How brands should turn to their digital voices
As the Internet came of age, those able to harness its speed and efficiencies were able to offer a wider range of products and services--with immediate delivery time--to customers growing more accustomed to instant gratification.
The practical effect of the rise of e-commerce was a consolidation in the retail world among larger, and ever-growing companies able to deliver the broadest and best customer experience. Those unable to keep up with the forward march of innovation were, quite often, cast aside by customers and investors. Many small and medium-size businesses don’t have the resources to digitize and to compete with trillion-dollar companies with access to public equity and debt markets. But, as the pandemic hastens the movement of customers away from brick-and-mortar retail, the need to go online is as urgent and important as ever.
Shopify, a Canadian multinational e-commerce company, is among those newcomers who’ve been able to break through a relatively crowded field. The formula is clear: innovation. Recently, Shopify put forth a financial tool for small businesses to manage their cash flows and better organize their cash inflows and bills. Directors at Shopify have commented that the company is working to rethink the common bank account, and in turn plans to offer its own debit card and business accounts. It’s this type of innovation that enables Shopify to become a blue-chip player. In turn, small and medium-size businesses can take advantage of this infrastructure to digitize and streamline their operations.
The rise of e-commerce has elevated nimble newcomers at the expense of traditional players; The grocery industry is one where traditional players have come to appear rather obsolete. The pandemic has lined the pockets of grocers as anxious shoppers hoard food and other supplies. Yet, the run on the shelves has laid bare the fragility of supply chains and the inability of some companies to keep up with demand and deliver products to customers within a reasonable period of time. launching a food product in the UK is just one example of how time has changed and how the focus of every brick and mortar shop should be digital-first.
Some Americans were shocked to see empty shelves and some shortages of food products. And as people have become wearier of indoor venues, the move to online shopping has bloomed--yet, delivery slots have been occasionally scarce and delivery unreliable.
Kroger, the largest supermarket chain in the United States, has, by its own admission, struggled to keep up with the transition to digital shopping. It has focused on in-store sales even as Amazon, Walmart, and others have invested heavily in online grocery-delivery platforms. While the pandemic has been a short-term bonanza for Kroger, its future prospects depend heavily on its ability to compete with those more accustomed to doing business online. Amazon’s purchase of Whole Foods in 2017 laid bare that the grocery industry is subject to disruption--and Kroger is, in some ways, a cautionary tale. It was not sufficiently aggressive in partnering with or acquiring other companies that would enable it to increase its digital footprint. While Kroger was reportedly interested in purchasing more technologically-apt startups that could complement its core business, it didn’t act: Shipt was purchased by Target, and Plated, a meal kit company, was purchased by Albertson’s. Such missed opportunities could prove fatal.
Kroger has been seen, in recent years, as a tired stalwart of a traditional industry--unable to innovate, unable to adapt, less creative than its competitors. The pandemic--and the unprecedented run on groceries in the United States--has led to increased interest in Kroger in the public markets and has provided a lifeline to purveyors of essentials such as food. However, Kroger will need to ramp up its online presence if it is to compete, long-term, with the likes of Amazon, Target, and Costco. In the age of one-click shopping, speed and seamlessness in fulfillment are everything. And Kroger must act quickly; business, as in life, is about moments, after all.
The move away from brick-and-mortar is not new. Yet the pandemic has hastened the move online and crystallized its inevitability. The good news for those who’ve lagged behind is that digitization is easier and less expensive than it ever has been. Platforms such as Wix--the Israeli cloud-based web development service listed on the Nasdaq-is among the tools available to small and medium-size business owners that can be utilized to take their businesses online. Wix makes it easy to get on the web and offers free and premium options depending on the budget and level of professionalism desired. Most business owners opt for a custom domain name; on that note, GoDaddy is another offspring of the Internet age, which makes it easy and inexpensive to purchase a domain name. GoDaddy and other Internet registrars have even borne a cottage industry of buying domain names for investment.
Squarespace provides a similar service to Wix: website building and hosting. Its customers use pre-built templates with drag-and-drop features. As such, building a website for a small business requires little-to-no tech prowess. Squarespace has expanded its offerings over time to include a variety of e-commerce tools including the purchase of domain names and the tracking of customer data. We’ve seen a democratization of e-commerce tools in recent years that were once only within reach of more sophisticated tech players.
One method by which to enhance an e-commerce website is by utilizating user-generated content (UGC). UGC might include a comment section on a website where customers can post photos and reviews; a blog; and community groups in which users can deliberate about the products on offer. UGC can be curated, and non-curated, and between users, or between users and the business. This, too, does carry some level of risk; the Internet--particularly social media--indeed plays host to nefarious actors and comment boards that invite those who may use inflammatory or offensive language. The business may feel compelled to monitor the nature of user-to-user conversation.
Doing more business carries with it inevitable risks. As the pandemic sends consumers and businesses online, it also beckons fraudsters; fraud attempts reached 4.3% of transactions in April 2020, a year-over-year increase from 3.8% in April 2019. E-commerce fraud represents a $12 Billion problem. Chargebacks are one of the most expensive types of fraud a retailer can experience--and is also the common. E-commerce offers many opportunities but also responsibilities to protect against fraud--and fraudsters continually attempt to circumvent and out-innovate those trying to protect customer information. PCI compliance is one of several essential strategies to protect credit card transactions from fraud; the Payment Card Industry Security Standards Council has published rules to protect customer data.
Shopify, Wix, and Squarespace are examples of e-commerce businesses that help other businesses go online more effectively. Businesses without a sophisticated online presence--and the ability to fulfill e-commerce orders efficiently--are subject to erosion of their market share. To compete with the likes of Amazon and other mega-retailers, businesses must invest in innovation and in enhancing the customer experience. Luckily, there is a myriad of tools available that enable even small business owners to take their businesses online.
Alon is an Israely product and marketing executive with a track record in leading customer centric product management and inbound marketing strategy. While improving user engemenemt and customer, I help Start Ups achieve product market fit and expand their online footprint. I specialize in technology, entrepreneurship, customer experience.