You might be running an eCommerce business and not even know it. I often speak to business leaders who do not understand that they are largely eCommerce companies. Despite the fact that the bulk of their revenues are directly, or indirectly driven by their websites, they do not identify with the term. Why does it matter, you ask? I think Jim Collins, in his 2001 book <i>Good to Great</i> outlined the importance of understanding ones business, and how that understanding lead the most successful companies to greatness. Knowing ones strengths helps focus resources, direct strategy and leads to growth and success. If you don’t realize what’s fundamental in your business or key to its success, you will miss opportunities to grow and succeed.
A lot has changed since I started in eCommerce in 1996. Since then, I have sold over $250,000,000 in products online. I have seen countless well known, as well as start-up business come and go. And as much as it has changed, the web continues to evolve. Many businesses have successfully evolved with the change in web technology and the adoption of the internet, mobile devices and social media. Many, though have failed and many more will. Sears, the iconic retailer and cataloger is on the brink of failure. National consumer electronics and sporting goods retailers have all but vanished and corner grocery stores are being threatened by weekly meal providers like Blue Apron and Amazon’s grocery delivery service. Many of the past and present failures were the result of misunderstanding the environment, changes in shopping behavior and the businesses’ core strengths. This is why you have likely been to a Best Buy but may do not even remember Circuit City.
Creating value in your product, technology, software, etc. is important. However, the path to the dollar bills that keep the lights on and pays the salaries ends when the customer hits the “Place Order” button. The universe of things that led up to that final click fall into the realm of eCommerce.
My recent work has shown me how a large business that has been evolving from a direct mail and call center model, is struggling with its eCommerce identity. For example, the leadership structure in the business includes IT and Marketing but not eCommerce specifically. Although 85% of revenue comes directly through the website, with another 10% driven to the call center, the company does not distinguish between Marketing and eCommerce. If you consider these terms to be synonymous you are not alone. There are however, distinctions and seeing how this enterprise views eCommerce as a subset of Marketing, and on many occasions, beholden to the IT Department, there is little room to advance the business in it’s largest sales channel – the web, let alone evolve its social media sales channel. eCommerce requires some degree of technical capability and understanding. The internet, websites, online sales has some level of complexity to it. However, in the ideal modern eCommerce business, your IT Department is present to support the technology, platform and eCommerce team, as well as its typical strategic and tactical roles. However, it’s a mistake to allow the IT role to determine web technologies, platforms, or developers. Typical companies are quick to lump anything that sounds technical under the IT Department. Once couched in IT, it becomes difficult for the eCommerce to drive the business towards eCommerce goals. The same can be said about the traditional Marketing role. Without equally authoritative and competent eCommerce leadership, the traditional Marketing role will overshadow the eCommerce function.