Four Challenges Faced in the Evolution of eCommerce

Rötteln_-_Aufgang_zur_OberburgAt last week’s conference in Boston, I attended a session on the evolution of eCommerce and “Implications to the Mother Ship”. The panel included four accomplished individuals including moderator Kasey Lobaugh from Deloitte, Kevin Ertell from, Rick Watson from Barnes & Noble and Bill May from Abercrombie. Kasey kicked off the session with his viewpoint on eCommerce that included evolution through these four phases:

  • The Past:  Physical Stores — the customer comes to the seller
  • The Recent Past:  The need to sell online implemented in a separate but NOT equal way
  • The Present: Customers require a multi-channel experience and expect to be able to shop across multiple channels
  • The Future: Connected environment where functionality and connectivity are provided at the point of need.

Anyone keeping up with eCommerce today who has been around for 10 years or so can appreciate the first two phases. But what are the major challenges facing companies today that have an eCommerce focus?

Massive Operational Change

Looking back it’s easy to wonder why the “separate but not equal” approach was necessary. Rick Watson summed this up quite nicely by mentioning that the biggest hurdle to eCommerce adoption at B&N was integrating technology into the culture of an old line bookseller. I can only imagine. In this type of environment it is important to gain quick wins to prove a new approach to commerce was viable without being encumbered by legacy organizational thinking. Luckily for B&N (and Rick, I suppose), this approach proved successful and they were able to move on to bigger and better things. B&N continues to innovate by offering eReader connections to their entire eBook collection when visiting a B&n store. Is this working?  Well, eBook sales account for 3 times as much volume as their physical counterparts. Their competition, slower to make the transition, didn’t survive the eCommerce revolution.

Shifting Competitive Dimensions

When Amazon initially came on the scene, this totally changed the game for booksellers. As Amazon and others continued to offer more inventory, better customer service and free shipping, online and traditional retailers had to respond to the new landscape. B&N made the leap by competing directly with Amazon for online physical book sales and later added the Nook to compete with the Kindle. Pureplay eCommerce providers such as weren’t as immediately affected but a consistent message from all the panelists was a dedicated customer focus. They urged companies to “serve the customer need first and make it work organizationally later.”

People Skills and Talent

Billy May pointed out that hiring strategy depends on where you are in the maturity model. Early in the adoption cycle it makes more sense to hire eCommerce savvy individuals that may or may not have any direct experience in a particular business. Of course, as the eCommerce effort matures and needs to be integrated into the organization, skills that bridge the technology / business gap need to be acquired. Bridging this gap is as important as building bridges to your customers via new sales channels. It is essentially the foundation of your ability to support your customer through a sale across all channels.

Organizational Implications

There seemed to be plenty of examples of companies that have totally missed the mark regarding the organizational impact of serving clients across multiple channels. Quotes like, “You have it on your site for $15, why is it $30 in the store,” and “I bought it online, why can’t I return it here” were mentioned by various panelists. One example called out by Rick Watson illustrated the experience of a person returning an item to a B&N store that the store did not stock. The B&N associates first response was to send them away as they didn’t know what to do with the item. Rick, couldn’t understand this and wondered, “If you have someone in your store, why in the world would you send them away?”  Good point. He also urged businesses to take returns for any item carried via any channel, use a generic SKU for the return — anything — but keep that customer in the store. Another typical channel conflict that is still being remedied is a hangover of the separate and not equal days of eCommerce, that of internal cross-channel difficulties. If your organization is set up to focus on the customer, you’ll win. However, if you are set up to focus on which channel gets the credit for a sale, you lose. Simple as that.

In Summary

To sum up the panel in a few words, I’d say it was about building bridges. Bridges that need to be built between a company and customers, one channel and another, and one customer and another in the social shopping world. Maintaining a separate and not equal stance as eCommerce matures will find you building a moat —  and customers won’t repeatedly brave those waters.

One Response

  1. Mark Piening September 28, 2011

Add Comment