E-Commerce Demystified – Key Imperatives for the Next Normal (Part 2 of 2)

April 13, 2021

With e-commerce going from strength to strength and several new platforms being launched, the challenge for e-commerce players lies in cutting through the clutter. From payment gateways to return policies, inventory management to logistics, and more, e-com platforms have a lot on their plate.

The pandemic has boosted regional e-commerce enormously and effected profound and lasting changes in consumer and enterprise behavior. All stakeholders should revisit their strategies, operating models, and policies to make the best of this e-commerce driven #newnormal.

Depending on the company’s strategy (Sustain, Adapt, or Build), an improved e-com strategy would comprise the following actions across five capability areas:

	COMPANIES WITH ONLINE PRESENCE		COMPANIES WITHOUT ONLINE PRESENCE
	CAPABILITY AREA	RAPID INCREASE IN DEMAND: STRATEGY = SUSTAIN	RAPID DECLINE IN DEMAND: STRATEGY = ADAPT	STRATEGY = BUILD
ASSORTMENT AND MERCHANDISING	Ensure critical-product availability in these high-demand periods Reduce assortments and simplify processes in the short term	Ensure flexibility within a structured, data-driven process. Some players have driven growth by broadening their delivery assortment Optimize on-site displays to create maximum impact. Consumers are now more willing to buy products for delivery that they might have avoided earlier	Build standardized, structured product assortment, which can be limited at first for speed and simplicity. Baskets of essentials work well in groceries. Alternatively, retailers can offer more shopping flexibility but retain limited assortments
DESIGN AND TECHNOLOGY DEVELOPMENT	Ensure capacity to handle increased traffic and order placement. Ensure strong analytics like KPI alerts and Real Time dashboards to keep track and make informed decisions	Use low workload period to improve the front and back ends of website and app, leading to higher short-term conversions and more long-term adoptions	Leverage off-the-shelf tech tools to maximize platform-building resources. For e.g., readymade e-commerce platforms, analytics capabilities, and software to support agile working.
OPERATIONS, LOGISTICS AND CUSTOMER SUPPORT	Ensure delivery / fulfillment capacity Adjust delivery and replenishment frequencies, tap new suppliers and extend delivery windows, especially for high-pressure essential items Ensure transparency on KPIs Ensure timely and in-full deliveries	Review online-order-fulfillment models, including last-mile delivery and inventory management. Monetize idle capacity by leasing to others who may need it, E.g., transport fleet lease	Create fully functional, end-to-end operations, including warehouse optimization for e-commerce and new-team onboarding and training to handle order fulfillment. Finalize collaboration terms with carriers, train customer-service agents, launch bots across email, phone, and chat channels
MARKETING	Dynamic marketing spend alignment with evolving situations. E.g., improved communication with customers on delivery times, better coordination with operations to align orders with increasing capacity	Cost reduction through lower CPL / CPC with Search and Social analysis and optimization Drive traffic with simple measures such as SEO and improved content indexing Engage with customers through personalized campaigns Identify brand building opportunities	Build awareness for new online channels with dedicated launch marketing campaigns across offline and online channels, especially where demand is declining Use tailored on-site messaging, offers (such as free shipping), and optimized displays to signal Open-for-Business
TALENT, OPERATING MODEL, AND CHANGE MANAGEMENT	Assign resources in operations to address new capacity requirements and to ensure that employees are trained Identify and implement moves to ensure online and business safety	Adapt policies to ensure customer and employee safety, including operating model updates and policies for travel, safety, workday, sick-leave, and compensation. Offer employees leave of absence where required.	Focus on talent acquisition strategies to counter digital talent shortage Focus on good Change Management strategies for employees to adapt to new operating models and KPIs

With ecommerce set for even more prominence in the coming years, an even more pronounced shift to online will ripple through the entire retail ecosystem. Accordingly, key priority areas and activities for e-commerce players will include the following:

Accurate assessment of their current placement on the digital journey
Speedy and at-scale deployment of social media, third-party platforms, and e-commerce
Action across the five capabilities as above
The use of appropriate partnerships when necessary

The onus must be on finding the right balance between speed to market and cost efficiency. By embracing the right strategy and priorities, e-commerce companies in the region can compete effectively in the market and accelerate their e-commerce activities as the crisis abates.

References:

The United Arab Emirates (UAE) ecommerce Landscape 2020’, by Dubai Economy and Visa

BMI Research – Ecommerce Markets

MBG Ecommerce

Sauranshu is a Director with MBG UAE’s Risk Advisory practice and has extensive experience in risk consulting, especially in risk based internal audits, internal control systems and risk management. He has collaborated with market leading conglomerates across the GCC region to enhance their business performance through sound risk management, operational effectiveness, and enhanced governance primarily in the Retail, Hospitality, Government, Consumer Products, Transport & Logistics, Manufacturing, Healthcare, and various service sectors.

Sauranshu actively engages with clients to share leading practices, transform internal audit functions and internal control programs as well as drive awareness of the value of risk management to organizations.

Email us:- uae@mbgcorp.com

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E-Commerce Demystified – Key Imperatives for the Next Normal (Part 2 of 2)

April 13, 2021

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April 13, 2021

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