The crisis has many losers but also winners. Those with a solid eCommerce strategy are more likely to survive in difficult times. We have seen some very interesting ‘rebound strategies’ from retailers. With severe restrictions on what stores are allowed to do during lockdown, some companies have adapted and been innovative to take advantage of opportunities online.
- Curry’s PC World has launched a ‘Shoplive’ initiative where customers are connected to a staff member via a video link in an attempt to digitally recreate the in-store experience.
- John Lewis is exploring new digital services. This includes facilitating online sessions for customers who are self-isolating at home, including wellbeing, cookery and craft classes.
- Amazon’s Alexa can now answer tens of thousands of questions related to COVID-19 in multiple countries. Amazon is continuing to work to provide accurate and timely information to their customers from official government and news sources.
- IKEA has partnered with Alibaba and opened a IKEA virtual store on the Alibaba eCommerce platform Tmall.
- Asos has experimented with various AR solutions for years, but COVID-19 has accelerated the need for this and found a solution to‘digitally fitting’ models with new clothes using AI.
We looked at some key considerations brands need to be aware of when creating an #eCommerceStrategy
eCommerce Strategy Considerations
A data strategy
- There needs to be a commitment to harvest and action as much (useful) data on consumers, and users, as possible. It is clear that Amazon and other retailers will not give up their data on your consumers, so you need a clear strategy to build both your own data-sets, but also build your insight into how people shop your category on-line.
- Engaging in partnerships with existing bricks and mortar retailers to work with them to boost their eCommerce performance is a sensible approach. In the US alone, the acquisition of Shipt by Target, Kroger’s purchase of Boxed and Walmart buying Jet.com all suggests that this will be a focus area for growth amongst “traditional” retailers.
A technology strategy
- You will need to have the technology in place to be able serve your advertising and CRM at scale to individuals, meeting their requirements for personalised content. The advertising must be able to point to the right retailer and SKU, whether in a retailers site, or out of it.
- The technology solution will need to be able to collect, aggregate and harmonise data so that it can be leveraged across these delivery and measurement & analytics solutions.
An analytics solution
You will need to have a clear set of KPIs to be able to answer the following questions:
- Which channel to the consumer is offering the best return on investment? Why?
- What SKUs are offering the best return on investment? Why?
- What advertising/promotion is offering the best return on investment? Why?
- What time is the best to advertise/promote? Why?
- What are competitors doing that we can learn from?
A distribution and delivery solution
- The front end of eCommerce must link to the supply chain, distribution and delivery backend. Benefits, risks, mitigation, enablers and dependencies must be planned for all eCommerce strategies.
- Fulfilment of orders will become a key battleground for grocery eCommerce, with a focus on quality and speed across the supply chain through to the end consumer. In the US, companies are already developing technologies to process and pick orders in individual stores to provide hyper-local fulfilment for grocery orders.
A new sort of advertising model
- The cost per unit of each piece of digital advertising needs to be defined and a new model built to deliver it, in order for the ROI to grow.
- Any media strategy, optimised for eCommerce, should include a proportion of spend through online customer-owned media. The proximity to purchase, and personalisation delivered through Martech solutions, must be combined with improved measurement and traceability from the media owner to ensure effective performance.
What happens next?
With the foundations in place work can begin on defining the actual eCommerce strategy. Without the basics in place a strategy cannot be derived, or maintained, or evolved.
For FMCG brands, each brand must select one of the following strategies for growth, by looking at consumer U&A research alongside eCommerce data, and creating a detailed eCommerce persona, and customer journey:
- Penetration – is the fastest way to grow, to get more people to try the product? Who is the target?
- FOP – frequency of purchase – is the best way to grow the brand to get people to buy it more often? Who is the target?
- WOP – weight of purchase – is the best way to grow the brand to get people to buy more of the product? Who is the target?
- FOC – frequency of consumption – is the best way to grow the brand getting consumers to use it more often, thereby requiring more frequent purchases? Who is the target?
- WOC – weight of consumption – is the best way to grow the brand getting consumers to use more of it, thereby requiring more frequent purchases. Who is the target?
Once decided analysis can be done to ascertain:
- Best products/SKU’s (and any change to pack or design)
- Best channels
- Trading calendar and opportunities
- Best promotional tactic (pricing, bundles, cross-selling, partnerships etc)
- Best advertising route
- Compromises will have to be made to each brand’s strategy to accommodate a company-wide and category approach and the retailers “rules” and commercial contracts
Alongside the strategy, the tactics for support must be developed, by channel:
- How does search work on the platform?
- What will the brand presence in store or on the shelf look like?
- What is the right image, text for search?
- What is the competition doing and how do we beat them?
- Is there an optimal timing/calendar for the channel, or a consumer trend that may impact it?
Product offering; larger pack sizes, bundled offers etc. may need to be developed, tailored for the needs of the online shopper (and Retailer). New packaging technology to maintain quality through the supply chain or combination offers should be developed based on your insights into the shopper and the end-user.
- Category eCommerce U&A (how do consumers shop for your category, on-line)
- Marketing Insights
- eCommerce ROI analytics
- eCommerce advertising and media
- Technology and data strategy and management
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