How Product Positioning Helps Your E-Commerce Business


Disclosure: Our content is reader-supported, which means we earn commissions from links on Digital. Commissions do not affect our editorial evaluations or opinions.

The e-commerce market grows everyday. According to etailinsights, there are 2.1 million online sellers in the United States. About 1.7 million of these are on e-commerce platforms or self-hosted websites, and the rest sell on marketplaces like Amazon.

These sellers combined generated e-commerce sales of $431.6 billion in 2020, which is great until you realize that quite a few e-commerce stores make less than $1,000 a month. The ability to sell products online has leveled the playing field so small businesses can compete with large companies.

However, e-commerce has also created an environment of anonymity: anyone can sell any product anywhere, and the battle for customer dollars often boils down to narrow differences in price or delivery times. You can join the fray and embark on a series of price wars or delivery schemes that make you stand out to consumers.

You’ll gain more sales — temporarily.

However, these tactics are unsustainable for an e-commerce business because they cut into profit margins, and eventually, you make very little money. A better way to beat the competition is to position your product as the best in the market.

It might not be the cheapest or the quickest route, but it’s the best strategy of its kind. Product positioning can help your e-commerce business build appeal and establish value in your target market, thus generating more revenue.

Key Takeaways

  • The e-commerce sector brought in $431.6 billion in sales in 2020.
  • Many e-commerce businesses make less than $1,000 a month.
  • Product positioning is a marketing strategy that can help your e-commerce business rise above the competition.
  • Some product positioning strategies include finding a niche, focusing on unique attributes of the product, and expanding the market.
  • A product positioning strategy requires a deep understanding of the market and the product.

What Is Product Positioning?

Product positioning map.

Product positioning is a marketing strategy that focuses on communicating a product’s qualities to a specific customer segment as pertains to their needs and lifestyle, presenting it as a desirable acquisition for that audience. A product positioning strategy also considers consumer perception of competing products. Product positioning is critical for sellers with branded products vulnerable to copycatting.

A famous example of this is the Oreo cookie, which began life as an imitation of the then-popular Hydrox cookie produced by now-defunct Sunshine Biscuits. Sunshine failed to position Hydrox cookies as the healthier choice against its competitors and was unable to use its leverage as the first in the market. Hydrox cookies as produced by Leaf Brands are still available today.

However, very few people remember them except in connection with Oreos, the top-selling cookie in the U.S. today. The Oreo-Hydrox story has been much discussed, but most attribute the failure of Sunshine on brand positioning. Arguably, this shouldn’t be the case since the brands were Sunshine and Nabisco, and the products — Hydrox and Oreo. So, what’s the difference?

What Is Brand Positioning?

Briefly, brand positioning is the rank that a brand instills in the consumers’ minds in the value hierarchy relative to the competition. The goal is to lead consumers to identify with and prefer a particular brand over other brands.

For example, car owners with a practical and conservative bent may prefer vehicles from Kia instead of Audi, which has positioned the brand as classy and sporty. The brand is Kia, but the product might be any Kia model, such as a Sorento. A buyer might prefer the Kia brand, but whether they decide on a Sorento or another model will depend on the specific attributes of those car models like product positioning.

Why Is Product Positioning Important to Your E-Commerce Business?

Discussing analytics on a table with various tools, papers, and electronics.

Product positioning can help you differentiate the products you sell from that of the competition. In the Oreo-Hydroxy example, Hydroxy dominated the market until the 1950s when Nabisco increased Oreo’s price point, positioning the cookie as the superior product. It probably also didn’t help Sunshine that people associated the name of its cookie with cleaning products.

When executed correctly, product positioning can influence buyer behavior. You can persuade your target market that purchasing your product instead of competing ones is the right decision.

You can do that even if your product is more expensive, and there’s very little actual difference between your product and those of your competitors. Product positioning is essentially about perception.

That isn’t to say that you should practice deception when creating your product positioning strategy. People are smart. You might hook them the first time, but if they find that your product doesn’t live up to expectations, you’ll lose them quickly.

