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"Ecommerce absolutely is becoming democratized … What do we mean by that? Well, it means the responsibilities are being shared throughout organizations. It's moving away from that very kind of specialized discipline — [that is] owned and completely run by the ecommerce team — now toward a much more universal one [discipline]." — Andrew Pearl, Vice President of Industry Insights, Profitero
If you had to create the perfect recipe for success on the digital shelf, it would likely include these three things: organizational design, capabilities development, and retailer-brand joint business planning.
At least according to the findings from Profitero — which creates ecommerce monitoring and intelligence solutions for brands — and its sixth annual “Ecommerce Organizational Benchmark Report.”
Andrew Pearl, vice president of industry insights at Profitero, joined a recent episode of the "Unpacking the Digital Shelf" podcast, "The Democratization of Ecommerce Is Picking Up Speed," to discuss what they learned from surveying 300 ecommerce leaders worldwide, how they’re integrating ecommerce into their operations, and what ecommerce key performance indicator (KPI) benchmarks will matter most in 2023.
Profitero surveyed and asked follow-up questions to nearly 300 ecommerce leaders across the globe. The leaders shared their perspectives on everything from organizational design to retailer-brand collaboration.
Pearl says the findings will allow brands to benchmark where their organization stands compared to industry peers but also assemble best practices for how they can advance their organization’s digital shelf maturity.
One of the report’s main takeaways is that ecommerce is becoming a core organization-wide capability.
"Ecommerce absolutely is becoming democratized … What do we mean by that? Well, it means the responsibilities are being shared throughout organizations," Pearl says. "It's moving away from that very kind of specialized discipline — [that is] owned and completely run by the ecommerce team — now toward a much more universal one [discipline]."
The report found organizations are taking two different approaches to this democratized model:
Pearl says the democratized model is the fastest-growing model for ecommerce organizational structures.
"But it doesn't mean it's [the democratized model] the right thing for everyone," he says. "It's absolutely important you do this really carefully and at the right stages."
Many ecommerce leaders fear moving toward a democratized structure too quickly, Profitero’s report found, particularly because ecommerce is still a small share of their overall revenue.
However, Pearl says they can lower this risk with three things:
"It's all about getting the basics of the digital shelf right. It’s about maximizing the uplifts you can get from great search performance, from great content, optimizing all those areas, adding video, and minimizing the negative impacts of poor availability."
— Andrew Pearl, Vice President of Industry Insights, Profitero
"If organizations drive that understanding throughout their organization — particularly [among] people who've never really had to encompass ecommerce before, ones who are more sort of dyed-in-the-wool in-store experts — if you drive that understanding, it can drive great engagement with ecommerce, and it makes them realize how important it is," he says.
The democratization of ecommerce may mean this function will no longer be the sole domain of one core team. However, it doesn’t mean ecommerce centers of excellence will be obsolete.
They’ll play a vital role in embedding ecommerce knowledge throughout the enterprise.
"Centers of excellence in organizations will be the bedrock of ecommerce progression in large organizations because their role is key," Pearl says. "It's their role to drive this understanding, to drive the training, to allow best-practice sharing."
Pearl also stresses that whatever organizational design brands decide to adopt, it’s crucial for them to take their time — and not just rely on ecommerce data and analytics to drive their initiatives. People and process transformation and effective change management may be even more critical since changing your org structure can take a year or longer to accomplish.
"Getting that structure, and getting the organization in place first, is absolutely key," he says. "Don't rush it. Make sure it's right for you at the right time."
Forging a stronger partnership between brands and retailers is also crucial to drive digital shelf success for both.
Of the ecommerce leaders surveyed, 77% said they were including ecommerce in their joint business reviews. However, one-third of this group said they were doing so only sparingly. Only 14% said they had created specific ecommerce goals, requirements, and budgets within their joint business reviews.
The report found that brands are collaborating with retailers primarily to optimize ecommerce content and then assessing their online product availability.
But Pearl argues that these conversations are just table stakes now and it’ll take incremental steps for brands to see changes on the retailer side.
However, that doesn’t mean these conversations and some guided e-category management aren’t worth the effort.
Going forward, every brand must proactively manage its relationships with retailers. However, to truly stand out in 2023, they’ll need to focus on other core areas of the digital shelf.
Brands can differentiate themselves in three crucial ecommerce KPI benchmarks this year: website optimization, building an ecommerce-first assortment, and product reviews.
Pearl says brands can lean on ecommerce analytics to optimize their website and drive conversions. Using data can help them develop a better understanding of how shoppers search and align their website taxonomy to these preferences to make it easy for consumers to click, buy, and check out.
Secondly, they need to create an ecommerce-first or ecommerce-only assortment. Pearl admits this is a huge challenge, but some brands have successfully done it. Ferrero, for example, has created an exclusive bundle of assorted chocolate bars for Amazon UK.
"That took about six months to do," Pearl says. "These things are time-consuming. They are expensive, but only about one in four manufacturers are doing it. We know that retailers are calling out for it. It may be tough within your business, but it is going to give you a point of difference."
Third, brands need to focus on increasing product reviews. Pearl calls product reviews "one of the biggest impact drivers" for brands. Retailers are using sampling programs to boost reviews, and brands should consider doing the same.
Though these tactics and hitting ecommerce KPI benchmarks can help to move the needle for brands, Pearl says digital shelf success all comes down to getting the basics right.
Currently, only 50% of brands are monitoring the digital shelf on a regular basis, Profitero’s survey found, so there’s significant room for brands to do better.
"If you don't get the basic execution right of the digital shelf — if you're not driving great content, if you're not meeting or exceeding the benchmarks for images, if you're not driving good availability and ratings and reviews — then you're unlikely to get it," Pearl says.
"It [your approach] has got to be data-driven,” he says. “It has got to be insight-driven. You've got to take a strategic approach … but you've got to deliver on what you say. You've got to get the basics of the digital shelf right."
To hear more of Pearl’s insights, listen to the full episode of "Unpacking the Digital Shelf."
