Every sales and marketing associate should understand how e-commerce works and its value."

From the makers of the most iconic brands to the newest emerging-product players, manufacturers are navigating an uncertain future as they look to capture the attention and loyalty of today’s omnichannel shoppers. No matter how long they’ve been playing in the e-commerce space, brands are testing, learning, failing and winning, most with a sense they are trailing the competition in e-commerce maturity. There is a sense that everyone else has it figured out, but the hard truth is no one, not even Jeff Bezos, has it all figured out.

For consumer goods manufacturers, remaining competitive during this fast-moving, transformative time in retail requires more than strategic brand positioning and investing in the right e-commerce talent, capabilities and media — it requires courage and the willingness to bail on recently implemented strategies, tactics and performance measurements that have proven to be ineffective within months.

With no choice but to move ahead or fall behind, manufacturers must define what success looks like to them, then organize and invest around that goal. To do that, they’ll need to make an honest assessment of their ability to not just compete but to grow in an omnichannel market. Answering these five questions may help.

Does your company’s structure create barriers to effective omnichannel sales and marketing?

Consumer goods companies on the leading edge of digital commerce have assigned cross-functional teams to help integrate e-commerce into all they do. E-commerce should be on the mind of every person, even those with no direct responsibility. Every sales and marketing associate should understand how e-commerce works and its value. They shouldn’t be thinking about the physical shelf and digital shelf, but simply “the shelf.” Brands attract shoppers and convert them to buyers across the full commerce ecosystem; a disjointed focus on channel versus total experience can lead to inefficiencies.

Financial, supply chain, brand design, positioning and packaging, marketing — no department’s strategy or tactic should be activated as a standalone but managed holistically. The way people shop is fluid between physical and digital, but the way most manufacturers’ teams are organized and work isn’t.

Are you resourced internally or externally to deliver learning, innovation and growth?

Most manufacturers are resourced to compete but don’t know what they need to grow. There are significant changes to large and small e-commerce platforms every few months and being resourced to keep up with changes isn’t easy. Talent with the right skills and experience to deliver growth in this new, always-evolving market is scarce and teams are often understaffed.

Organizations should be looking inward to upskill and develop their talent. Recognizing the market will continue to change at a pace never seen before, demonstrating a willingness to stretch and build up your internal muscle will prove to be meaningful to strategic positioning and employee retention.

Are your e-commerce goals realistic?

Executive leadership teams often have defined objectives and benchmarks and expect they can be assessed in real time. But in today’s retail landscape, tactics, metrics and measurement tools aren’t likely to be fully baked or are constantly changing or goals simply can’t be measured through standard KPIs.

Today’s omnichannel marketplace requires a more flexible approach to defining success and a willingness to jump ship on a strategy that doesn’t lead to overall growth. The most successful companies have firm total-business-growth goals and demonstrate agility and a willingness to pioneer uncharted territories swiftly to activate and adjust in real time, always keeping an eye on the big goal, not getting lost in the details.

How much should you be investing in retail media networks?

Spending strategically, not more, leads to more sales. It’s not surprising that brands are investing in the largest grocery retailers’ retail media networks — and most brands should be. But a better return may be had with smaller regional players, where brands can take advantage of less competition and relative quiet.

These platforms may be immature and harder to work with, but often offer better opportunities to grow a brand. And, when many platforms call for little interaction with a human, brand success with retail media is often tied to a manufacturer’s personal relationships at the retailer.

When budgeting for RMNs and digital commerce, it’s important to be realistic about what you should invest in now and what you should build toward. The e-commerce investment must be managed in balance with everything else you’re trying to achieve. Should be you investing more in the supply chain to support all points of distribution before investing more in e-commerce?

Despite the fear of missing out if you don’t have a Gopuff strategy or aren’t a leader on a top retailer’s platform, no brand can do it all. If 80% of total sales are happening in stores, just 20% of a marketing and ad budget should be in the online space. Some brands overinvest in the digital space assuming it will move the total sales needle, without fully understanding whether e-commerce investments are adding incremental share or taking from other distribution points.

Do your KPIs work together to tell a total performance story?

Data and defining KPIs are proving to be two of the hardest pieces of digital commerce. Data that would give manufacturers a full picture of what is being sold — and where and how it’s sold — is found in disparate locations, difficult to collect and clean and often simply not available. It’s nearly impossible to track performance across SKUs and platforms.

Often the chosen KPI itself is not insightful or is discovered later to be irrelevant to the brand strategy. For example, return on ad spend and click-through rates are important measures of a marketing campaign’s performance but don’t reflect conversion to sales or sales momentum.

Metrics that measure and reveal changes in market share, shopper loyalty and new-to-brand benchmarks aren’t easily available. Still, the sophisticated data and analytics tools Amazon, Walmart, Kroger and other major retailers offer brands — for a price — provide valuable data that brands can use to tap into opportunities for growth. But as these tools are constantly improving, brands are faced with another dilemma: How much do you invest in these platforms knowing in another month or six, there will be better tools that reveal your investments would be better spent elsewhere?

Sometimes, the best strategy for measuring the performance of an e-commerce initiative is: “We tried this. It didn’t help total growth. Let’s drop it and move on.”

It may be time to take a step out of the weeds and establish what success looks like for your brand given the mercurial state of the marketplace. We’re not yet working in a perfectly built retail ecosystem, one where checking the right boxes will surely lead to success. Successfully navigating today’s retail landscape means pursuing growth while always learning and adapting.

Erin Heikkinen
Vice President, E-Commerce Business Development
Advantage Unified Commerce

Erin Heikkinen oversees new business development and growth opportunities, with a focus on e-commerce and digital services, for Advantage Unified Commerce.

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