As consumer goods executives are seeking to build their eCommerce organizations they typically have the following conversation with internal leadership:

“I need investment in the eCommerce channel; it’s growing rapidly. We have to get caught up; competition’s starting to pull ahead. I need more people on the team. We’re going to need  customized digital content. We need exceptions to our standard processes to move faster. We need exceptions to our logistics processes to be more nimble. And we need to be able to ask for best pricing from our online retailers.”

The typical response is “show me the ROI.”

The question then is, well, what if it isn’t there yet? Very often we’re looking at anywhere from one to, at most maybe, five percent of sales as a total percent of the business. And these kinds of asks are disproportionate to the type of revenue that it’s driving today. Building a business case, if you’re in the fortunate position where you’ve got such strong revenue and a profitable P&L already, may work very well. And there are certainly categories where there are products that are either very high price points, or they’re very low weight and easy to ship, where you’ve already got the ROI. But if you’re not, there are three ways to frame your response that can help you overcome the ROI objection.

It’s not just about the revenue from online, we need to protect our brand equity

When you talk about protecting brand equity, the reality is that just about every brand can probably find that offensive listing where something happened, something went wrong, and you’ve got space…granola bar, a food bar product showing Wonder Woman, a typo in the title of your very high-end hair care product, or important product safety information missing. Brands need to ensure that they are protecting their brand equity by getting the basics right or they risk falling behind the competition that is already doing this. Furthermore, with the rise of third-party sellers you need to ensure that your brand reputation is not taking a hit from unauthorized sellers listing your products online. 

Winning offline starts with winning online 

The vast majority of shopping trips start with some kind of a digital trip or a web-based interaction. When we think about the fact that 80% of all retail sales are influenced by online research, you have to ask the question: “What else could we as an organization do to impact that percentage of retail in one place?” And the reality is there isn’t one. There isn’t one retailer or media channel that you can focus on that could impact over half of your retail sales as is the case by just getting your online presence right.

We Need to Future Proof

There was a point in the not too distant past where you would attend conferences and share groups and the question was, “well is eCommerce going to be important?” There is no longer a question of if or when, but how. Innovation and technology shifts, coupled with moves from Amazon and traditional brick-and-mortar retailers, are driving shopper behavior online. And there’s compelling data points in countries where online shopping has already taken hold, as online shopping baskets in those countries can be twice as large as their offline equivalents. What’s really compelling is that any vertical that has seen a tipping point in eCommerce has had a very sharp uptick in growth immediately after. The online retailers in the US are finally starting to catch up to what the UK retailers have been working on, and are starting to lower the barriers for shoppers to get into eCommerce. Certainly in China and other parts of Asia this is already the case. The point is, that while you may see eCommerce being 1%-5% or a low percentage of your sales today, all projections indicate that in the next 5-10 years that’s going to rise to 10%-15% of your sales and become a very important channel if it isn’t already.

Be prepared for eCommerce success. Download Winning Online with 6P eCommerce Intelligence™  and get the framework you need to prioritize your eCommerce capabilities and actions.

by Danny Silverman

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