Despite the growth in the e-commerce channel, many retailers are still unable to make truly informed decisions regarding the strategic development of e-commerce in their business, as they are unable to effectively benchmark the performance of the channel.
This is the case for both retailers who think they’re performing well and those who don’t.
The issue
The big gap in most businesses is still around the strategy piece and the inability to make truly informed decisions in relation to the scope of opportunity presented by the e-commerce channel, and therefore the structure and investment that is required in order to maximise the opportunity and sweat the asset.
While many multi channel retailers are now enjoying seven, eight or even nine digit revenues from e-commerce, most retailers still lack real insight into whether or not the channel is as successful as it might be. As they don’t know what to benchmark against.
There are too few e-commerce players on the board
This lack of insight is partly due to the fact that e-commerce is not its own directorate in most businesses, and therefore there isn’t an experienced e-commerce practitioner on the board. As such, decisions made around strategy, structure, technology and investment can be ill-informed.
But to caveat this, there is still a big shortfall of experienced practioners who have the breadth of skills and depth of experience required to add this strategic insight at board level. And this is also often determined by what stage of the lifecycle e-commerce is at within each business.
The level of investment in technology and customer experience is often insufficient
A question for retailers: “How much would you invest in a new store shop fit?”
In most cases, it’ll be a very similar amount, if not more than you would invest in developing your e-commerce platform, and yet the latter will end up driving up to 20% of your turnover or, well over 10 times the turnover of any one store.
I hear the term ‘fit for purpose’ being bandied about frequently. But I wonder if that is entirely relevant to the e-commerce channel. As the lack of insight makes it a pretty tough call to determine, what is the benchmark for being fit for purpose?
So while many companies have made significant investments, what might your ROI have looked like if you’d raised the bar and invested enough to deliver a ‘best in class‘ website?