CEC E-commerce Strategy & Planning 2 — Questions and Answers
Question 1: A DTC brand wants to reduce dependency on Amazon. Which strategic move best diversifies their sales channels?
- Increase Amazon PPC spend
- Launch a branded Shopify store with loyalty rewards (Correct answer)
- List on a second marketplace like Walmart.com
- Reduce SKU count to simplify logistics
Correct answer: Launch a branded Shopify store with loyalty rewards
Launching a branded own-domain store builds direct customer relationships, captures first-party data, and eliminates marketplace fees.
Question 2: Which metric best indicates whether a customer acquisition cost (CAC) is sustainable for an e-commerce business?
- Return on ad spend (ROAS)
- CAC to LTV ratio (Correct answer)
- Cart abandonment rate
- Average order value (AOV)
Correct answer: CAC to LTV ratio
A CAC:LTV ratio below 1:3 typically signals that acquisition costs outpace the long-term revenue generated per customer.
Question 3: An e-commerce consultant is evaluating a market entry strategy for a US apparel brand expanding into Germany. What is the MOST critical compliance consideration?
- Setting up a German social media account
- Complying with EU GDPR data privacy regulations (Correct answer)
- Translating product descriptions into German
- Offering free shipping within Germany
Correct answer: Complying with EU GDPR data privacy regulations
GDPR requires strict data handling, consent mechanisms, and privacy policies, with heavy fines for non-compliance across all EU markets.
Question 4: Which pricing strategy involves setting a high initial price and gradually lowering it over time?
- Penetration pricing
- Cost-plus pricing
- Price skimming (Correct answer)
- Value-based pricing
Correct answer: Price skimming
Price skimming extracts maximum revenue from early adopters before reducing price to attract more price-sensitive segments.
Question 5: A startup e-commerce brand has limited budget. Which customer acquisition channel typically delivers the highest ROI at early stage?
- National TV advertising
- Programmatic display advertising
- Email marketing to an owned list (Correct answer)
- Influencer mega-campaigns
Correct answer: Email marketing to an owned list
Email marketing to an owned list has near-zero per-send cost and consistently delivers among the highest ROI of any digital channel.
Question 6: What does a SWOT analysis help an e-commerce strategist identify?
- Keyword rankings and SEO gaps
- Internal strengths/weaknesses and external opportunities/threats (Correct answer)
- Customer lifetime value segmentation
- Supply chain lead times
Correct answer: Internal strengths/weaknesses and external opportunities/threats
SWOT maps internal capabilities (Strengths, Weaknesses) against external market conditions (Opportunities, Threats) to inform strategic planning.
Question 7: Which business model charges customers a recurring fee in exchange for ongoing product deliveries or service access?
- Drop-shipping
- Subscription commerce (Correct answer)
- Affiliate commerce
- Flash sale model
Correct answer: Subscription commerce
Subscription commerce (e.g., Dollar Shave Club) generates predictable recurring revenue and improves LTV by locking in repeat purchases.
CEC E-commerce Strategy & Planning 2
A DTC brand wants to reduce dependency on Amazon.
Which strategic move best diversifies their sales channels?