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Recent events have left many retailers scrambling to serve customers through digital channels. Although digital-first and multi-channel retailers have been able to pivot more easily, they have still faced unique challenges that require planning to overcome.
Possible market down-turns and changing buying-patterns require adaptation. Businesses — from B2C retailers to B2B service providers and manufacturers — need to rethink their online strategy. Nevertheless, you cannot sacrifice long-term planning in order to respond to short-term disruption. It’s important to look for strategies that will allow you to do both at the same time.
Short-term success will revolve around:
- Reducing risk
- Securing robust revenue streams
- Retaining connections with customers
Long-term success will depend on:
- Alignment with customer needs
- Data-driven decision making
- Integrated value chains
At this moment, ecommerce businesses are particularly well-positioned to succeed. Now that the dust has started to settle on a ‘new normal’, we want to look at a few key steps to shore up risk and prepare for the long-term.
Table of Contents
Step 1: Diversify and protect supply chains and fulfilment
Supply chain disruption was a major problem in early lockdown. For decades, low-cost suppliers and minimal inventory were supply chain management best practices. Furthermore, organisations have had a lot of success relying on third-party logistical services such as “Fulfilled by Amazon” (FBA).
However, putting all of your eggs in one basket is not a good strategy for disruptive times. Therefore, creating a more diverse supply chain (from material sourcing to fulfillment) can help reduce the risk of future disruption, such as lockdowns that may be reimposed later this year.
If there was one unique feature of ecommerce during early COVID-19, it was the competitive advantage of simply having items in stock.
- Flexibility to continue sales in the event of further disruptions
- Create options to align marketing efforts with stock levels
- Maintain the ability to provide service levels to customers
- More tailored services for customers
- Better cross-department communication
- Better alignment of marketing to business strategy
- More resilient and effective logistical system
Fundamentally, diversifying supply chains forces communication across your business. So,mMarketing teams can be encouraged to consider logistics when setting up campaigns. Total margin becomes easier to track with more scrutiny attached to each step of the operation. Your business can more readily focus on strategic goals while increasing your inherent flexibility in reaching those outcomes.
How to do it:
- Boost inventory by creating your own (if limited) or alternative logistical capabilities.
- Set up clear lines of communication between departments.
- Create mechanisms to track logistics, and tailor marketing spend based on strategic realities.
- Investigate multi-sourcing logistics partners.
- Review and improve inventory systems and reporting.
Step 2: Prioritise visibility across the right marketplaces
An in-house ecommerce website is important for customer intimacy and helps maximise the amount of data you can collect about shoppers. However, funneling all shoppers through your website is not realistic. Actually, 90% of customers price check items on Amazon even after finding them on a website.
Online marketplaces could be worth as much as $7 trillion in sales by 2024. Ecommerce requires being present on the platforms where your customers are, and providing them with the options necessary to deliver a ‘frictionless’ buying experience. But if you attempt to be everywhere at once, you can spread yourself too thin and fail to be effective anywhere.
Picking the right marketplaces
Focusing on the right marketplaces comes down to understanding your customers. Most businesses will benefit from being on the two giants — Amazon and Google Shopping. It’s the niche options that start to get more complicated. So, the right choice comes down to three factors:
- Your industry: some platforms are industry-specific. For example, GAME is an essential marketplace for gaming companies, but unimportant to everyone else. The same could be said for ASOS and clothing — particularly in the UK. And Curry’s PC World for electronics and appliances.
- Your geography: certain marketplaces dominate different regions. For example, Walmart is a huge player in US ecommerce, but has relatively minor influence elsewhere. The same goes for Sainsbury’s in the UK. OnBuy is another example of a regional UK player applicable to a broad number of product categories, but with limited penetration into other markets. Then there are big east Asian players like Rakuten (Japan) and Alibaba (China).
- Your customers: who your customers are and what they prioritise makes a big difference. Wish, for example, is popular among budget shoppers, but not applicable to the luxury market. Social media is another wild card here. Instagram Shopping, for example, is very important for fashion brands with young audiences, but mostly irrelevant to other forms of ecommerce.
For example, a large UK clothing retailer will need to be on Amazon and Google Shopping, but also ASOS, OnBuy and likely Instagram Shopping. If looking to gain a presence in the US, they could consider partnering with Walmart to make that transition.
By collecting and managing data about your customers and their buying habits, you can better focus your efforts on the marketplaces that matter. We will come back to the importance of data in the next step.
- Spread risk and reward among several marketplace players
- Take advantage of competitive offers from marketplaces
- Maximise visibility
- Reduced reliance on any given platform
- Increased ownership over customers and data
- Increased understanding of customer behaviour
- Frictionless buying experiences tailored to customer interests
- Increase sales
How to do it:
- Experiment with different marketplaces and track outcomes.
- Potentially segment your offerings for each particular platform.
- Read over terms and conditions and ensure you are not falling foul of their trading rules.
- Set up and capture data feeds from marketplaces using APIs or even CSV reporting.
- Avoid marketplace lock-in by building your own fulfilment and data analysis capabilities.
