3 Tips for Structuring Your E-Commerce Business
In today's omnichannel era, there are multiple moving parts within retail organizations — e.g., store operations, mobile teams, IT, marketing, etc. Where does e-commerce fit in and what role does it occupy? Brett Trent, the newly appointed senior vice president of digital retail at rue21 (he officially starts the job this coming Monday after having spent the last six years as the vice president of e-commerce at Dressbarn and Maurices), addressed this question among other topics in a session yesterday at the eTail East conference in Philadelphia.
‘We Don't All Know What We're Doing’
You need to answer the big questions first, Trent advised the audience in regards to establishing e-commerce's role in your organization. Start with a pyramid structure, with vision at the bottom. Answer the question, "Why are you doing this?" This answer should come from your executive team, and should be some variation of "to provide for the continuation of the business through profit," Trent said. The remaining levels in the pyramid should be (in this order) strategy, tactics (how are you doing this), execution, measure and profit.
Everyone in the company needs to be pulling in the same direction to make your vision a reality. Trent advised the audience to start by putting together a wish list. For all retailers, that should be some combination of the following three things: top-line sales, bottom-line profits, and maintaining and enhancing the value of the brand. The priority of these three may differ depending on the company — e.g., top-line sales may be the top priority for a publicly traded company, while bottom-line profits is the No. 1 priority for a private company, yet maintaining and enhancing the value of the brand is most important to a startup.
"Every employee needs to be aligned on your company's priorities," Trent said. "They need to know where they live on the pyramid."
‘Good Fences Make Good Neighbors’
Structure matters, Trent said, before outlining three options for how an e-commerce team can be structured within a retail business.
- Option 1 (Subordinate): In this model, e-commerce is added into a department such as IT, marketing, finance, etc. The problem is it's never the highest priority, Trent said.
- Option 2 (Distributed/Matrix): In this scenario, e-commerce is cut up and distributed throughout the organization. The drawback to a distributed structure is that it's susceptible to siloed thinking, Trent said.
- Option 3 (Dedicated): Trent's preferred choice, this model makes e-commerce a separate entity — at least to some degree. While this structure is susceptible to isolationism and comes with higher upfront costs, it's the most efficient and effective. Get in a dedicated structure, Trent urged the audience. That said, for a dedicated structure to work, e-commerce team members must meet and communicate regularly with the other parts of the business, most notably store operations. The most important relationship in retail today is the one between the head of stores and the head of e-commerce, Trent said.