E-Commerce – David Wiegert om muligheder og trusler

David Wiegert, E-Commerce Director i SCA, kender det europæiske marked og hvilke udfordringer vi i Danmark står over for i takt med, at E-commerce området udvikles og får en stadig større rolle i FMCG. På Mærkevareleverandørernes Årstræf 2017 gør han os klogere ved i sit oplæg at dykke ned i emnet, men vi har her fået ham til at løfte sløret for emnet.

Tekst: KOMMID

In Denmark we’ve talked about e-commerce in FMCG for some years now, but it’s still not a reality – why? What are the preventions?
Main prevention is of course the cost factor – UK retailers still don`t make any profit with their online business because of the cost structure. The local development relates to the retail landscape and store density compared to the population, e.g. E-Commerce is also very low developed in Germany as there is the highest shop density in Europe, meaning: it is just a short ride by car to go to the next supermarket while in the UK it is possible to serve 80% of the population with E-Commerce by running 4 distribution centres. In the UK Tesco already started in 1998 and now they gain the online market share within the UK due to first mover advantage.

What are the 3 most important things to keep in mind planning/working with e-commerce?

1. Suppliers and supply chain management  → User experience and shopper convenience. There should always be obvious value for shoppers in terms of shopping experience and the way the order arrives
2. Shipping and returns, CRM (Client Relationship Management) → Smart use of data
3. E-Commerce catalogue, product display, marketing and loyalty programs → User experience and shopper convenience. Again: there should always be obvious value for shoppers in terms of shopping experience

What’s the biggest mistake made in the e-commerce business/planning – what’ll always go wrong?
The classic ”If you build it, they will come“-mentality. In fact; they won`t, at least not their own… Building business and traffic takes time, effort and energy. The expectations are so important. Some of the typical mistakes and preventions are:

1. No real investment
2. No cash flow
3. Poor inventory management
4. Too much competition
5. A bad website
6. Poor content, especially product images
7. No website traffic
8. No patience

Why even bother? What are the 3 most important reasons to develop e-commerce business?

1. Long term shopper expectation. Worldwide, e-commerce is expected to grow by as much as 13 to 25 percent and the penetration is still low.
2. Long term shopper commitment. Retailers and brands who start early, will benefit from the first mover advantage and lock shoppers early.
3. The ability to earn money as you sleep. No requirements like location determine a huge difference in terms of visibility and sales.

E-commerce…

10 years ago:
Still focused on other categories, especially books and media, apart from the UK not really existing in Europe

Today:
Retailers across Europe put a lot of efforts and investments to develop this touchpoint towards the shopper. Like other categories before grocery, markets move towards the “tipping point” which means that the whole development accelerates and more and more shopper buy more and more online. The operations are mainly steered and developed by experts and specialists.

In 10 years:
E-Commerce will be integrated part of an Omni-Channel-Strategy for retailers and another very relevant digital touchpoints for brand. The operations will be integrated in overall processes within the business.

What’s the biggest thread to e-commerce today?
For suppliers and retailers the expectation management needs to be crystal clear. It is all about reflecting about the current (small) business and the perspective of an overall business, but also considers the potential future online share.

Although we talk about the fastest growing channel in retail, it will most likely not grow business and categories significantly as we predominantly observe a channel shift. But in the long term view retailers and brands need to be present online as the shopper moves more and more towards this channel, so they need to secure they reach future shoppers. I personally believe that the current need for E-Commerce experts will more and more move into an integrated customer marketing management as this will be “just” another channel.