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Engage us a bit below warp speed Mr Sulu​ - an ecommerce state of mind

#ecommerce As I look forward to the #ecomlive event in Belfast over the next 2 days, I thought I would pen a few, loose words. In Ireland and the UK we are reaching a plateau of sorts. Our consumers follow the hedonistic mantra of better, faster more and we think with this frenzy that we need to follow. Time to slow down and ask yourself, is your strategy achievable? Or more simply put is it the right strategy given what we now know about the world of eCommerce? Original version written in 2016 - some updates added.

37% (UK focus)of industry leaders believe the market is reaching maturity. Mobile sales growth has been static for 2 quarters now at 42%. There is Black Friday, but to the detriment of the rest of year? Our logistics partners are being asked to squeeze the extra capacity for our lack of growth throughout the rest of the year. Then we blame their inability to plan?

Interesting is the increase in conversion rates in mobile generated sales, which tend to be low. Leading tech companies in the world have realised this. Up to this year, sales through tablet have been higher on tablet than on our phones. Fast forward 6 years and this 1 metric may be the single biggest change we have witnessed. Like seasonal, migratory birds, everything else is as you were.

We have seen the huge disparity now between the actual sales of mobiles versus tablets and thankfully our tech buddies have solved a problem we could not affect through their producing phones with larger screens, boosting conversion rates quite well. Our well-intentioned designers could not have done more it seems, unless the underlying tech changed.

The real change agents are doing the work for us, they create the difficult online economics we have to deliver against. We are closer to the customer than ever, we now know less. Breeding loyalty is becoming harder, the lines between which people buy products online has become more blurred. Like all industry, the large few will drive the rest. Going against the tide is popular but not always right. There will be the exceptions, those who prove me wrong, but they will be the exceptions.

Truth told, not many. Investing in standalone products is almost impossible to scale. Investing in markets, less so. An inability to connect all the dots makes its hard to justify spending on behavioural merchandising, as an example. What I saw last week, was not negative, rather it vindicates my beliefs in ecommerce. The fundamentals are still the most important. Get these right and you can build for scale. It is why we see the same faces at such conferences, selling the same things.

Look to the guys with scale and see what they do well:

Build logical processes in your business. If it doesn’t flow right offline, it won’t flow right online. At some point a customer will be the person to feel the pinch if we get this wrong.

Do not over promise 1 – just because Amazon prime has free next day delivery, don’t feel you have to. 43% of UK customers are happy with economy delivery – 29% want next day.

Do not over promise 2 – if you cannot afford to absorb this cost, then don’t. It is hard to retrench from. Encourage a bigger basket and make customers work to get to a threshold if you have to. This is ok to do and establishes value. I’m yet to see this not work.

Understand your cost models and the marketing tactics your employ. The old reliable email continues to be the biggest spend but also the biggest direct revenue driver away from adwords. In 2014 email had a 14% contribution to revenue versus <1% from Social Media – so to that end we move on. This number is north of 18% in 2022.

Be careful in recruitment and make sure you are hiring for the right reasons at the right time. There is also, and I cannot believe I am saying this, room for agencies. Adwords specialists are hard to get in and keeping data clean on the way into Google is becoming even trickier. Systems enablers are now a requirement not a nice to have. For scale, that is. With the news of WPP moving into "full service ecommerce" this "room" is now wide open.

If you have an agency, challenge Basic Google analytics will have enough information for you to ask, why and how. ROI from your adwords is directly attributable to your level of control and understanding of the platform you are buying in. (2022: Facebook performance has died and RMN growth since then has been exponential and not at the request of the brand - bear that in mind - this is a retailer initiative.

The expo further underpinned my beliefs that we have time to build more robust platforms, we have time to deliver a strategy for growth and in a way that is not dictated by clients. It is not always "Engage us for warp speed ahead Mr Sulu"

As with all other areas of commerce, I will be watching to see where key strategic alliances will emerge – the big guys know how and why to do this. Or as I refer to it in 2022, Partnerships. Leverage what you each do well for as long as is required to squeeze a new market or product or until you learn what you need to. Symbiotic relationships like this allow us to think differently about how we do business or more why we are not doing it. Protectionism in this industry is futile. Data is always exposed, don’t let your business be.

It’s like Marty Scorcese said, “everything is derivative” .. we need to look to the past to shape the future.


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