OMD Agile Commerce – How to Win the Shelf in a Digital World
“So, eCommerce…how does that change things?”
Despite 18 years in Digital and eCommerce, I cannot remember a period when eCommerce was a hotter or more ‘transformational’ topic in the industry, with the CEO’s of many of the largest global brands announcing their focus on the “infinite possibilities” of eCommerce, as Pepsico’s Indra Nooyi put it.
The intense interest in the changing shopping landscape gives us a great opportunity to talk about some of the key themes in eCommerce, the work we’ve been doing with our clients over the last few years and our OMD Agile Commerce solution.
Agile Commerce – you might say its OMD’s answer to the question of ‘how eCommerce changes things.’ But before I unpack OMD’s solution, let’s take a step back; what does the current eCom landscape look like, and is the question at the top of this page even the right one? And most importantly, what does ‘Agile’ really mean here?
The Long Tail
Amazon is 24years (!) old and its disruption of the books business is now ancient history. Here in 2018 we are seeing the emergence and rapid growth of biddable commerce platforms, most notably Amazon’s own AMS search platform, but also including offerings from Criteo, Alibaba, JD.com, Flipkart, Walmart and many more.
After two decades of being a ‘direct response’ destination for media, eCommerce businesses are taking control of upstream media and on-shelf auctions for themselves. While we’re very much at the beginning of this journey, the rise of algorithmic, biddable formats seems inevitable and inexorable; Brands now need to prioritise ‘winning the digital shelf’ as an extension of their audience and media strategy.
Amazon and Alibaba have in parallel, quite separate, dimensions elevated consumer expectations around shopping and delivery to hitherto unknown levels. On top of the obvious logistics and convenience aspects of super-slick ~2hr delivery and instant gratification, Amazon has expanded into content and AI. Meantime Chinese eCommerce has blurred the lines between content, messaging, social, shopping, payment and finance platforms to an extent that challenges separate definitions.
Throw into the mix the ongoing explosion in Influencer Marketing and its impact on shopping trends, plus the Shoppable Post formats growing across the social networks, and there is a clear pattern: we no longer go shopping, we’re now always shopping; Content, browsing, messaging, entertainment and buying are ubiquitous and coalescing into one continuous stream of consciousness for consumers.
Back to the Future
Meantime in more traditional retail, truly ‘omnichannel’ approaches are now the clear winning strategy. Recent data from customer satisfaction and NPS agency Foresee shows that the highest rated retail experiences globally are very clearly those businesses that excel at joined-up online + offline approaches – Apple, John Lewis, Nike, Nordstrom and more.
ROPO (Research Online, Purchase Offline), BOPIS (Buy Online, Pick-up In-Store) and other variations represent by far the most popular forms of ‘eCommerce’ in USA and Europe, with for example 83% of Consumer Electronics buyers in Europe engaging with a digital touchpoint before in-store purchase (eMarketer).
Overall, pure eCommerce (online transaction and delivery) represents ‘just’ 13% of retail sales in the USA and Germany, and 19% in the UK. (Kleiner Perkins and eMarketer) When I ask colleagues and clients to guess these numbers, they typically estimate 30%-60% of sales being via online channels. That’s perhaps understandable, because the overall disruptive effects of ‘eCommerce’ to the totality of retail are actually much much more significant than the headline ‘online sales’ figures suggest. Intelligently stitching together data and insights across multiple channels will continue to be key solution to these challenges
From the late 90’s onwards, the majority of consumer brands opened direct-to-consumer (D2C) online stores. There are many good reasons for this approach: the need for consumers to shop by price; the tempting margins on offer by cutting out retail middlemen; the ownership of customer data and opportunity to build retention programmes.
While there isn’t space here to dig into the potential and pitfalls of D2C propositions, subscription models and personalisation, I will highlight that all of the most successful and hottest brands in the world today take a predominantly D2C approach: Apple, Google, Spotify, Uber, Netflix, AirBNB, Tesla and so on.
Owning the customer is the rocket fuel of 21st Century business models.
But as many brands have discovered, the constantly rising expectations of instant delivery, and associated logistics costs, plus the need to build a performance-driven growth engine and retention programmes, make D2C eCommerce both a huge opportunity and hugely challenging for legacy businesses (rather than startups) not familiar with acting with one voice, let alone as a retailer.
Commerce not eCommerce
Given the trends I’ve described, you will hopefully start to see why OMD’s solution is called ‘Agile Commerce’ with no ‘e’. In the current landscape, it simply makes no sense to create a new silo around eCommerce as a sales channel, because the winning approaches are all rooted in integrated cross-channel approaches to driving overall sales.
Its not just digital sales, its how to sell everywhere in a digital world.
The underlying ethos of OMD Agile Commerce is therefore: Where and how does your business convert prospects into customers, online or offline, and what opportunities are there – anywhere in the revenue chain, at any time – to efficiently accelerate this flow?
By building strategies that treat clients as one, end-to-end business and optimising commercial outcomes across all channels – real sales revenue, not traffic or brand goals – we are able to recommend the approach that is going to deliver the best return on the next dollar or Euro invested.
Better Decisions, Faster
Better Decisions, Faster encapsulates our overall global strategy. We believe that our clients need evidence-based, data-driven solutions that drive commercial outcomes, enabling them to make ‘better’ decisions on their investments. Underpinning this is the need for speed – the window of opportunity with consumers is shrinking and reactivity is key.
For example, KPMG’s data shows that 32% of all eCom purchases in Europe now go from initial consideration to conversion in less than 1 day, giving a window of hours at best to influence those customers. Uniting the traditionally separate spheres of sales, media, brand and performance unlocks enormous potential for our clients to run their business with a near-realtime, revenue and profit optimising approach.
Hence, our ecommerce is Agile Commerce.
Existing case studies of our eCommerce and realtime optimisation capability include:
- ‘Capacity-based McDelivery’ for McDonald’s in Singapore using hyper-local techniques and realtime restaurant data (Ranked the ‘World’s Top Campaign 2018’ by the Gunn Report).
- Maximising Levi’s Black Friday ecommerce sales on a 24/7 realtime basis, doubling sales revenue year-on-year within cost-per-acquisition parameters.
- Pan-EMEA management of Hasbro AMS (Amazon Marketing Services) search programmes.
- Omnichannel discoverability and retail search programmes for Pepsico and Bacardi that consistently ‘win the shelf.’
We offer eCommerce specialist services across all channels – D2C, Amazon and other Marketplaces/Platforms, Omnichannel – leveraging our capabilities in performance media, brand, audience identification and addressability to create an end-to-end solution.
Backed-up by our Commerce Audit and Strategy Development, and able to operate with realtime agility, we can help our clients make Better Decisions, Faster to drive their sales across all channels.
Its eCommerce with no ‘e’. But in a good way.