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"The digital capabilities required to execute in this domain are playing a crucial role to increase ROI [return on investment] and impact the shopper journey." — Mert Damlapinar, Principal of CPG Digital Commerce Acceleration, EPAM Systems
Digital now affects everything in commerce, and its impact continues to grow. According to Forrester, digitally influenced sales accounted for 59% of all U.S. retail sales in 2021. By 2022, that number had jumped to 60% — and by 2027, Forrester estimates it will climb to 70%.
The future that brands face is clear: To maintain any competitive edge, they’ll need to prepare for it now.
At least, that’s the perspective of Mert Damlapinar, principal of consumer packaged goods (CPG) digital commerce acceleration at EPAM Systems, a software engineering company that helps brands accelerate their digital transformation.
Damlapinar joined a recent episode of the "Unpacking the Digital Shelf" podcast, "Innovations and Best Practices to Accelerate Digital Commerce," to share his take on the ecommerce marketing strategies brands must implement to future-proof their business and how they can develop a growth strategy that positions them for digital shelf success.
Damlapinar says three main factors currently drive digital commerce acceleration:
Value-conscious consumers have compelled consumer packaged goods (CPGs) companies to optimize pricing and promotions. Marketing budgets are still below pre-pandemic levels, forcing chief marketing officers (CMOs) to make tougher allocation decisions and carefully prioritize their marketing spend to drive greater impact.
The online and offline shopper journey also is merging in ways that will force brands to streamline their backend operations to deliver a more seamless experience.
"The omnichannel shopping journey has been moving into a channel-less state," Damlapinar says. "And when I say channel-less state, I'm putting it from the consumer's point of view because they don't recognize those channels that we operate on a day-to-day [basis]. They're looking for the best assortment and most convenient shopping experience with the lowest possible price."
With more digitally influenced sales, brands must become more digitally driven organizations.
"The digital capabilities required to execute in this domain are playing a crucial role to increase ROI and impact the shopper journey," Damlapinar adds.
Brands may be hesitant to invest in ecommerce because it still makes up a smaller share of their overall sales compared to physical retail, but Damlapinar says this is misguided.
Over the last few years, ecommerce actually has become the top growth driver for many brands. Ecommerce doesn’t just affect online sales; it also drives brick-and-mortar sales.
On top of this, retail media has become the fourth largest advertising medium, right behind search, social, and linear TV, according to a 2022 survey from marketing research firm WARC.
Rapid ecommerce and retail media growth present both opportunities and challenges for brands. They must determine which platforms to prioritize, how much to invest amid budget and resource constraints, and how to measure attribution.
Damlapinar says these shifts call for brands to optimize their tech stack and effectively structure their teams to maximize omnichannel performance. Damlapinar outlined three ways brands can achieve this.
For digital shelf success, three areas are critical to address: siloed processes, channel attribution, and data leveraging.
First, it’s crucial for brands to break down organizational silos. What will work best for every organization will be different, but creating a center of excellence model may be impactful for many brands.
"I see ecommerce teams not being seen as only a sales function anymore. They're heavily included in digital marketing brand and media tactics conversations." — Mert Damlapinar, Principal of CPG Digital Commerce Acceleration, EPAM Systems
"Therefore, there's an ongoing evolution of the ecom team structure," he says. "We don't see those silo structures anymore where ecom sits only in sales or marketing. It's getting more decentralized, and it's getting more democratized across different functions with the support of a COE or center of excellence."
Secondly, as brands increasingly invest in retail media networks and other channels, they’ll need to figure out how to measure attribution to effectively assess the ROI of their investment.
Using disparate software-as-a-service (SaaS) solutions only will lead to more visibility issues, so Damlapinar says many brands are looking for holistic platforms to bring as many measurement tools together as possible under one umbrella.
Lastly, to drive their ecommerce marketing strategies, brands must harness their data's full potential. Damlapinar says the solution to this challenge lies in automated interoperable platforms.
"If I remember the stat correctly, ecommerce businesses need to make eight decisions per minute to keep up with the competition," he says. This requires robust, automated interoperable platforms. Instead of working in silos, cross-functional teams can use and collaborate with those integrated analytical insight platforms, where they can get recommendations for their next actions. They can operate in an agile way to save time and increase efficiency while driving their business goals.
"In this context, sales teams would use the same prescriptive analytics tools and dashboards as marketing teams, media teams, and even supply chain teams," he says.
Some brands are already moving in this direction. L’Oreal has effectively leveraged digital shelf analytics to bring its sales and marketing teams together and create actionable recommendations for these teams that drive its growth strategy.
"L'Oreal has developed a tech products portfolio called Beauty Tech for R&D [Research and Development] Innovation," Damlapinar says. "It’s come up with all these highly innovative solutions to meet the consumer at the contextual spot where they're consuming their content. This helps them [L’Oreal] grow the category and lead innovation in the category, and therefore have very, very meaningful and robust relationships with retail partners."
Mondelēz International, one of the world's largest snack companies, also has matured its digital capabilities with efforts, such as "Empathy at Scale." Through the project, Mondelēz brand teams optimized one trillion data points in Google Cloud to personalize product content for any campaign at the time and location of consumption — regardless of its origin and activation location.
Damlapinar says it’s possible for other brands to achieve these same outcomes if they focus on the right things, namely their operations, talent, and organizational capabilities.
Cross-functional teams must be able to understand and interpret what data and analytics support their everyday work. Brands need to empower their teams with unified, best-in-class tools to boost organizational effectiveness and expand their measurement capabilities to ensure they generate value from their marketing investments. A clear strategy and vision should underpin all these efforts, serving as a North Star for cross-functional teams.
Once all these things are in place, brands will be well-positioned to drive digital growth and meet consumers’ needs both on and off the digital shelf.
To hear more of Damlapinar’s insights on how ecommerce marketing strategies will accelerate digital commerce, listen to the full episode.
