State of eCommerce - Outlook for the Future - Episode 194
INTERVIEW WITH RICK WATSON
DESCRIPTION
This week we are joined by Rick Watson who spent 20 plus years as a technology entrepreneur and operator exclusively in the eCommerce industry. We’re here to discuss what’s next for retail and eCommerce, how to make an eCommerce channel more profitable, and how to choose the right marketplace. We’ll wrap this episode with advertising and the halo effect in retail media along with our thoughts around Prime Day, which ended just last week.
Make sure you tune in to find out more!
Rick Watson founded RMW Commerce Consulting after spending 20+ years as a technology entrepreneur and operator exclusively in the eCommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes. Watson’s work today is centered on supporting investors and management teams incubating and growing direct-to-consumer businesses. Most recently, in partnership with WHP Global, Rick was a critical resource in architecting the WHP+ platform, a new turnkey direct-to-consumer digital eCommerce platform that powers AnneKlein.com and JosephAbboud.com.
“Forget about advertising for the first year, just fix your operations, and understand how the business works.”
KEY TAKEAWAYS
We're exiting a period where 100% margin optimization was king, and entering a period where flexibility is more important.
The big challenge is coming out of the pandemic. Many people have workers that are spread out across the globe, supply chains that are spread out across the globe - that's going to impact manufacturing, that's going to impact the workforce, depending on where they are. Even if the demand is back in one country, it doesn't mean that the supply is back. The biggest news for manufacturers is to prepare for the unexpected.
There are a lot of questions around how to make an eCommerce channel more profitable, or even profitable in the first place.
eCommerce on its own is not that profitable - it's an expensive thing to invest in. The employees are expensive, the supply chain is expensive. The companies that are profitable in eCommerce are either in a very high margin business or they're in a traditional business.
Advertising is another area where there's a known halo effect in retail media. An advertisement on Amazon might influence the purchase in a grocery store for a product and vice versa.
Digitally native brands are finding out that pop-ups and seasonal experience stores are necessary to further drive growth in key cities and towns, key zip codes. To overcome competition, where everyone's competing for the same eyeballs, has been the key for a lot of brands.
The notion of optimization versus flexibility - these aren't necessarily polar opposites.
When you look at when the consumer is shopping on Amazon, there're things that are visible to you like product content, and ads. But to have your Amazon products actually show up in search and be viable, there are all of these things that need to happen below the surface around operations and brand protection. That goes back to the supply chain, how you're selling on Amazon, the fees, who else is in your distribution channel.
You can have the most beautiful, elegant PPC campaigns on the planet and the most beautiful content, but if you have flubbed your inventory projections, it's not going to matter.
There's a real cost of supplying different marketplaces, because the initial integration, you need to staff that - is that an internal team or an agency - and then there's a big difference, especially with more of the established marketplaces between being present on a marketplace and actually doing a good job.
One hypothesis is that the Prime Day in Q4 2020 was quite successful. This year is going to be a tough year for that mostly because of supply chains. Most people are already worried about getting their stock in time for Christmas. Because they don't know what's going to happen with their supply chains right now.
Facebook is very much a consumer-to-consumer site, while Instagram could be a place where brands and influencers can sell.
There's a massive opportunity for Instacart to offer a white label solution to retailers.
You can't transform a company with technology alone - you need to transform the people. Ultimately, the people are making the selection of the technology and the adoption of the technology.
MENTIONED IN THIS EPISODE
Connect with Kiri Masters
Connect with Rick Watson
Learn more about Bobsled Marketing
Learn more about RMW Commerce Consulting
Read the article Why Express, Urban Outfitters and J.Crew Now Sell Items From All Over Online [WSJ]