One of the better lights in 2020 & 2021, looking back, has been the expansion of ecommerce. For many, efficiently offering products and services online has been the line between survival and failure.
While Michael Healey, president of Yeoman Technology Group, expects this to continue in the coming months, he advised ecommerce decision-makers not to become comfortable at a Business Forward presentation earlier in the month as part of the Oracle NetSuite Now on-Air digital conference.
Healey informed participants that regardless of what occurs, ecommerce will continue to grow year after year and that if COVID-19 remains a problem, demand will be much higher. He advised businesses to be ready for anything.
Will Ecommerce Continue to Grow?
Healey advised businesses to determine whether the ecommerce boom they are experiencing is transitory or lasting.
For example, Amazon has reduced its Google advertising budgets during the epidemic, owing to difficulty keeping up with demand and shipping concerns. Smaller vendors have been able to capitalise on Amazon’s issue with demand, which has also afflicted other ecommerce behemoths, but Healey cautioned that this is only a temporary condition.
In other words, don’t expect your ecommerce sales to remain stable until brick-and-mortar retail outlets reopen. Amazon and others will eventually restart their normal marketing, and that chance will vanish.
Another transitory source of ecommerce development has been increasing online sales from existing clients. When stores reopen, those sales are likely to rebound to regular levels, although new consumers can mean more ongoing revenue.
“If you can attract more people to your website that have never been there before, that to me is the big [chance to maintain growth],” Healey said.
Pandemic-Related Challenges Are aplenty
Companies have learnt how to deal with ecommerce spikes in recent months, a knowledge that will serve them well as the holiday shopping season approaches. However, other obstacles have developed throughout the pandemic, including last-mile delivery issues and unexpected cost hikes, and Healey advised businesses to address these as soon as possible.
Healey stated that delivery performance had taken a notable blow throughout the pandemic. As a result, while online merchants could rely on FedEx or UPS to manage all of their shipping needs last year, it may be prudent to have agreements with as many logistical partners as possible now.
“You have to be able to disperse this risk while also avoiding the recognised concerns,” he said, alluding to strong evidence that last-mile issues have resulted in deliveries that normally take three or four days now taking a week or two.
Healey advised charting out consumer locations and delivery schedules and analysing all choices.
Meanwhile, unanticipated expenditures are sneaking into practically every level of the process. Warehouses are operating at 15% to 20% below capacity due to manpower shortages, and major recruiting and hiring issues make correction unfeasible. Air and ocean shipping charges have skyrocketed, and supply chain delays have arisen for various causes, generating a range of complications.
All of these cost-related difficulties, according to Healey, have companies questioning if they should hike shipping rates.
“That’s the million-dollar question,” he admitted.
Atypical Approaches for Atypical Times
According to Healey, even marketing must be rethought. He cited a prominent retailer that chose to eliminate a 10% discount from half of its brand-name merchandise in August. The brands that retained the discount saw a 4.4 percent boost in sales, while those that lost the discount saw a 1.4 percent increase. In other words, the revenue increase was insufficient to justify the discount.
While such operations are unlikely to be effective in regular circumstances, businesses must consider unconventional strategies in these unusual times.
“If you’re in a situation where expenses are high, capacity is restricted, and demand is increasing, you have to make the difficult decision of what to do with your prices,” Healey stated. “You ought to be testing.”
It’s that mindset — “let’s try anything that works” — that’s distinguishing the businesses that are thriving from those that are wilting during the pandemic.
In other words, as the year 2022 has kicked off, Healey’s message is clear: leave no stone untouched.
If you missed them live, you might watch the product keynotes, presentations, and customer stories on demand.