We live in a time where our customers, what they want, and their expectations of a brand are constantly changing. In fact the gap between what customers expect and what traditional brands are often offering has never been wider.
There’s a shift that is taking place – from being product-led to customer-led. As a result, owning not just the customer relationship but the customer experience has never been so important. And this is one of the reasons why so many companies are rushing towards direct to consumer e-commerce – to own the experience from start to finish.
At a recent roundtable, we brought digital and retail leaders together to explore the opportunities and practicalities of taking the direct route to your customers.
Joining the discussion were:
Anette Hasling Jaeger, Chief Strategy Officer EMEA, Dentsu Commerce at Dentsu Aegis Network
Filipa Neto, Senior Innovation Principal at Farfetch
Heike Zellerhoff, Manager Sales & Relations UK at shopware AG
Ian Cassidy, Director of Commerce, CTI Digital
Ollie Marshall, Managing Director of Maplin Electronics
Jasper Bell, Experience Strategy Director, VCCP
There has been a paradigm shift in online shopping:
Anette: “Before Covid hit the world, online shopping behaviour was growing at a fast pace. But what we saw in the months after Covid hit was an extremely steep peak. It has been estimated that the e-commerce development that took place in just 90 days was the equivalent to 10 years [of pre-Covid development]. Other surveys suggest up to 60% of consumers have actually tried a new brand or shopped on a new channel because of Covid restrictions. And the scary thing – for those companies that have already spent a lot of time building loyal customer relationships – is that a lot of these consumers are saying they intend to keep doing so post restrictions.”
Filipa: “Digital is no longer a nice to have or something brands can question. This is the only place where customers are. There is a new found urgency to ecommerce.”
“What was relevant six months ago, one year ago, is not the same kind of experiences and technologies and services that we are now shaping. Things have moved at a rapid pace and that is being driven by the consumer.”
Filipa “Personally, I’ve been looking a lot at virtual. I think that’s a very exciting space. I love craftmanship and I love beautiful products. But not being able to go to a store, I think about how can I be close to the products?”
Jasper “Certainly some of our clients are going to realize the need to bring virtual product experiences to the fore, because people need to feel like they’re experiencing the product.”
Get your priorities straight…
Heike “Start with an MVP and get your project out there. But it’s also very important to keep that mid to long term perspective in mind. To ask yourself, where do you want to scale and what kind of business do you want to become?”
You don’t need to know everything yourself. Have your priorities straight and know your product and your brand. But when it comes to bringing this online, talk to the right people who have experience and can help you bring it to life quickly.
Ian “We traditionally find in a B2B organisation that it’s the sales director that owns the B2B commerce channel. Whereas in a D2C environment, you usually have a marketing director or an e-commerce director responsible. So when it comes to really making that shift and going direct to consumer, we usually recommend that the organization first sits down and understands what it is they’re going to need to go direct to the consumer – and who that will involve. So typically, we’d recommend that that would be your sales director, marketing director and operations director.”
Jasper says find your niche “you’ve got to have a sense of where you are in the market. Where you see you could compete through experience. The build should come from an idea about what you want to do for the customer. Then start testing that.”
You can’t predict the future, you’ve got to move forward based on what you know, and then start to build out from that point.
Ian “Platforms like Shopware have an ecosystem of partners where it’s very easy to ask them which payment providers to work with, which shipping providers to work with and make sure that you’re building something with technology that’s tried and tested and works together. It will save you a lot of pain in the long run.”
Ian “It’s important that the business understands what they’re putting into this and what they’re expecting to get out of it, because ultimately that’s going to inform the decisions that you make… whether you start with marketplaces and build e-commerce in the background or think big immediately.”
Think about how much current circumstances are affecting your goals.
Ian “Is it a short term objective that you want to sell direct to consumer? Post covid, are you happy to go back to B2B and remain a B2B business? If not, you need to think about how those B2B accounts are going to perceive you going direct to consumer and ultimately integrate this into your pricing strategy.”
Understanding what your cost price is on your products and recalculating is vital.
Ian “You may find that when you look into some of your product categories, ultimately you’re making a very small margin, on some of them.
You’ll need to start having conversations around payment gateways. Traditionally in the B2B environment, not a lot of customers are paying through credit and debit card. So you need to make sure you’re having those conversations with the credit and debit card providers as well.
Ian “There’s lots of e-commerce platforms out there. Some of them work really well for certain product types and some verticals, and some of them ultimately are better than others.”
Heike “It’s not one or the other. It’s a combination of making it all work and integrate, allowing for it all to speak to each other.”
It’s important that you pick a platform that can deliver to all of those channels, that can integrate into social, into your point of sale, into your marketplaces, into your ecosystem such as payment gateways, ERP solutions, etc. And if you have that platform, you have the power of owning all of the data from all those different channels.
This means you can target and profile your customers in a very granular level and always make sure your products are relevant and you’re delivering that customer experience that your customers actually want.
Ollie “We try and be available on both marketplaces and our own e-commerce site. However, the types of products we may put on each are influenced by margin. So really understand what your costs are and what your margins are to then figure out what you might do. So when it comes to, say, Amazon, eBay etc they are almost double the cost in terms of transaction as through our own platform. However, you have access to millions of customers and you don’t pay for customer acquisition, which again is a massive cost.”
Anette “There’s a high risk that a lot of these decisions will be an emergency response in order to gain some of the losses back from Covid. Unfortunately, decisions made quickly can end up costing more in the long-term.”
Filipa “We don’t think that everyone should have the same strategy. We are just fine tuning and narrowing down, building together. Ultimately, it is important that you diversify as we don’t know what’s coming next.”
Ollie “You don’t have to do everything and to pull every lever or turn on every service from day one just to get going, you very much can pick that core platform, just the minimum you need to start trading and then the learnings will come from that and you can build from that.”
To watch the full session click here.
Good luck!
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