Step 3: Collect and use data
Having better data helps prepare for uncertainty. It also helps you make better decisions under varied circumstances. This means you can better understand your customers and trends, and better target ads. The right data correctly interpreted will grow your business while reducing costs. It can even help you define your portfolio and roll out new products.
The challenge behind data is three-fold:
- Collecting data
- Interpreting data
- Acting on that data
Ensure that you are capturing the data from the marketplaces you are part of. That means looking at both customer and competitor insights. You want to stay atop customer trends, and track competitor pricing, promotions, and market share.
For example, Amazon Supplier Central and Google Shopping have a range of detailed sales and marketing reports. Make sure to take advantage of that information and store that data in a way that will allow you to access it over time.
Data privacy regulations require organisations to constantly monitor their data collection efforts. GDPR requires businesses to constantly focus on the safety of personal data. But it’s not just about compliance — customers like the idea of data privacy. If in doubt, specialists can consult you on how to best align with data protection regulations while still getting the insights you need — get in touch if you want advice.
It’s important to look at data in the context of the big picture and make sense of data coming from multiple sources. That means investing in software able to pull data from multiple marketplaces reports and transcend a siloed view.
Predictive and prescriptive analytics can provide early warnings, model risk scenarios and develop pre-programmed responses. Data on purchasing behaviour and customer journeys can be used to generate personalised offerings. Harnessing machine learning and artificial intelligence will be vital identifying patterns of behaviour and emerging trends.
Acting on data
What you do with your data makes all the difference. You need mechanisms set up within your organisation to take insights and act on them. That means building a culture that respects data, can test actions, and is open to communication.
- Standard reports from ecommerce platforms will reveal some “low-hanging fruit”
- Improved communication across the business driven by data
- The creation of a data-driven business model: informing which customers and marketplaces to target, and what products to sell
- Scenario planning that involves the whole value chain rather than individual siloes
- The ability to flexibly act on data and spot trends early
- Improved efficiency driven by iterative testing and analysis
- Better alignment with customers based on data insights.
How to do it:
- Start a process for storing data feeds from other marketplaces — learn by doing.
- Look at the data that suppliers, marketplaces and/or logistics partners hold that can be useful to you.
- Keep informed about data privacy and compliance — consult with experts if needed .
- Create a data storage policy to ensure that you are not keeping data for data’s sake.
- Review what data you are capturing from your own website or marketing efforts and think about how it can complement data from marketplaces.
- Invest in tools that will help you interpret data across multiple platforms and channels.
- Prioritise data-based decision-making within your team.
Step 4: Invest in efficiency and flexibility
The pace of change in the post-pandemic world will force businesses to continually reassess their strategies. The more flexible and efficient you are, the easier it is to weather downturns and respond to pressures. Multiple software applications and related services will be needed to automate ecommerce processes, including :
- Research automation: Researching product performance across marketplaces. Tools to consider include Jungle Scout, ShelfTrend and SEMRush.
- Automating your own ecommerce platform: Building your own ecommerce presence requires specific features. Platforms to consider include Shopify and BigCommerce.
- Operation automation: For example, RPA tools like Blue Prism or Pega can drastically reduce time spent on administrative tasks. So can a good CRM like Salesforce. Businesses of all sizes successfully deploy Kanban boards like Asana for project management automation. Smaller businesses might consider investing in a tool like Wave for automating bookkeeping and invoicing.
- Fulfilment automation: Consider automating the end-to-end process of order fulfilment and shipment with products such as ShipMonk, ShipBob, and ShipCentral.
- PPC automation: Paid advertising is a critical component of online success. Automation capabilities can drastically improve performance and free up time to focus on strategic outcomes. We are area specialists in this — if you want to learn more, get in touch.
- Data analytics automation: Without analytics, you wouldn’t be able to measure the performance required to strategise better. This approach will deliver real-time insights on customers and supply chains, as well as a new agile operating model. Fundamentally, take analysis seriously and look into better ways to use your data.
- Save time: automating repetitive tasks will have an immediate impact, and allow you to focus more directly on strategy.
- Increase customer engagement: automation allows for better planning and greater personalisation — both of which improve engagement.
- Increase advertising opportunities, including up-selling
- Use your ad budget to best effect — reduce wasted spend, focus on selling the right things, and optimise your PPC bidding. PPC automation vastly increases accuracy as machine learning considers varied signals.
- Product portfolios and inventory become aligned
- Adding new marketplaces becomes easier
- Product launches become more frequent to match changing customer needs
- More experimentation is possible
- Your human resources are used more efficiently and effectively
How to do it:
- Choose where to start your automation: marketing is a good starting point from a data collection, analysis and action standpoint — allowing more data to then be fed into other business processes.
- Use third party AI and machine learning analytics services to drive advertising and promotional activities.
- Organise and update ecommerce product listings and product data to be marketplace independent.
- Ensure that the business has the necessary skills and experience.
- Look at your organisational structure to make the best use of skills needed.
Make time to plan and refine your ecommerce business strategy
It’s time to plan and build for the new normal. We still don’t fully know how customer expectations will change, or the best way to respond. Organisations that focus on planning, customer experience, and agility will be best placed to thrive and strengthen their ties with new and existing customers. Data can help you do that and make the right decisions. If you want advice on how to better grow online, get in touch — we can help.