The question that most e-commerce businesses constantly debate over is how they can differentiate themselves from traditional e-commerce platforms and increase customer engagement and loyalty. The answers tend to be repetitive, with a focus on providing unique and personalized experiences through the use of technology and data.

However, the ultimate goal is to create less dependence on seasonality, new product/line launches, and an aggressive CRM strategy to ease revenue spikes and increase long-term visibility into working capital. To achieve this, e-commerce businesses need to explore opportunities for recurring revenue.

So, how can you methodically turn "unique user experiences" into "revenue stream opportunities" and then into "product ideation"? The answer is to list three high-level product ideas and the critical user benefit for each. For Example:

Personalized Product Recommendations:

By collecting data on customer preferences and past purchases, e-commerce businesses can provide customized product recommendations based on each customer's unique needs and interests. Leveraging this data will allow you to improve the shopping experience and increase customers' likelihood of purchasing and returning for future purchases.

Virtual Product Try-Ons:

‍ E-commerce businesses can use augmented reality technology to allow customers to try on products virtually before making a purchase. AR provides a more immersive and personalized shopping experience, increasing customer engagement and the likelihood of purchasing.

Interactive Product Demonstrations:

By leveraging multimedia content such as videos and animations, e-commerce businesses can provide interactive product demonstrations that allow customers to see how a product works and nurtures purchase intent. Immersive UX enhances the shopping experience by providing a more comprehensive understanding of the product, increasing customer engagement and their likelihood of purchasing. Before digging into specific ideas, it's essential to ensure there are opportunities for significant revenue from each of these product directions. The next step is to focus on how to monetize these potential user experience offerings. For Example:

Personalized Product Recommendations:

• Subscription-based services: Offer customers a monthly or annual subscription to receive personalized product recommendations curated just for them.
• Affiliate marketing: Partner with other businesses to receive a commission for recommending their products to customers through personalized product recommendations.
• Product upsells: Recommend complementary or related products to customers based on their preferences and past purchases, increasing the average order value.

Virtual Product Try-Ons / Interactive Product Demonstrations:

The good news here is that the similarity between these two experiences enables them to overlap with monetization opportunities.

• Premium Access: Offer customers a premium version of the virtual try-on experience with additional features and benefits for a recurring fee.
• Product upsells: Recommend complementary or related products to customers based on their virtual try-on experience, increasing the average order value.
• Advertising: Partnering with brands allows you to showcase their products through virtual try-on experiences and generate revenue through sponsored placements or affiliate sales.

Learn how simplehuman created a new $10MM subscription business from their existing customers with digital transformation. Check out their growth story here.

Now that potential recurring and one-off revenue streams have been identified, it's time to focus on one idea. In this case, we'll concentrate on Virtual Product Try-Ons. The competitive advantage here is augmented reality (AR), which provides customers with a more interactive and immersive shopping experience.

The next step is determining the minimum viable product (MVP) for each product feature you have listed. Defining each feature's MVP is a prerequisite for determining the necessary resources and technology to bring these features to life.

So now that you have defined your MVPs and projected your costs, what's next? Easy, now it's time to hypothesize your outcomes by conducting an impact analysis. You will use the results of your impact analysis to infer the value of each feature to your business and the risks and challenges associated with implementing them...or even not doing so.

With the impact and value hypothesized, it's time to create a roadmap outlining the steps required to bring your vision to life. Your roadmap should consider the MVPs, impact analysis, and other relevant factors, such as the necessary resources and timeline to implement.

Finally, it's time to get to work and test your ideas until they are ready for launch. This process may involve several iterations, so it is crucial to be prepared to make adjustments and improvements along the way. With a solid plan and the right resources, you should be well on your way to launching a successful product and growing your revenue streams or even creating new ones!

If this resonates with you, or you want to explore what’s possible for your business, Schedule a free consultation with us today to explore what’s possible with digital transformation.