Letâ€™s face it – if youâ€™re an e-commerce merchant youâ€™re juggling a lot of decisions across a number of disciplines related to technology, marketing, operations, finance, data, human resources, and the list goes on and on. But one common factor for most of us in our juggling is that we are looking to execute the initiatives that will drive the most business value the soonest while balancing the decision to execute an initiative with long term goals. The priorities and therefore initiative choices are different for every merchant and every company but todayâ€™s (2020â€™s) business environment factors are driving a ton of the decision making.
Here are some key areas of decision making we see e-commerce merchants working against already in 2020:
How to Become a Data-Driven e-Commerce Company?
No question – any active e-commerce merchant that has been serving customers for a year or more will have a ton of data. They have site usage and conversion information from core analytics. They have customer information. They have sales and product mix information. Those merchants well-versed in using marketing automation tools have a ton of data from those tools as well – especially if they are tightly integrated with the e-commerce platform. But many merchants are still figuring out how to use that data to make better decisions – figuring out what the role of data science will be in their organizations. The more advanced merchants will develop data-driven strategies that focus on leveraging many data points to support and advise their most profitable initiatives. For example some retailers have been able to harness showrooming, localization and conversion data to improve the timing and content of messages to drive sales. And thatâ€™s what they focus on because they are retailers – not boiling the ocean.
At the core of a move towards being a data-driven company is the notion that you cannot simply decide based on data to do something one way based on a snapshot in time of data. No. Truly becoming a data-driven e-Commerce merchant means frequently re-evaluating performance data to ensure that what youâ€™re doing still works and often using multi-variant (A/B) testing to test new ideas that might be more effective. This takes dedication and effort and this is where many companies struggle – resourcing for a data driven strategy is no easy feat.
Our recommendation would be to start small and build up to it. Donâ€™t try to use all your data at once. Most importantly, align what you use your data for with your under-arching business goals and define what success would look like so you can measure the output after a given period of time.
Is it Better to Change e-Commerce Platforms or Upgrade?
Platforms are engaged in an arms race of features and functions in order to induce investment from their customers. It can be time-consuming and expensive to engage in a platform selection and migration process. We see merchants that commit to improving their overall customer experience jumping head first into the process; we see other merchants, especially those highly confident in their non-digital sales channels, being more cautious and postponing the process or picking short term fixes / point solutions that only provide a fraction of the features and benefits of an e-commerce platform. For example, Adobe – Magento is in the process of sunsetting 1.X versions of their platform and the race is on to upgrade or look elsewhere. Since Magento is the worldâ€™s most popular e-commerce platform, this is a very important area of decision making happening right now.
Before engaging in the decision making process, itâ€™s important to define your core requirements. Many of the platforms do the mostly the same thing but are defined by some small but critical distinctions. For example, how complex are the products that youâ€™re selling? Many platforms can handle simple products (e.g. candy bars) but when you get into complex products with many variations (sizes, colors, bundles etc.), there are likely specific platforms (e.g. Magento) that youâ€™d be better suited for.
The same holds true for upgrades. Does the newer version of the platform cover your core requirements? If the answer is yes, upgrading is likely your best option. If the answer is no, itâ€™s probably time to migrate to a more robust platform.
Often, core requirements change over time as the business grows. Donâ€™t let the capabilities of your chosen platform get in the way of your businesses continued success.
Buy Into a Suite of Solutions?
Like the platform decision many merchants are looking into whether or not to invest in a Suite of tools owned by the same company or to leverage separate tools. Itâ€™s not just the $Billion+ companies struggling with this decision either; we see e-commerce merchants with well under $100mm in revenue looking at the efficiencies offered by the Adobe Experience Cloud – What is Adobe Experience Cloud? It’s a collection of best-in-class solutions for marketing, analytics, advertising, and commerce. All integrated on a cloud platform, along with service, support, and an open ecosystem. The value proposition of these suites (others are offered by Salesforce, IBM, Oracle and others) has a lot to do with efficiency and interoperability for the e-commerce world. But there is also a school of thought that keeping things separate and not relying on one â€œsuiteâ€ is a good thing for an organization. There are organizations that take that approach as well fearful of potential risk and cost associated with putting all â€œeggs in one basket.â€
How to Get Bang for Buck in Digital Media Spend?
The ongoing struggle of the digital marketerâ€™s media budget is no different in the e-commerce world than it is in media, publishing, or other businesses that rely on traffic-driving and digital acquisition. We find now that many e-commerce merchants are abandoning channels and marketplaces and focusing on a few that really work because of cost. There is backlash against Google, Facebook and Amazon understanding the game they make us play is geared for the giant B2C merchants not the B2B world and not the upstart world of entrepreneurs, inventors, and even well-funded disruptors. We hear things like â€œweâ€™re not worrying about Amazon anymoreâ€ and â€œAdwords didnâ€™t work for us weâ€™re focusing on content and organicâ€ a lot more. The focus is no longer â€œtest everythingâ€ but â€œtest reasonablyâ€ and focus on your brand, culture, content and the traffic will come.
Again, the key here is often starting small and focused and using data to inform your decisions. Try one campaign on one channel to test effectiveness against whatever benchmarks you have set. When youâ€™ve given that some time, run the campaign on another channel and see where your money is better spent. Repeat.
Of course, companies with huge budgets are developing methods of using AI and big data to predict the best use of marketing spend. Until that becomes more affordable, the majority of e-Commerce merchants will need to continue to keep testing and iterating with our digital media spend.
When Does it Make Sense to Outsource Your E-Commerce?
Of course this dilemma and area of decision making is not just confined to e-commerce but given that our industry is seeing continued growth, increasing labor rates and increasing turnover with shorter tenure. Itâ€™s hard to find great people and once you get them itâ€™s hard to hold on to them. Itâ€™s an employeeâ€™s market right now. Many companies try to have a single person running their e-Commerce effort but operating an e-commerce business takes a wide array of skills: technical, operations, management, software engineering and even finance skills. Youâ€™ll likely need a staff of people with all of these skills but not as FTEâ€™s – only a percentage of their time.
At Accorin, we help companies staff virtual teams of e-commerce experts supplying e-commerce merchants with the services and people that fit budgets and needs. There are many merchants doing anywhere from $1mm to $50mm and often canâ€™t staff a team of e-commerce experts. But you donâ€™t need to.
The Bottom Line
There are certainly more areas of decision making that can be discussed but these are the areas where we already see a ton of consideration in 2020. These are the areas that many merchants believe will drive growth and scale if they decide correctly.
We have a wealth of experience in e-Commerce decision making. Get in touch if you would like help with your decision making this year!