% of total turnover for small businesses
  • 60% of e-commerce solutions cost around 300,000 Kč (out of box solution, often labeled as custom but it core+addon/edits)
  • full custom e-commerce solution sells around 1milion Kč (limited supply)
  • full price range is 80,000 – 10,000,000 Kč (b2c / b2b)
  • majority of agencies are located in Prage (78), South Moravia/Brno (28), Selesia / Ostrava (33)

Available solutions / options on the market:

  • template – open source or subscription based – shopify, webnode, wix, simply to launch but limited in functionality / customisation 
  • out of box – usually based on core system provided by agency extended by add-ons, custom design, some add-ons already built but changes are driven by the main market target of the agency, otherwise custom development can become pricy or not allowed by agency
  • custom solution – custom coded, most expensive 
  • in-house development  – several employees working on e-commerce, usually used where e-commerce is primary  business activity

!Note! Out of box is sometimes sold as “custom solution” to customers surprise. 

source: https://exec.shopsys.cz/vyzkum#
Note: e-commerce solution delivery time (excludes negotiation)

Czech e-commerce is primarily driven by custom solutions provided by agencies!

New functions (dark purple) vs corrections (light purple)

Extract from shoptet e-commerce feedback (common problems):

  1. welcome banner with discount = not welcomed, should be used for regular customers (new customers has not developed trust yet and wants to know the site/products better), potentially slowing down page load, should be used elsewhere
  2. registration process, if possible allow no registration and get the details later
  3. company info = business address, if missing the trust lowers customers interest, similarly contact section having only a form with no info of the recipient or who do you deal with can become a problem = loss of business
  4. too many categories with a few products = too many clicks
  5. returns of product = customer comes always first, even if they don’t read the condition of sale, find a way to make them happy = negative review means loss of business; be upfront with conditions and do not hide them in terms and condition section made by lawyer 
  6. Products in stock = must be in stock, be carefull with marketing where you state you have it in stock. If not in stock, offer alternative product. Try to provide as accurate data as possible. “Unknown” = not good. 
  7. Late delivery = customers not picking up products, negative review
  8. Communication = late reply means no business, no feedback means no possitive reviews too, Order updates must be sent regularly and checked – otherwise again = loss of business. Be available where you are mostly active, customers automatically expect your presence there. Feedback from multiple sources / heureka, product review, and make sure you respond to most of the customers (most importantly those with negative feedback). Build on relationship with those that give positive feedback – little perks, bonuses etc.
Payment types: customers preference for the payment method in Czech Rep?
Pay on delivery = 34% | Pay in person/pickup = 22%
Bank Transfer = 34% | Online payment = 10%
Delivery method – usage in % by e-commerce businesses.

Price comparison sites and their popularity/usage (source):

  • heureka.cz 53%
  • zbozi.cz 42%
  • glami.cz 30% (only in fashion)
  • srovname.cz 2%
  • hledejceny.cz 3%

source: https://www.ceska-ecommerce.cz/

Reasons for shopping online (source):

  • 47% easy goods comparision
  • 18% comfort shopping (home, no queues)
  • 11% broader selection
  • 10% time savings
  • 8% lower price
  • 6% re-order option

Reasons customers fear the most (source):

  • 43% product is not suitable (cannot touch or test)
  • 21% return issues
  • 17% nothing / no reason
  • 8% misuse of payment details
  • 6% misuse of personal details
  • 5% no help from seller

Devices used for shopping online (source):

  • mobile phones 42% (up)
  • notebook 65% (down)
  • desktop 53% 
  • tablets 17%
  • read more about DPD report (cz) and market share info

2018 e-commerce market dominance in Czech (source):

  • 1. fashion (43 %)
  • 2. leisure goods (37 %) 
  • 3. health and beauty (35 %)
  • 4. electronics (33 %)
  • 5. books (29 %)

Helpful links for understanding the process and comparing solutions:

  • https://www.vybrat-eshop.cz
  • https://www.mujprvnieshop.cz/ (sponsored by shoptet)

Common obstacles: 

  • wrong product (23% returns) = extra delivery costs
  • delays in delivery = loss of customer
  • peak seasons (christmas period) = logistic issues

Case study (BIOOO.cz)

  1. promoting healthy lifestyle
  2. supporting sustainability by making clear choices 
  3. openness – product content is exposed – open discussion and testing
  4. branding – creating community “#BiOOOcz” – “O” is pushed everywhere and clearly stands 
  5. multi-channel strategy (see comparison omni vs multi) – real people behind the business, community driven engagements
  6. target audience varies – not strict to vegan/vegetarians but open to other healthy conscious people

Blog relevance

  • keywords selection is a priority and blog should be integrated in e-commerce
  • extend the content to various searched phases (search, evaluate, select, specify) = mobile phones / smartphones / iPhones / iPhone XS 16GB
  • voice search optimisation = extends keywords into phrases
  • take advantage of business’ location or related social activity (health products + events, fashion + beauty…)
  • seasonal trends = stay ahead with content creation in advance (give time to SE to index your content), example GDPR was announced in advance – marketing advantage 
  • be active / responsive = react to news / GFA – Google Fresh Algorithm

E-mail marketing 

  • declining but open rate can be still held 30-40% and 80% with personalised campaigns 
  • common issues
    • general emails / non personalised e-mails = collect data and use it for targeting (left shopping cart, favourite product/colour etc, create engagement with customers to know their preference)
    • no recipients = collection of subscribers is not effective, can result in 50% loss of sales, a product selector can collect data necessary for future sale
    • pop-up to be used only on new customers
    • 80% e-commerce solutions lacks protection for spam bots (online forms missing reCaptcha) or typos (e-mail address) = 13% e-mail addresses fail (seynam.cy) => autocomplete fixes it 
    • form positioning = not visible, commonly “thank you” page is not used well = advise about “promotion” or “bulk” category in e-mail clients
    • double opt-in is a must (Seznam.cz claims no delivery upon being caught in the spam trap), servers as a proof 
    • expecting 100% delivery = 76% might not be delivered
    • usage of same domain for marketing and transactions
    • missing relevant domain records (SPF, DKMI, TXT)
    • outdated database = must stay relevant, otherwise remove from database
    • ignorance of mobile devices = optimise for mobile viewing, avoid full size pictures and allow clearly “unsubscribe” option otherwise there is 43% changes of getting marked as spam
    • open rate < 10% => check DNS
    • open rate < 20% => check segmentation, e-mail template, remove inactive contacts
    • open rate < 30% => improve e-mail marketing = A/B testing 

Future forecast:

  • personalisation
  • bots automation
  • drove delivery
  • instant payments (crypto)
  • virtual dressing rooms
  • cost prediction (AI) 
  • voice search optimisation

Other resources:

  • samba.io – artificial intelligence used for marketing and personalisation
  • ecommerceday.cz – conference in Brno, education source
  • eshopiste.cz – eshop marketplace, investment opportunities
  • smartlook.com – insights into visitors behaviour (extends GoogleAnalytics)
  • Besteto.cz – meetup and outsourcing e-commerce activity / marketing
  • onlinePeople.cz – headhunting agency focused on e-commerce

If you want to share your thoughts, ideas, project or simply want to get connected, follow me on LinkedIn or leave me an e-mail with your favourite platform you use for networking.