By Alex Tait, Founder, Entropy
Last week I chaired a panel at eCommerce Expo on the topic of “How do companies need to organise people, processes and technology to maximise the ROI from digital commerce?”
The panellists included Sue McVie, Director of Direct to Consumer and Managing Director, Oakhouse Foods, Kerry Foods; Ant Ellison, ex-Commercial Director, Kellogg’s Europe; and Sam Gaunt, Head of Media, Lidl.
Here are some of the areas discussed and the panellists’ responses:
How should future-facing organisations set themselves up?
“Digital commerce blurs the line between sales and marketing. You need a commercial mindset for digital but it isn’t, of course, purely a sales or marketing channel. It is a mix of both. We’ve talked about needing the mindset of a General Manager. Yes, it is about how you sell, but also about how you communicate your brand. A GM mindset is not just one or the other.”
“Most organisations still have a gap between sales and marketing. What I’ve learned from DTC is the effectiveness of having marketing and sales reporting to the same person, so you can optimise the upper funnel’s effect directly on the sales piece.”
“The enemy of any form of effective and efficient marketing is siloed working. Digital commerce is often complex, specialist and populated by analytical people. The positives in this can be that you get a great level of expertise. On the other hand, however, this can lead to businesses optimising in a silo. It is important to keep the bigger picture in mind and to connect overarching objectives.”
“Fundamentally, digital commerce is a specialist area. In avoiding siloed working, RACIs can be problematic if, once created, they disappear into the background and aren’t referred to again. If done properly, though, the process can be as valuable as the RACI itself, bringing people around the table and keeping everyone talking. Leaders need a helicopter view to ensure that every pound works as hard as possible for the business.”
“When we set up our ecommerce team it was just four specialists in a corner. However, we soon needed to move from four people knowing about it to 180, and to demystify the area. A lot of agencies and consultancies make a good living out of complicating this much more than is necessary.”
Agility vs process
“As regards process, I’ve always found it useful to think in terms of providing guardrails for teams, of enabling them to work with freedom within a framework, rather than having anything too dogmatic. For example, who is going to drive implementation with the lines between sales and marketing becoming blurred? In my view, having clarity of process is a benefit rather than a hindrance.”
“The process needed depends on the scale of organisation you work in. As a smaller company we don’t have a lot of process. The access we’ve got to data allows us to be far more agile where we have clarity around roles and responsibilities. For example, if we spot a customer challenge we need to address, we start work on it as a small group round a table with a cup of tea. For us it is less about a formal process structure and more about the way we work. We don’t actually have a process written down.”
“I agree you can get strangled by complexity. This can make people steer clear of the area in question in case they have to spend all day working out acronyms. It is always worth wondering if it can be reduced to simple metrics. You need to spend a bit of time looking at that, but it is worth it in the long run.”
Getting buy in for digital commerce
“There are a number of challenges in getting digital commerce embedded in an organisation. One of the biggest I’ve come across is senior management who haven’t grown up with digital and don’t feel comfortable about it. “
“I always think case studies are useful, and if you are in an international origination, leaning on other markets is a great way to get them, as well as looking at competitors of course.”
“A case study I can think of was how to persuade an FMCG manufacturer to sell through digital commerce when retail was already so big for them. I was once challenged with, ‘I’m already investing in Tesco, so why should I pay again for selling through Tesco.com?’ The answer was to look at the basket size of an in-store sale vs a digital commerce sale.”
“[As a DTC brand] we do almost everything in-house, partly because we have lower budgets than many bigger FMCG / CPG organisations. We have to be more resourceful. For example, we have one colleague who does everything from an IT perspective.”
“For Direct to Consumer, is the elephant in the room how to bypass retailers without upsetting them? Not particularly. The way we manage that is just to have a separate DTC brand. Then, when appropriate, you can always have a conversation about how to bring it into the retail environment. It is harder to do it the other way around”.
“For DTC I have 2 metrics which are simply key for me: my cost to acquire customers, and customer lifetime value. At a very simple level, a lot of DTC brands don’t make money because it is costing them more than they make out of their customers. You need a sticky model.”