This article was originally published by WARC.
As more brands pivot to online retail during COVID-19, it’s important to get the right structure within the business internally to ensure success; brands need to take a modular approach when looking at a model for growth in e-commerce, says OMG Transact’s CEO Gemma Spence.
Changes in buying behaviour during COVID-19 are well-documented – more groceries bought online, more old people and rural consumers buying online, the expectation of rapid delivery of purchases – and are regarded as a game changer.
Writing in The WARC Guide to E-commerce and the Future of Effectiveness, Spence notes the challenges CPG (consumer packaged goods) businesses face, including the need for greater agility and an aligned platform strategy that takes account of the fact that their biggest customers may now also be some of the biggest advertising channels.
“However, whilst e-commerce has been the main growth engine for CPG businesses in recent times, what is less clear is how to set up the organisation internally to react to this,” she says.
Spence outlines four key factors that CPG businesses should consider when deciding their organisational ‘blueprint’ for e-commerce; there will inevitably be trade-offs that are specific to the organisation:
• Complexity of business: the number of categories across the business, and the extent to which it operates across the same consumer segments will significantly influence the choice of organisational model.
• Maturity of e-commerce / key markets: how mature the business is versus the competitive landscape and the maturities of key markets.
• Size and ambition for e-commerce business: portion of total sales, retail media, growth of the category and/or have strong ambitions to grow.
• Company culture: collaborative culture and transversal ways of working will naturally come together and take a more multi-functional approach to the major E-platforms.
“Being able to meet the challenges of e-commerce requires businesses to be able to align all elements of the organisation behind a clear business strategy,” she says, and advises a modular approach, looking to China for examples of how CPG players have addressed this.
That typically requires ensuring that all roles and responsibilities, both internally and externally, “complement one another as part of the decisioning process in place so that each task is sequenced effectively.”
For more on creating an effective structure, read the article in full: Winning e-commerce: How CPG brands can streamline their business internally.