top of page

Online Retail and eCommerce Strategy



Are retail and wholesale businesses ready to take advantage of the changes and growth in ecommerce?


Do they understand and are they prepared to support consumer needs and opportunities?


The answer is not clear, and it should be answered by looking to the business strategy. We don’t know the percentage of companies that plan and strategise however antidotally it would see that the number is very low. At best it is done informally. More often boards, directors and managers are at risk by not managing digital and ecommerce within the business. It is still often seen as a technical or marketing task or even relegated to the “too hard” basket.


To be successful it is very important for ecommerce and digital to have a trusted voice in the business.


Start-up vs Traditional Retail


Why do start-ups and pure online retail always seem to have a better and more successful web presence than older traditional businesses?


The founders, CEO and directors of start-ups are generally more connected with how the business should operate and appear on the web and social media. The decision making is at the top. In more traditional businesses with a heavier management structure the CEO and board are not engaged in what they consider to be tactical decisions like the web and social media. How wrong can they be?


Delegation of responsibility comes at a price and that price might be failure to launch.


This is also seen in start-ups as they grow, and the founders or CEO loses touch with the core principles of what made the business work. There is an old adage “stick to the knitting” that should be considered as businesses grow and change.


Changing the Influence of eCommerce


We have seen a significant increase in online retail sales since the outbreak of COVID and the resulting lockdowns that drove people to embrace digital in many ways.


Online retail has been growing steadily since 2015 but lockdowns resulted in bricks and mortar retail stores of all sizes to shut down. People locked down in their homes moved online to get both essential items and those impulse buys.


Since the end of the lockdowns, we have seen a drop in monthly online retail sales although still overall growth annually.


Businesses large and small are now reviewing strategy with new pressures coming from competition, inflation, increasing cost of living and downward pressure on wages. Additionally, supply train disruption has seen limited available products and longer and more costly logistics. Marketplaces like eBay, Amazon, Facebook, Catch, Kogan and others compete for value with their own sellers.




Check the eCommerce Strategy

Say what? What strategy?


When it comes to eCommerce, retailers play lip service to strategy. That is to say, using an old and reliable catch phrase, “they fail to plan and plan to fail”. eCommerce has been treated a little like a runaway train, it just keeps rolling alone and getting faster, but no one plans for it to crash. So little is done to strategise what comes next.


At the height of the COVID lockdowns some retailers were having a hard time keeping their websites up and running with traffic and sales growth going crazy. Some websites were seeing 200%, 300% or more increase is sales and traffic. Resources for website hosting, payments and logistics hit the wall. The stupidity, was that we had been talking about obtaining massive growth in eCommerce and digital for years and yet failed to be prepared when it happened.


Consumers had to move from instore to at home shopping and we saw the change drive online activity up significantly. But once lock downs finished and COVID risk declined the instore activity increased. This was nicely analysed by Monash Business School Consumer and Retail Studies.




Do we really understand online retail?

This may seem like a daft question however the real answer in general is, no we don’t. Within most retail management there is a significant lack of real eCommerce knowledge and experience.

There is often a real lack of understanding of who the consumer is in the business, what are the demographics and why do they buy online. No better example has been provided than the COVID lockdowns. None of the retailers, online or offline, were prepared for the sudden change in buyer behaviour. This knowledge gap means that very often online retailers make all the wrong decisions when it comes to design, user experience, customer support and marketing. The mistakes lead to deeper mistrust of online retailers. Although trust in online stores has improved, online retail and online sellers still rank poorly on most reviews of trusted businesses. Lack of contractibility, variable prices, poor shipping, returns, misuse of consumer data all add up to poor experience.


Interestingly most consumer confidence surveys generally rate traditional retail in the top 5 most trusted industries.


So why do two lines of businesses which perform the same purpose end at different ends of the trust spectrum?


Understanding the customer


It would seem that many online retailers really do not understand who the customer is or what motivates them to buy. Global services company PWC Consumer Insights Survey in 2022 found that consumers have an expectation of quality, choice and service. Yet we see online retailers cutting corners that impact on delivering to those expectations.

Issues impact the buying decision such as inflation and living costs, delivery and availability, environmental and social responsibility. Interestingly 42% of consumers identified governance as an issue with online retailer ethics, application of regulations and managing consumer data inappropriately.

PWC reported that 33% of Australian consumers surveyed used comparison sites more often and 32% would use a different retailer to their already trusted outlets to buy products.


Build an eCommerce Strategy


Where this is all heading is the primary need to have a strategic plan and to review and recycle that plan regularly. The strategy is developed to include:


  • Mission and Aims

  • Business Objectives

  • Business Alignment

  • Customer awareness

  • Marketing Requirements and Goals

  • Content Gathering and Management

  • Payments, Fulfilment and Logistics

  • Financial Management

  • Environmental, Social and Governance

  • Security, Data Protection and Privacy

  • Provider, Platform and Technology (and hosting if not SaaS)

  • Maintenance and Management

Make sure you have a market.


Who is going to buy your products online? The best place to start is your current customer base. Will going online make life easier for them? Are you going to save them time and money by allowing them to purchase online? You probably have a basic web site already; are you getting requests for online buying from potential customers? It is never truly possible to judge in advance whether a market exists, but there should be at least some indication of a demand for an online presence.


Unified Commerce


Connect your customers through multiple channels. This combines offline resources, such as store brands, channels with an online ecommerce presence and marketplaces. Consumers are looking for brands that they know and trust. They also like the fact that a business has a physical presence, a place where they can go if something goes wrong. Pure play online retailers will find that they have to spend a lot of money on marketing just to maintain awareness.


Integrate the shopping experience.


Consumers look to the web primarily for information; they may use the web site initially to find out about the product, and then chose the best way to buy. They will be able to do this more easily if their personal details and purchase history can be stored for subsequent purchases.


Cover the Core Building Blocks


Plan how you will deal with content, pricing, inventory, logistics, support, payment, returns, support, and security.


Fail to Plan and Plan to Fail



Some people find planning to be irksome and so delegate it or ignore it completely. But reality is that a plan and strategy is like a lifeboat and life vests, and you never enter uncharted seas, or any seas, without them. Protect yourself but more importantly protect what is important to you.


If you find it hard then seek help from a trusted advisor and be prepared for the disruption that can impact your business.



31 views0 comments

Recent Posts

See All

Comments


bottom of page