The 7 Questions Interview Series: eCommerce and Supply Chain Data Integration
“The 7 Question Series” is an investigative content series where we seek out key leaders in a specific industry and/or subject matter expertise area and ask them 7 key questions that “enquiring minds want to know”. There is a twist however to these questions. We provide the person being interviewed with a hypothesis for each question. This helps to frame and set context for their answer.
eCommerce and Supply Chain Data Integration Series Objectives:
The objective of the e-commerce series is to establish direct connections with eCommerce experts across the globe and ask them the same set of 7 questions regarding e-commerce data integration in the supply chain. We want to derive insights from their direct experiences and expertise that will help e-commerce companies, both B2B and B2C at all stages of their evolution. We are also curious to see if their answers are similar or different. These interviews will be featured on this website as a series.
Interview with Steve Deckert, Cofounder of Sweet Tooth.
About Steve Deckert:
Sweet Tooth. Steve heads up the marketing and public relations group and has extensive expertise in eCommerce analytics, loyalty marketing and customer engagement.
Steve presents and educates on eCommerce in various areas including cross channel customer loyalty and has presented on numerous occasions including the 2011 UK Meet Magento conference in London, England.
Robin Smith: Recent statistics tell us that close to 50% of consumers do not buy online? Why do you think that’s the case?
Steve Deckert: We need to keep in mind that eCommerce is still a very young industry, relative to traditional commerce’s hundreds of years of history. Yes, if we take a snapshot of online purchasing, it seems low at only 50%. But if we look at the change in online purchasing adoption, we see that online purchasing is growing for the foreseeable future.
Image Source: eMarketer
To answer the question, I think it has to do with habit. The Late Majority hypothesis is likely accurate: some consumers are slow to adopt, while some never will.
Robin Smith: Only 10% of Canadians plan to do their holiday shopping online in 2014 compared to 44% in Britain. Why do you think there is such a large margin?
Steve Deckert: Canada is definitely lagging in eCommerce adoption. I think there are two causes of this, both of which affect each other. First of all, retailers are giving little attention to the eCommerce market. This causes poor eCommerce experiences for Canadian consumers, which leads to slow consumer adoption.
Why aren’t Canadian retailers adopting ecommerce as fast as other countries? In my opinion: they don’t believe it is an attractive enough market to justify investment. Although Canada has the world’s sixth highest disposable income, it ranks 37th in terms of population and a whopping 229th in terms of population density. Shipping is more expensive and takes longer, setting up warehousing infrastructure will require more capital, shipping internationally is difficult (especially across borders), and the potential customer base of Canada isn’t very large in the first place. Too many retailers deem that they can get a higher return with other investments.
Compare this to Britain, with a similar average disposable income (7th highest vs 6th), higher population (22nd highest vs 37th), and higher population density (51st vs 229th). As a retailer, this market is significantly more attractive, and has been receiving much more investment.
Secondly, those Canadians that do purchase online are often met with subpar experiences due to the lack of retail investment.
The company I work with, Sweet Tooth, is in the business of ecommerce customer experience (we create loyalty programs). We have data from over 3,500 ecommerce loyalty programs in over 50 countries with over 15 million end users interacting with our software.
90% of Canadians belong to at least one loyalty program compared to only 74% in the United States, according to the 2013 Colloquy Loyalty Census. Combining this with population data, we should see approximately 7.5 times more loyalty programs in the US than Canada. From our data of over 3,500 eCommerce stores, we see that there are actually closer to 12 times more eCommerce loyalty programs in the USA than Canada. This means that Canadian retailers are less likely to invest in eCommerce experience than their American counterparts, despite Canadians having a higher affinity for loyalty programs!
Robin Smith: In our experience very few ecommerce sites integrate their systems and data making it impossible to scale and putting customer service and relationships at risk. Why is that?
Steve Deckert: I think the cause of this lies in traditional retail, where merchants would generally work with fewer vendors, and would less frequently see the need for integrating several systems. Brick & mortar would usually have one vendor that provides POS, accounting, and ERP systems.
An eCommerce operation will usually have more vendors, each with a more clearly defined niche. When you include eCommerce’s higher adoption of Software as a Service (SaaS) as well, you end up with even more moving parts. Retailers just aren’t used to having to integrate so many systems, but those that do will have an advantage.
Robin Smith: In your view are online retailers and sites leveraging their transactional data strategically? Are they making good use of their data to make strategic decisions and generate more revenue?
Steve Deckert: We’re seeing an increasing number of retailers that are leveraging transactional data strategically. In my personal experience I’ve found that eCommerce retailers who are founded recently are the ones that are using data to strategically make decisions.
At Sweet Tooth, most retailers come to us and ask for help improving brand loyalty, repeat purchase rate, average order value, and customer lifetime value. A little known fact is that loyalty programs were also invented to improve the data retailers collect: loyalty programs incentivize customers to identify themselves when they interact with the brand. For example, if a customer wants to collect loyalty points for making a purchase, they must give their loyalty program account ID. What would normally have been a guest checkout is now another data point on an existing customer. This really allows retailers to get more insight into how their customers behave. The smart retailers come to us for better data as well as to improve customer lifetime value.
Robin Smith: What are the key differences and similarities when it comes to B2B and B2C ecommmerce?
Steve Deckert: One key difference between B2B and B2C is how they approach technology. I think this is because B2B usually has a higher customer lifetime value than most B2C retailers. Think how much more a purchasing manager will spend on office supplies over their lifetime than your average, everyday consumer. This key difference means that B2B can invest more in systems; whether they are customer facing or not.
Software as a service is making enterprise-class software more accessible for smaller retailers. Now, more than ever, B2C retailers can invest in systems that traditionally only large B2C retailers and B2B retailers had access to.
Robin Smith: What’s next for ecommerce? Where do you see things headed?
Steve Deckert: I see price competition, particularly from Amazon, making brands become more than just a product and a price. I see brands starting to craft unique experiences for their customer.
The internet has been commoditizing most products. As Enterprise-class software is becoming more accessible to smaller retailers, competition is rapidly rising. This is particularly true for eCommerce. This will make it increasingly more difficult for any retailer to differentiate against others except for customer experience and branding.
Robin Smith: How involved and active is the C-suite in developing an ecommerce strategy and monitoring the success of ecommerce sales?
Steve Deckert: From what we see, this is dependent on the age of the organization. Generally, older retailers will not have a C level exec involved with eCommerce. Usually a separate, newer, department will handle this, or the IT department will handle this. Because the department is either new relative to others, or the IT department, there is usually a bit of isolation from the other departments.
About Sweet Tooth
Sweet Tooth is a loyalty app for ecommerce stores. Sweet Tooth has created over 3,500 loyalty programs in over 50 countries, and has rewarded over 15 million happy customers. With Sweet Tooth, retailers can reward customers with points for purchasing, social sharing, referring friends, and more. Retailers can choose what customers are able to spend their points on. Sweet Tooth increase average order value, repeat purchase rate, customer engagement, customer loyalty, referrals, and customer lifetime value.
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