Unlike the century before, no one will look back and call the 2020s the ‘Roaring Twenties’. The groaning twenties, perhaps. Or maybe the tumultuous twenties. What is certain is that, as we move towards the second half of 2023, the ecommerce landscape is as challenging as ever.
Raconteur, in partnership with DHL, convened a roundtable of customer, operations and insights experts from global ecommerce brands to discuss what the unique conditions of the moment mean for their businesses today and in the near future. The discussion was pragmatic but optimistic, covering the ways businesses could prepare their organisations for future challenges while still meeting rising customer expectations. The role of sustainability, not just as an ESG concern but one that is at the heart of future ecommerce success, was also a prominent feature.
Defining the role of ecommerce in the omnichannel customer journey
The attendees all agreed that their first priority, and one that was most likely to see them meet future challenges as well as current ones, was making sure they addressed their customers’ needs head on. This is no small task. Consumers now naturally interact across multiple channels depending on preference and circumstance. Ecommerce often only makes up a part of that journey. The challenge in front of executives is to understand what role it plays and how to maximise its effectiveness within the whole, omnichannel customer journey.
“We’re trying to really build an omnichannel experience and make sure the journey is connected. Whether it’s paid advertising, social interactions or in physical retail environments, we have to connect the customer journey very strongly,” insists Ronnie McGibbon, head of conversion rate optimisation at Chiel.
That doesn’t mean being everywhere all the time. Organisations have to take a long, hard look at the realm of the possible. While ecommerce has the potential to offer a huge range of products and services, business pressures mean companies are actually starting to streamline their ranges, so as to create a tighter definition of their brand and its proposition. Tia Wallace, VP business development and account management ecommerce at DHL Supply Chain, explains: “A lot of our customers are streamlining the categories they participate in and focusing on the consumer’s identification with the brand.”
Moving ecommerce out of its silo
To meet the consumer where they are, the many moving parts of a business must come together. Silos need to break down, job titles will cease to be narrow and restrictive, and the hunt for talent that can transcend boundaries will become more urgent. Ecommerce presents an interesting test for the business, in that it unites the need for highly technical skillsets with a deep understanding of customer needs – sometimes within the same person. “The challenge is bringing the talent that has the technical knowledge closer to the customer and the category. How do you integrate that specialised knowledge when it has no insight into different channels or activations?” says Cicero Hennemann, head of digital hub at Reckitt.
Corie Hawkins, head of customer engineering, UKI retail at Google Cloud agrees. “It used to be okay for business people to not understand technology and engineers to not fully understand logistics, fulfillment or ecommerce. But we have to speak each other’s language, understand the voice of our customers and understand the North Star of what it is we’re trying to do. Then look at how technology enables that.”
Technology isn’t the be-all and end-all of future ecommerce strategy. It is, after all, only a set of tools. But how these tools are deployed has a big impact on the efficiency and effectiveness of an organisation. In today’s climate, it can make all the difference. “With consumer needs and technology evolving quickly, its important to stay prepared. Organisations need to keep up with the pace of change,” Claire Hennah, Beauty and Wellbeing chief customer and digital commerce officer at Unilever, advises.
She adds that, as retailers invest in their ecommerce platforms, they want their suppliers to be as digitally savvy: “Retail partners are asking companies and brands to match their digital capabilities. It could be uncomfortable if a company or brand isn’t prepared. We need to make sure we are utilising the digital and technology tools that address the real needs of the consumer and makes the journey easy for them.”
Diageo’s Siân Davies, global head of digital consumer insights, elaborates: “If we stay focused on the consumer, we can make the right bets with our resources.” Leaning on consumer insights and technology resources also helps inform the company’s sustainability initiatives. However, she is careful to add that every initiative has to feed directly into the company’s overarching aims, and Diageo doesn’t just leap on innovations like magpies on a bottle cap. One of the company’s latest initiatives is to use drones to monitor the need for water and fertiliser in Agave fields. But, she reiterates, “it’s about getting us closer to our sustainability goals, not just ‘hey, drones. Cool!’”
Building a sustainable ecommerce business
The economy may be difficult and the geopolitical climate uncertain, but this doesn’t mean businesses can afford to drop its purpose-focused initiatives in pursuit of pure profit. Sustainability is now as much of a deal-breaker as goods turning up on time or a mobile commerce website. With ecommerce activities come inevitable questions over the sustainability of deliveries, packaging, product formats, over-consumption and even product returns.
“Particularly for gen Z, there’s an expectation of sustainability,” Hawkins claims. “Something in the region of four out of five consumers consider it in a purchase, and half would pay a premium for it.”