The trick is to find your product’s place in the market. It might be through unique value, superior quality, or versatility in use. Your job is to identify the attributes of your product that will give you leverage over your competitors for the same market.

How To Position Your Products With Examples?

  • Find a Niche and Work It
  • Focus on What Makes Your Product Different
  • Expand Your Horizons

Product positioning is the bee’s knees of marketing, although it often gets buried in overall brand marketing strategy. Knowledgeable people, which now include you, pay more attention to creating a product positioning plan. Here are some strategies that could jumpstart your efforts.

Find a Niche and Work It

Vases as ecommerce products.

The easiest way to position a product is to find a small group of people with common interests that are almost certain to buy it. Becoming a niche website owner is an excellent business ideaHowever, if you already have a perfectly good website that isn’t for the niche market, you can feature something that qualifies as a niche product.

A good example of a niche product is cannabidiol (CBD) oil for pets. According to studies, 45% of pet owners in the U.S. spend as much on their pet’s health needs as on their own. The CBD oil for pets market includes edibles, tinctures, and topicals, but most pet owners choose edibles as a vehicle for their pets.

Use that knowledge to home in on the best way to ease the anxieties of these fur parents. For example, you could position your product as pesticide-free or organic. If you can live up to your claims, you can develop a loyal fan base for your CBD oil product for pets, and as you can see from the sales figures, potentially profitable.

Focus on What Makes Your Product Different

You can still do effective product positioning even if you’re not in a niche market by focusing on what makes your product superior to competitors. For example, thousands of online sellers offer cookies, so focus on aspects of your product that will make it shine from the rest. You can do this in several ways.

Humanize It

Create videos to show how the cookies are made and packaged. If you sell handmade cookies, you can show why your cookies aren’t always consistent in size. That adds a homey touch that would appeal to many people. An excellent example of an appealing video is Carol’s Cookies, also known for being nearly half a pound each.

Make It Sustainable

People have become more socially conscious, which is why a product that prides itself on its sustainability is sure to win brownie points from consumers. One example of a business selling sustainable cookies is Urban Bakers. Their cookies come individually packaged in compostable bags with labels.

The company also makes charity a monthly habit, pledging a portion of every order to the featured charity. The company also uses Square, one of the best e-commerce platforms for creating online stores.

Urban Bakers website with a screenshot of the footer.
Source: Urban Bakers

Price It Attractively

While lowering your prices to match your competitors can be a good move in the short term, it isn’t usually sustainable. You might have better luck increasing your price point to show that your product is a premium item.

This’s what Nabisco did with the Oreo cookie brand. Alternatively, you could establish purchase discounts for reaching a minimum amount or offering a baker’s dozen, which means getting 13 for the price of 12.

Expand Your Horizons

The beauty of an e-commerce business is you can sell anywhere. If the target market in one geographic location isn’t selling too well, you might want to try another one.

For example, New Jersey-based Bang Cookies will send its cookies anywhere in the U.S. with a minimum of $14 order plus shipping and free delivery on orders of 12 cookies or more.

What To Do Next

Once you have positioned your product, the next step is to let everybody know about it. The most effective way to do that’s through social media marketing and email. Social media management tools can help you post ads on top social networks and manage emails all on one platform.

Creating easy-to-remember taglines and slogans can also go a long way toward getting people to identify with your product. Oreo has had many slogans through the years, but the most memorable is the “Twist, Lick, and Dunk” campaign.

The TV commercial made eating Oreos a ritual with children, sealing it in their minds as a pleasurable experience forever. A mobile app game called “Twist, Lick, and Dunk” even got 4 million organic downloads at one point. Now that’s what’s called effective product positioning. Product positioning doesn’t necessarily involve TV commercials and mobile apps.

Likely, your e-commerce business won’t be able to afford it. However, with a deep understanding of your target market, niche, and product, you can develop an effective product positioning strategy you can afford.

Keren Dinkin Avatar
Scroll to Top