Your E-Commerce Component May Need a Shot in the Arm
Despite encouraging economic numbers, about half of American consumers feel sour about the nation’s economy. While consumers are still shopping, they’re often looking to trim spending and will be cautious about their dollars over the next year. And with retail sales slowing, there's mounting pressure for brands to win more share of wallet. As the retail experience hinges increasingly on digital experiences, brands must ensure that they meet consumers where they’re looking for their next purchases if they want to outcompete and scale. Increasingly, that includes dozens of digital channels and online marketplaces in a single region.
Therefore, it’s imperative for brands to bolster their e-commerce function. The pandemic presented a prime opportunity for brands to invest in e-commerce. However, those investments may have fallen off the priorities list for many C-suites — and brands’ e-commerce arms may only constitute a small percentage of overall resources and attention.
Here’s why it’s crucial for brand leaders to change tack when it comes to e-commerce investment and how they can overcome e-commerce misalignment.
E-Commerce is Likely Your Largest Growth Channel
E-commerce spending has slightly dipped as we’ve eased out of the pandemic, but it's projected to grow. And you don’t need a fortune teller to get the full picture of the e-commerce future here in the U.S. Look no further than China and the United Kingdom, where e-commerce makes up 45.9 percent and 30 percent of total retail sales, respectively. These numbers emphasize the universal shift toward online shopping.
Brands must offer value-driven, personalized experiences to capture wallet share as cautious consumers transition to online shopping.
Overcoming E-Commerce Misalignment
To meet future consumer behavior, brands need to expand their e-commerce capabilities, especially in the realm of data intelligence. And given the economy’s potential volatility, brand leaders must regularly deliberate on their e-commerce investments and how they tie in with consumer and value creation. Digesting regular, granular trends in market and consumer behavior can help you get ahead of the curve when it comes to targeted marketing, product development, and other digital commerce areas. Partnering with an advisory group may also help some organizations identify some of their biggest misalignments and areas of opportunity.
Dangers of the E-Commerce Status Quo
When brands get down to assessing their e-commerce gaps, they’ll find a sizable status quo to overhaul. Within a typical brand, there can be a significant divergence in the operational cadences of a brand’s e-commerce division and the rest of the brand’s sales arm.
To get a sense of this, imagine one merry-go-round going 15 mph while another is going 85 mph. This image is not far off from portraying how unaligned e-commerce components are for many brands.
Let’s dive into a set of potential consumer scenarios to fully grasp the implications of e-commerce misalignment:
- Your brand starts offering an in-store promotion, but the promotion isn’t reflected online and generates customer confusion and dissatisfaction.
- Your digital marketing team is pouring funds into keywords for products that are out of stock in your brick-and-mortar locations.
- Your supply chain team isn’t aware of how your e-commerce sales are trending. You might have enough inventory for your brick-and-mortar locations, but your team won’t carry the right amount of safety stock for the rest of your sales. You’ll be left with uneven order coverage, leaving a bad taste in the mouths of both consumers and retailers.
These are only a few ways your brand’s e-commerce misalignment can hurt customer relationships and both short- and long-term revenue. Misalignment like this erodes both trust in your organization (internally and externally) and your customer brand loyalty.
Accelerating Your Brand's E-Commerce Capabilities
The time is now for brands to get on the front foot with their digital and e-commerce strategy. Brands need to establish the direction of their sales — for both e-commerce and brick-and-mortar retail — and find the alignment gaps hindering that direction.
An important component that will make alignment easier while saving time and resources is consolidating your tech stack to avoid the issues that arise from having multiple dispersed platforms and resources.
More important, however, for your e-commerce alignment are the talent and partners you bring on. Look for leaders with a track record of growth and retention in e-commerce and omnichannel. They must be adept at digital transformation and excited for the opportunity to build out existing or new e-commerce divisions in your brand. Furthermore, they need to know how to leverage a cost-effective array of partners.
By making the commitment to revamp and retool your e-commerce division, your brand will not only weather economic turbulence, it will also ensure long-term consumer and value creation.
Don Brett serves as managing director of advisory, North America at Pattern, the world's leading e-commerce accelerator.
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