Consumers may be engaged, but they’re not without a need to nudge their habits in the right direction. The days of ordering a ‘haul’ over the internet may be numbered. “People understand the implication of what online shopping means for the environment and they are making more considered choices. When something comes in a too-large box with lots of single-use plastic, they have something to say about it,” says Ellen Harkin-Goodbourn, global ecommerce operations manager at The Lego Group.
“They see that not only are they now financially responsible for returns, they’re responsible for the emissions too,” she adds. “We need to have a conversation about what that means.” Harkin-Goodbourn refers to websites that outline costs for restocking and transportation which may impact consumers’ decisions.
It’s not just making the right choice that’s important, legislation is making it physically impossible to tackle the volume of customer returns as they currently stand. DHL’s Wallace reveals: “We’re still seeing between 25% and 40% of product being returned. We’re facing restrictions on how much space we can build. Three-floor supersites are less likely now. There’s a genuine need for us to work with industry and customers to reduce that volume.”
Innovations, particularly in the CPG (consumer packaged goods) industries, are already showing potential ways of reducing ecommerce’s carbon footprint and unnecessary product shipping, but there is concern that the customer might not be ready for some change. Reckitt’s Hennemann reveals that water is one of the biggest transportation conundrums. He points to tablet versions of popular brands that could be posted through letterboxes as a solution. However, he questions whether customers are ready to mix their own solutions at home if manufacturers launch alternative to the current product formats.
Hennah agrees: “Concentrates are a great option to reduce the environmental impact of transportation. However, this is certainly a longer term strategy for this market, as it may take years of consumer education on the benefits and ease of mixing solutions at home.
Responsible ecommerce that makes sense to both the consumer and company is the key. Chiel’s McGibbon reveals that the company has been working with Samsung to relieve consumers of the multiple obsolete devices they have in junk drawers at home. “We can use that technology for developing countries and give an incentive for your new products. We’re trying to break down the barriers to help consumers behave more sustainably.” He also alludes to larger items and the need for consumer education so they can make informed decisions, whether it’s a TV or fridge. “We want people to really consider their needs when it comes to that purchase, so there’s no need to return or replace it.”
The elephant in the room for all attendees is, of course, suggestions of greenwashing or ethics washing. Ecommerce, in particular, must make the sums ‘add up’ when it comes to sustainable commerce – swapping a single car trip to a store for a delivery van trip to many and whether or not that offsets the packaging, returns and so on. Happily, from all the examples shared, it is clear to see that their ESG actions aren’t just a gesture, but baked into their very business processes.
Diageo’s Davies wraps up the discussion by insisting that all companies, not just the burgeoning ecommerce sector, must really go back to their raison d’être if they’re to weather crises, current and future. “A drive towards sustainability is about doing the right thing as a company. We have very public and ambitious targets on water use, diversity, equality, inclusion and community impact. We would be doing these things regardless because it’s the right thing for us to do to ensure we build a company for the future.”
The top challenges and considerations for ecommerce in 2023
“I think a key challenge is really deeply understanding the customer and customers’ wants and desires, says Corie Hawkins, head of customer engineering, UKI retail at Google. “It’s meeting customers where they are, and also understanding where they want to be.”
Ellen Harkin-Goodbourn, global ecommerce operations manager at The Lego Group, agrees on the importance of “taking into consideration what customers are actually asking for, rather than just making that assumption that what everyone wants is as quick as you can get it.”
Diageo’s Siân Davies, global head of digital consumer insights, notes that while investing in meeting customers where they are is crucial, “we also need to be cognisant of what the cutting edge is, and make sure that we’re in the right place to win tomorrow as well.”
“It’s important to have a presence that takes future consumers into consideration. If not, you will have a fundamental problem in shoppers finding your brand,” says Claire Hennah, Beauty and Wellbeing chief customer and digital commerce officer at Unilever. “For example, Dove partners with gaming developers to create games that are more representative of women because we know today’s 10-year-old girls are gaming and they are our future customers.”
Internal collaboration is key to getting the customer experience right, says Ronnie McGibbon, head of conversion rate optimisation at Samsung Electronics and Chiel, “from an operational perspective, it’s making sure all siloed teams are talking to each other, and making sure we’re sharing those different insights.”
Cicero Hennemann, head of digital hub at Reckitt, notes that ecommerce brands must be selective and strategic about their focus. “There are so many channels that you could be a part of, but strategically, thinking about your consumers, and where does it pay off to play in terms of channels, both from a commerce point of view, but also from a marketing point of view?”
Tia Wallace, VP business development and account management ecommerce at DHL Supply Chain, stresses how important it is to have the right talent working towards all of these goals. “For me, the key to success in 2023 is people and talent development,” she says. “And all of the topics that we talk about, from data to innovation to systems development, automation, warehouse development, fundamentally, we’ve got to bring the right talent in.”