Sorry to say it, but it looks like the days of easy growth in e-commerce are over.
Take the 2014 Black Friday/Cyber Monday weekend as an example. Usually a bonanza for online sellers, the early numbers tell us that for some e-commerce retailers, contrary to expectations, site visits were flat and online spending was actually down from last year.
And so, after a long stretch of seemingly guaranteed fizzy growth for all, it looks like a more mature phase is setting in, especially in markets like the US and UK, which first led the e-commerce boom. This had to happen eventually—consistent 20 percent (or more) growth cannot be sustained indefinitely. Nonetheless, it comes as an unwelcome shock for some.
The end of easy growth signals the beginning of a challenging new reality for internet retailers. In an era during which growth is more difficult to achieve, e-business managers will no longer be able to rely on booming top-line sales to prop up a heavy investment plan, nor can they use a high growth rate as a fig leaf to hide a sub-par customer experience.
In this new era, where every single point of growth will be hard-fought and hard-won, new rules will be required to win the race for e-commerce sales. Talking to leading e-commerce brands, I have identified four key rules to help e-businesses survive and thrive in this new era.
Rule No. 1: Establish your own commerce software development team, rather than relying 100 percent on a third-party system integrator.
- Rule of thumb: if you’re spending upwards of 400 days a year with your SI on platform development, you really ought to consider spending that money on setting up your own team.
- Start small, then build up scale over time. In house development capability is a far more agile, cost-effective – and satisfying! – way to deliver custom CRs, and achieve maximized growth.
By now, you’ve most likely hired in some (expensive!) digital commerce experts into your business, typically in the fields of marketing/analytics/visual design/software development. And typically, they’ve been set up in a standalone digital or eCommerce team, with very specific KPI objectives. This seems reasonable to begin with but beware! This approach can become counterproductive over time, as it builds an unnecessary silo into your business operations.
Rule No. 2: Set a timetable to normalize and integrate digital people and digital ways of working across your business.
- Instead of a maintaining a specialist Silo, considering re-deploying your Digital experts into their ‘natural’ homes (e.g. digital marketing experts into the marketing department., analytics experts into the finance department). Doing this will boost understanding of e-commerce across your operation, and accelerate your evolution into a truly digital-savvy organization.
Rule No. 3: The reality of ‘seamless’ and ‘omnichannel’ means executing on the details like never before.
Most of us are familiar by now with the omnichannel mantra: seamless, connected, customer-led experiences, but few companies are actually executing on it. Why? Because omnichannel is perceived as a technology discipline, rather than a human one. And that’s a big mistake.
It’s vital to realize that a company’s workforce is critical in bringing the Omni-channel experience to life (John Lewis in the UK is a great example of this). Train and incentivise your people to be champions of omnichannel.
- Every member of your customer-facing staff, from sales to Stores to call centers, needs to be familiarized with your new ‘omni’ operating model. A quality change-management and training program is essential.
- In addition, KPIs need to be set that incentivise the whole business to deliver a superb 360-degree customer experience, rather than just encouraging each team to focus on one small part of the journey.
Rule No. 4: It doesn’t really matter what you sell – it’s how you sell it (and why you sell it, too).
On this point, I recommend a visit to the excellent blog of retail futurist Doug Stephens. To paraphrase one of his big ideas: to succeed in this new era, businesses need to revisit their core principles and operations, and fashion a customer experience and business philosophy that allows them to truly differentiate. This can be painful and daunting, but an omnichannel renewal actually offers the perfect opportunity to dive deeply, and identify the sources of future growth.
Don’t be afraid to think the unthinkable, and use your digital business transformation to prompt a deeper strategic renewal.