Why Operational Excellence Is Key for Digital Commerce Success
What is the key to winning customers and increasing sales in digital commerce? Some might say a beautiful (and obviously highly functional) e-commerce platform with a fantastic user interface. Others would point out the importance of social media marketing campaigns including work with influencers as well as paid advertising. Still, more businesses might point to the value of reviews, especially those on standard social media.
I say that they may all be missing the point. All these will attract customers to your site in the first place. They might even get them to buy. However, they won’t keep your new customers, or get them coming back for more. They certainly won’t get them recommending you to other people. To achieve all these, you need to make sure that you can deliver on your promises—and that means a strong and clear focus on operational excellence.
Understanding the Value of Operational Excellence
If you go into a shop and buy a product, there is very little risk that you will be unhappy when you get it home. You’ve seen it, handled it, possibly even tried it. However, with digital commerce, the situation is quite different. A lot can go wrong after purchase. The packaging might fail. The goods might not be delivered in the time you expect. The product might be a slightly different colour than it appeared on screen. As the retailer, if any of these happens, you will effectively have broken your promise to the customer.
The only way to resolve this is a relentless focus on excellence across all your operations. Without that, you simply won’t be able to meet your promises, and you will lose sales.
I’m not the only one to have come to that conclusion. Research from GfK on the state of retail in the tech and durables sector found that consumer tech retailers plan to focus strongly on operational excellence over the next few years. The strongest focus is expected to be on delivery times. However, supply chain and workforce were only fractionally lower—and even the two lowest operational areas, product assortment and ecosystem of services, still scored pretty highly.
Unpicking Operational Excellence
GfK has found that people are generally more concerned about product availability and delivery times than they were before the pandemic. There was huge growth in online sales during the pandemic, and many people have remained reliant on this option. However, they don’t want to wait for delivery. Overall, 42% of consumers are now making buying decisions based on delivery options, compared with 32% before the pandemic.
This explains the focus on delivery times that was seen in almost all retailers in GfK’s survey. However, promises of fast delivery can only take you so far if you don’t have the product in stock—which also explains the interest in supply chain improvements. Over 80% of retailers expect to make some changes to their supply chain operations over the next few years. This work includes demand forecasting and eliminating backlogs. Retailers want reliability, but also flexibility to pivot rapidly to new collections with the seasons. This also touches on the issue of product assortment. All these issues are closely linked.
Why the focus on workforce? Because you can’t deliver anything without the right people. Surly, unhappy employees make for unhappy customers. You want people who are prepared to go above and beyond to deliver for your customers—and who delight in going further than mere ‘customer satisfaction’. This is especially important in-store, but it also matters online. It is no surprise that talent recruitment and retention is high in the minds of retailers at the moment.
It is also worth considering the ecosystem of services, or additional services that can be offered to customers. The simplest are probably instructional videos via social media networks. However, another important option is payments. Consumers want to be able to choose their payment method, both in-store and online. ‘Buy now pay later’ is particularly important in some geographical areas, so I think we can expect to see a rise in this option over the next few years.
Getting It Right
Even these few examples show the range of issues that come under the umbrella of operations. None of these on their own will win you customers – but any one of them could lose sales, and certainly future sales. Winning at digital commerce means getting all aspects of operations right, to ensure that you can deliver what your customers want, when they want it.
