x
READY TO BECOME A MEMBER?
Stay up to date on the digital shelf.
x
THANK YOU!
READY TO BECOME A MEMBER?
THANK YOU!
“Just think about the pace of change in the last 12 to 18 months and what that's done for teams managing an ecommerce channel. If we think about FMCG, maybe ecommerce was 5% of sales, which is meaningful but not enough to rally an entire organization.”
“When that doubles in 12 months — or whatever the dynamic is in your organization — it prompts a question to look at your team to say, ‘Do I have the right people in the right seats?’ ‘And am I supporting this channel enough and in the right way?’”— Christina Vail, Director of Client Strategy at Profitero
Discussions about winning on the digital shelf often center around tools, tactics, and technologies — not really people.
However, building your company’s ecommerce capabilities also requires building up the people who support it and arming them with the skills and resources they need to successfully navigate this constantly evolving landscape.
Massive ecommerce growth during the pandemic has led to a growing question for ecommerce executives: How should they organize their teams and processes to drive the best results? Profitero has sought to answer these questions with its latest report, “Building a High-Performance CPG eCommerce Organization.”
Christina Vail, director of client strategy at Profitero, joined a recent episode of the “Unpacking the Digital Shelf” podcast, “New Research on Commerce Org Design,” to share her insights on how companies can design their organizations to advance their digital maturity and win in ecommerce. Here’s Vail’s perspective.
The pandemic led to a dramatic increase in online shopping, forcing companies to stand up new capabilities or lean deeper into their existing digital channels, according to the United Nations Conference on Trade and Development.
Vail says this event has led many companies to rethink their commerce org design.
One of the executives Vail interviewed, Howard Friedman, the president and CEO of Post Consumer Brands, summarized the mindset shift required for organizations in this way: “The sooner we stop talking about ecommerce as a sales channel or marketing tactic and talk about it as a business, the better off we're going to be. Explain it to me in the language of profit and loss. Talk to me in the language of business before you talk to me in the language of the ecommerce dark hearts.”
As Friedmand argues, companies need to more deeply integrate ecommerce into the fabric of their business. Vail agrees with that notion.
“It's not just a marketing tactic and it's not just the sales channel,” she says. “There's a P&L that should be tied to this business and managing it as such is going to significantly enhance your ability to rally an organization around you.”
Vail says there are several things companies can do from an organizational design standpoint to build their ecommerce capabilities.
“As we had many conversations with senior leaders, it became super apparent that a key way to drive your maturity and to really enhance your organizational structure is to educate everyone.” — Christina Vail, Director of Client Strategy at Profitero
This means separately educating the C-suite and everyone else within your organization. Talking about ecommerce in business terms, rather than some esoteric tactic that’s separate and apart from the rest of your business, can foster more meaningful conversations with senior leaders and progress within your organization.
It’s also important to educate the rest of your organization about why it’s necessary to focus on ecommerce now, the retailer dynamics driving this shift, and the business process changes that will be required to win at ecommerce.
“Any process where you're trying to get people to change, you want to orient them as to why,” Vail says. “So, start from a place of ‘let's educate.’ Let's talk about the channel. Let's talk about shifting consumer behavior. Let's talk about how retailers are changing and how a significant portion of sales are going through digital channels for your big click-and-collect customers. Help them understand the why.”
Profitero’s report outlines six stages of ecommerce maturity within organizations:
While the report goes into more detail about the ecommerce maturity curve, Vail says it’s clear that organizational design must directly map to a company’s ecommerce maturity.
During the first three stages, Vail says companies are just beginning to put things in motion and build their ecommerce capabilities. At this stage, ecommerce professionals are usually embedded within a larger team, such as a sales or brand marketing team. As your company progresses to the middle stages on the ecommerce maturity curve, you then can benefit from testing and experimentation.
“Merchandise is when you enter middle maturity. And what we mean by merchandise is to identify a team that you can start to pilot some of your test-and-learn ideas and then merchandise their success,” Vail says, adding that this serves multiple purposes, including driving healthy internal competition, highlighting good work within your organization, and uncovering ideas you can scale and optimize.
From here, organizations can grow to ingrain ecommerce deeper into their business and potentially create a dedicated team who will own this channel.
Vail says that in the grow stage, larger organizations should consider having a dedicated, multi-disciplinary ecommerce team to advance their maturity. Profitero calls this an “ecommerce sidecar” — or essentially, an ecommerce mini C-suite that can work collaboratively to own and then fully integrate this part of the business into the enterprise, while maintaining some degree of operational independence.
This team also can maximize your organization’s ecommerce growth opportunities and evangelize digital throughout the company.
“To be successful, it's [ecommerce] a business. It is not just a marketing plan. It's not just a sales play,” Vail says. “You need multiple functions that are part of this. We call it a sidecar in the report, but it’s typically a separate business unit because you need those people all together, rowing in the same direction and focus on solving a business problem — not just driving sales.”
The teams with the best org design are further along the ecommerce maturity curve. This puts them in the position to create and benefit from a center of excellence.
“We can tell you the best teams have got a COE [center of excellence] that's handling capabilities and training, and then they've got it integrated into the business units,” Vail says. “Ecommerce is just kind of fully embedded. If you're at stage one of maturity and you try to race to stage six, it's not sustainable because you don't have enough internal capabilities developed.”
In other words, learn to crawl before you can walk.
Companies can nurture both internal talent and hire externally to round out their team, but the most important thing is to have intellectually curious people with diverse skills, a mix of people who deeply understand your business processes and culture, and those who can bring technical knowledge and industry expertise to the table.
Vail says ultimately it’s important for organizations to be more nimble. Creating dedicated “sidecar” ecommerce business units can help with this.
“In a smaller channel relative to total sales such as ecommerce, you want to be more nimble,” she says. “This is going to change every few months. The best practice is going to evolve, so you need a team that can move quickly.”
Ecommerce is constantly changing, so your org design will need to evolve, too.
“Keep the end in mind — this is a journey on how you elevate ecommerce in your organization,” Vail says.
Listen to the full podcast episode to learn how companies can successfully advance their digital maturity and win in ecommerce.
