Developing a strategic e-commerce architecture
Dr. Sebastian Schoemann
Digital Transformation | Senior Partner at Bain & Company
The e-commerce boom continues. With the global market expected to grow by more than 20% CAGR by 2024 and COVID-19 lending a further helping hand, Kearney’s recent survey anticipates up to 300% growth in certain categories. What’s more, given there are now 2.7bn active users on Facebook and Instagram, 85% of shoppers beginning their product search online, and $29bn retail sales generated by email each year, it seems the sky’s the limit for the industry.
As yet more customers shift to online channels, companies have scrambled to launch their own e-commerce offerings. But as the saying goes, more haste equals less speed, and too often customer satisfaction is lacking because of some simple omission – say a missing payment method, lack of transparency on shipping options, or out of date website content. The result? Despite many corporate ambitions to become “consumer first” or “consumer-centric” (read our latest articles on this: LINK), more than three quarters of customers are not convinced by their online experience, meaning there’s significant room for improvement.
As we demonstrate in our new paper “Developing a strategic e-commerce architecture”, in the majority of cases getting it right means forging a strong link between the business strategy and technology architecture. To access the full content and research follow this LINK.
Establishing the pieces of the puzzle
Several big names are already on top of the game with the online consumer journey. Some examples include Gymshark with its much-vaunted influencer programs, Skullcandy’s unique online shop, Sephora’s Beauty Insider community, and Starbucks’ social advocacy campaigns. Where others are struggling, it tends to be down to one of two things: starting to build an e-commerce channel without first having a clear strategic vision, or continuing to prioritize strategy at the expense of having a strong, flexible technology architecture to power their operations and delivery. Quite simply, to establish a successful e-commerce business, you need both. A well-thought-out north star strategy will ensure a consistent customer experience both online and in-store, while a solid technology setup will provide the flexibility required to react and adapt to the constantly changing e-commerce environment.
Putting the pieces together
With our clients, we have developed a six-step framework to guarantee alignment between your overall business strategy and technology architecture. First, we define the strategic north star and identify priorities within each strategic domain. Then we translate them into a clear technology end goal and capabilities. From these outputs, we derive the requirements for the technical architecture at every step of the journey, and confirm any gaps in the current setup. Now we define the specific technology interventions needed. Last but not least, we look at the required internal change, and refine the operating model to align the technology, organization and culture. This is a critical step to prepare everyone for the switch to a flexible, scalable and customer centric e-commerce business.
There is still time to embrace e-commerce, modernize your organization and technical capabilities, and find new ways of creating value for consumers. However, setting up a new retail channel should not be underestimated. Our advice is to scrupulously review and invest in both your overall strategy and technology architecture if you want to succeed.
Our “Developing a strategic e-commerce architecture” (LINK) white paper shows how. Click here to download the full research and case studies if you want to find out more, or simply get in touch with one of the authors.
Authors