Most brands aren’t ready to win in e-commerce, report says

Linda J. Dodson

Table of Contents

Dive Brief:

  • Brands say they are not fully prepared to win in e-commerce, according to a study presented last week by Profitero and Kantar. Just 17% said they are ahead of the curve or leading in that space, while 71% reported they have a strong focus in e-commerce, but are catching up to or keeping pace with competitors. The study was conducted with 200 brands worldwide between September and December.
  • Many brands said they don’t have dedicated e-commerce strategies. While four in 10 said company leadership has identified e-commerce as a strategic priority, their companies don’t have dedicated goals or customer master plans to make it work.  
  • The two biggest challenges to brands in e-commerce are pricing and profitability — a major challenge for half of the brands surveyed — and adapting their supply chain to meet the needs of e-commerce, which 40% called a challenge. Almost a third have no dedicated e-commerce pricing strategy, while 41% don’t have a team or set of processes to handle e-commerce orders.

Dive Insight:

As coronavirus fears have more Americans hunkered down in their homes, grocery e-commerce sales are through the roof.

According to a study released last week from Brick Meets Click and ShopperKit, 31% of households — roughly 40 million — have shopped for groceries online in the last month. The number of digital shoppers has more than doubled since August 2019. Additionally, 30% of the people who hadn’t bought groceries online in the previous month said they plan to do so in the next month if the virus scare continues.

For those brands that are e-commerce ready, this is a chance for them to cash in on this rapidly growing sales channel. For those that are not, they are seeing firsthand where their weaknesses lie. Profitero and Kantar’s study, largely conducted before the world experienced COVID-19, reveals many brands treat e-commerce like another branch of their existing business instead of an entirely different experience.

In addition, the study found many brands don’t take advantage of what e-commerce can give them. Profitero and Kantar found 61% of them only use sales data to inform e-commerce strategy and insights. These brands aren’t fully taking advantage of other data that comes from e-commerce, such as digital shelf information or data about the preferences and buying patterns of shoppers themselves.

Profitero and Kantar didn’t just highlight the weaknesses that brands reported in their strategies. It also used its report to make recommendations to brands that are struggling with e-commerce. The top recommendations are treating e-commerce as a unique business channel and creating specific goals, a custom team and a dedicated strategy. Many companies have e-commerce reports to both sales and marketing, which allows better tracking of revenues and opportunities, as well as prioritizing a specific marketing message around the online channel.

The e-commerce analytics report also recommended that brands start taking advantage of different unique opportunities only present in the digital sphere. Item presentations and descriptions are easily changed and can be optimized based on customer behavior. Additionally, predictive analytics can help show what demand will be — which can be used to expand interest or enhance marketing efforts.

And while the coronavirus threat will eventually pass, it’s likely that interest in e-commerce will continue. In the Brick Meets Click and ShopperKit report, 43% of respondents said they were extremely likely or very likely to continue online grocery shopping in the future. Nielsen analysts also have said online shopping habits formed during this outbreak are likely to last. The time is now for brands to improve their e-commerce strategy, focus and management, or else they will miss out on opportunities for new sales and deeper customer relationships.

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