The evolution of ecommerce and organisational structure

Business strategy

It’s hard to imagine a time before the internet, when brands relied on the physical appearance of their bricks and mortar stores and smart advertising in traditional media to entice consumers to buy.

With the advent of the internet, this all changed. Brands had another way to grow their following, and even more ways to reach their audience. At this time, websites were acting as advertising vehicles, taking on a marketing role that was supported by a technical platform.

These static websites have now evolved into complex ecommerce offerings, with online and offline channels merging to provide fully integrated and seamless shopping experiences.

As a result, ecommerce’s place with an organisation’s structure has been disrupted.

Quite often ecommerce has found itself aligned with marketing, as it is seen as a direct-to-consumer channel. The ecommerce channel does double time as a retailer’s ‘store front’, acting as an advertising and branding tool in additional to taking on a sales role.

But is marketing the one and only place that ecommerce needs to be found?

Structure should follow strategy

Any organisational structure needs to be designed to best support the execution of the business strategy. Ecommerce has a role in brands, sales, and customer experience, yet it would be naive to suggest that it sits in an identical position in every organisation.

Each business has its own strategy and operating environment, therefore each business requires a different approach. Consider the differences between those businesses that are new to ecommerce, and those who are pure plays and considering opening physical stores.

Ecommerce needs to be transactional, while also being the touchpoint of a brand. It is a mechanism for the other non-transactional parts of the shopping process, such as customer research and inspiration, as well as the events of collection and delivery.

A good customer experience is determined by a combination of business functions – from price to promotions, to a supply chain’s range and availability of stock, to logistic’s delivery and collection, to the ease of use and navigation of the website’s design.

So the implications of ecommerce reporting to the ‘wrong’ place can be subtle, yet potentially damaging.

Inappropriate bias towards department objectives

There could be an inappropriate bias towards the objective of a department. Think about the situation where a standalone ecommerce team reports directly to finance – the focus of the ecommerce team is on sales value through the website, rather than capturing the overall business sales that are influenced by ecommerce, such as those sales that are made to consumers who search online and then make the trip to the bricks and mortar store to make their purchase.

Inefficient processes

Omitting operations could result in inefficient processes related to delivery or collection. This means more work internally, and potentially, a suboptimal customer experience.

An ecommerce operation without some marketing involvement may not place enough importance on understanding how, when, and why the consumer is using the channel.

So where does ecommerce belong?

The question of where ecommerce needs to report within an organisation is almost contradictory. While ecommerce is a distinct channel and needs to have its differences leveraged, and ultimately it has to be integrated and consistent with every other channel.

In my view, distributed reporting is important in a consumer centric organisation, because it reinforces that you are one brand, not many channels. It’s also important to remember that sales are not typically completed in a single channel.

Ecommerce needs to comprise representatives from all parts of the business that are responsible for customer experience – marketing, sales, operations, and logistics.

Technology also needs to be considered, especially for reliability and speed of the customer experience. As with most business deliverables, technology should be a support function.

There is no one solution.

Ecommerce should be developed based on what the customer wants from a product or service, and what experience the customer is looking for. Consumers are changing fast and therefore, so too should our business models that support them.