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The e-commerce value trap: The cost of missing metrics


Does your e-commerce work offer value to your organization? Overall, did the last project completed provide good value for money; did it improve customer experience; did it contribute to the bottom line? What measurements and metrics were in place to map back to?

These are the questions e-commerce managers need to be asking themselves when they embark on new projects. To develop a further understanding of retailers and e-commerce managers challenges, successes and failures, we conducted a survey of 100 senior e-commerce decision-makers within UK retail.

We found that 30% of retailers operate in an e-commerce value trap, and expect to get no value back from their work – a staggering statistic when considering any e-commerce project.

The survey also revealed 99% were facing an e-commerce challenge. For decision-makers commissioning e-commerce work – it’s startling to think that there’s such a high expectation of problems and failure. But why is this the case?

The e-commerce value trap: Digital challenges

The study uncovered that measurement is a big issue for organizations, with a staggering 71% not measuring return on investment in e-commerce projects in any way.

In addition to this, here were more surprising statistics demonstrating the e-commerce value trap:

  • One in three fail to meet the business objectives
  • 5% will not meet any KPIs and be a complete failure
  • 1/3 struggle to find acceptable and meaningful metrics for success
  • 52% don’t track customer retention

This adds up to a significant amount of money. On average the cost of failed or abandoned e-commerce projects is as much as £180,000. If retailers are expecting 30% of their work to give them no value – that’s £217,000 of an e-commerce project budget of £725,000.

Rough roads ahead: Without defining value and metrics, e-commerce leaders are lost

How to define value and put the right metrics in place is such an important part of any e-commerce project. However, the survey shows this appears to be a big problem for UK retailers. It’s clear that work is started with no clear goals in mind. This could be down to projects not being fully scoped out, or that work is started without success being fully defined, or what it’s going to achieve for the business overall.

But how and why are so many retailers and professionals caught in this e-commerce value trap?

Align your organization before beginning e-commerce initiatives

E-commerce needs to be viewed as an issue and an opportunity for everyone in the organization. That’s not to say you need to let every cook into the kitchen, but it’s about collaboration and understanding on all sides.

Sometimes there can be tension between IT and marketing, or high street stores and their online counterparts. These are problems the leadership of a company needs to solve.

Ensuring alignment across the organization is key to the overall success of the company – never mind individual projects. Any and all projects need to have a business case attached to them, and e-commerce is no exception. If there isn’t clarity in why a project is being completed at that time, perhaps it isn’t the right time at all.

CX, DX, UX, but first: Get the basics right

How can you match what the customer wants with what’s possible for your organization at that time?

While it can be tempting to implement the next ‘big thing’ when it comes to technology – it’s more important for retailers to understand their customer pain points and evaluate what will deliver the highest ROI.

Success is increasingly being determined by the digital experience, which means it’s critical to get the basics right before investing in more cutting-edge technology.

Realistic goals

To avoid an e-commerce value trap, you must first define value – it’s one of the most important parts of any e-commerce project. It’s from this point that goals, metrics, and timelines can be agreed upon. They need to be realistic, business-centric, and clear for all parts of the business to understand and move forward with.

The next step is scoping out the project including all metrics: what’s the vision; how will the project impact the business; how will customers be affected and/or delighted; what’s the benefit to the balance sheet; what are the ideal and realistic timescales?

Determine what success looks like and build back from there. This ensures value is added to a project, and there won’t be a negative cost associated with metrics, since they’ll be clearly mapped out for the duration of any project.

The experience gap: Why it’s bad for business, and how to close it. Download our Gold Guide here

Kevin Murray
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Kevin Murray

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