This week I spoke at 2 very different events in Dublin (DMX Dublin – Marketing Conference) and Retail Without Borders (Global Marketplace Conference London) and I thought it good to share my 16 observations with you.
1. There is no “strategy” for ecommerce. Consideration needs to be given to a roadmap and adoption of technology, but there is no strategy. Highlighted in part by the acquisition strategies adopted by @Amazon @Walmart @ebay and @Alibaba. They are buying new customers. Regular retailers cannot do this.
2. Tech has moved fast, but the human interaction or need for physical retailing still exists, albeit through better logistics planning. There is no end to end global solution to international ecommerce delivery. It does not exist.
3. The days of high double digit growth for stand alone websites are gone. There are exceptions @ASOS @Gymshark but for the most, you need to now lean on global markets for considered growth.
4. KPIs will need to change. Because of this slow down in growth, margin erosion is evident. Sales cycles are condensed to Black Friday and no one is bucking the trend. Or trying to. Growth can therefore only come from expansion – new products, or new geographies.
5. Investment patterns in technology and business systems and processes will change. Highlighted in a brilliant interview with John Lewis CIO Andrew Murphy. Forget incremental updates, retailers need a total tech reset to survive. Note the word survive, not grow.
a. “We have to get real. We can’t continue to be seduced by the short term of what is theoretically possible. We have to step back and take a holistic view of the role tech plays for our customers. You have to integrate and make the whole larger than the sum of its parts.”
6. China is a brilliant, exciting and explosive market but it is exhausting and tough. @Josh Gardner, founder of Kung Fu Data gave a brilliant insight into what it takes to trade on the main Chinese platforms. He went into great detail as to the level of manual, yes manual, work that you need to do just to play the game. An example I can recall was within TMall (I think) when you get a customer service pre sales question through a mini twitter style feed, you have 9 seconds to answer or the customer will bounce to the next best alternative. – 9 seconds !!
7. 2 years to break even in China. This is my estimation of how long it will take just to recoup your spend on breaking the Chinese market. Can you sustain it?
8. Irish attitudes to marketplaces amongst retail are completely blinkered. We just do not get it. It will hurt us quicker than we think, but the time for planning is now.
9. Attitudes in general to marketplaces need to change. This is where people go to browse. Plain and simple.
10. New marketplaces have fresh views. It was so refreshing to see James Storie Pugh of NewEgg talk candidly and let people know that their platform was not for everyone, and also it is not a silver bullet. Marketplaces need to be a core part of a broader strategy, that comes from within business. He went one step further and showed inventory gaps per category within their marketplace.
11. eCommerce as a word and expression should be banned and put to bed. IN order for strategies to be holistic and come from within the core of a business, we need to embrace it as a better way to do business – your customers are already there.
12. Cost reduction is the new sexy, shiny role that tech in ecommerce that people should be taking by the cahonies now. With margin reduction so difficult to avoid, start looking to ways to reduce your costs. You could do a lot worse than talking to @Bankhawk Analytics – watch these guys closely.
13. Direct to consumer (D2C) needs marketplaces. FMCG companies trying to do this stand alone and not part of a broader strategy, will struggle. AOV is too low and the point or purchase or the decision point does not demand a “search for brand x, reveal product, look at shipping, deliver and wait” mentality. All that work and you didn’t go to Amazon fresh?
14. Channel selection is difficult. This will boil down to basics like, all our data is English and we cannot afford translation yet – go to English speaking marketplaces. “We already sell on Amazon” – it is not the only game in town. What happens when your competitors are there too and you have done nothing to reduce your dependency. Diversify your marketplace selection fast. First mover advantage and different customers exist on different marketplaces.
15. I know nothing about Africa. Mall for Africa is solving a lot of the problems from the tech side. And they set a perception of a thriving, vibrant and educated customer marketplace.
16. Brands and retailers are afraid. Evident in abundance that there is an abyss in terms of information asymmetry. Invert this by talking to people, engaging with agencies and companies and partners who can solve these problems for you – going solo is not the right approach for most businesses. I have never been more certain.
The landscape for digitally selling your products (see what I did) or services has changed. The technology rate of change is rapidly increasing too. As Moore’s law taught us, that means the cost of it is reducing also. So don’t be afraid of tech, now is the time to evaluate your business, your capabilities and your objectives and get tech embedded into your business.