A significant number of grocery and FMCG manufacturers and suppliers remain unsure how to plan for and integrate ecommerce within their businesses, an industry round table has heard.
The event, attended by suppliers and retailers and hosted by category and shopper management specialist Bridgethorne, heard that board level commitment to the potential for ecommerce could be the biggest impediment to putting in place strategies aimed at exploiting this emerging commercial opportunity. Online sales of consumer packaged goods are forecast to grow 53% over the next five years, retaining its position as the fastest growing channel.
“How businesses should structure themselves in order to capitalise on this growth opportunity is the question we are asked most often,” explains Nick Kirby, Bridgethorne’s ecommerce director.
“Thankfully the old approach of going to the youngest person in the team because ‘they must be good at digital’ is beginning to change. At the round table we had people clearly well immersed in the ecommerce area. Although more and more suppliers are starting to take it seriously, the importance of having board level buy-in in order to drive an internal ecommerce agenda came through loud and clear.”
There were three particular recommendations that emerged from the conversation, reports Kirby: ecommerce has to be a declared and intrinsic priority for the business; it needs to be embedded within an organisational structure and should be a cross functional responsibility, and staff should be set targets and given incentives based on ecommerce performance.
“At present, how suppliers address ecommerce differs according to where they are in terms of maturity on their ecommerce journey,” he explains. “It certainly requires board-level buy in, but then it is a debate as to whether to imbed responsibility in existing teams or go for separate teams where you can perhaps run faster and do things differently.”
Either way, Kirby adds, delegates at the Round Table seemed united on the fact that the only way to make it work is to create cross functional teams. This means involving people from marketing, from trading, from sales and from insight as part of the ecommerce team and who, together, are able to drive forward the brand’s ecommerce agenda.
“There was agreement that, if your strategic business objective is to grow online, then it can’t be tagged onto a category manager or a national account manager’s other responsibilities or put low down on a sales or marketing teams to do list. By putting in place KPIs around online it changes it from being somebody else’s responsibility and not something core with which they don’t need to engage. Competitive sales staff are more likely to embrace targets if they know it’s going to form part of their end of year review,” continues Kirby.
“There remains an absolute need for technical expertise within this channel and for suppliers to have somebody internally to own the space. But ultimately it can only be successful if the people who are doing the day to day job of dealing with the retailers and actually working across multiple channels with the retailers are measured on it and have the right KPIs in place.”
Those who seem to be doing well, Kirby adds, are those who have already committed to the role that online can play in their business and recognise the Halo effect it can also have on in-store sales.
“We can see businesses that have over-indexed on resource, and have a philosophy that says ‘we are going to build this and trust that the sales will come’. These are the companies that know there is no such thing as a purely online shopper or offline shopper. They know that shoppers research online and purchase offline as much as they purchase online and they know the overall impact it can have if they make ecommerce a declared priority for their business.”