E-Commerce: Lifeline or Flatline?
Inside the store, customers develop a tight relationship with your products. They touch them, take in their aromas, become inspired by creative displays. They understand how certain products pair with others, guided by plan-o-grams that help them fill their impulse basket.
It’s brick-and-mortar category management 101.
But that science is under pressure due to the disruptive growth of e-commerce, as both iconic and small populist brands capitalize on online selling and the advantages of single-click convenience and quick delivery.
Yet even an e-commerce giant’s best developer can’t create web pages mimicking the brick-and-mortar buying experience. Category management for e-commerce? With so much at stake, it hovers in the ether. But that could change in 2017 and beyond.
“Category management is very formulaic, and that has everything to do with ‘the shelf.’ People get cross-eyed when you ask about it when applied to ecommerce.It doesn’t compute,” says Bill Bishop, chief architect and co-founder of Barrington, Ill.-based market consulting firm Brick Meets Click.
“The challenge is for category management to expand its range, its definition, because it’s still in a very rudimentary state,” says Bishop. “Consumer packaged goods (CPG) companies spend millions on category management in the store, but with the online presentation, it’s like they’re calcified with the store shelf.”
Others are witnessing CPGs establishing stand-alone strategies to drive online buying higher. “Historically, many CPGs had a silo mentality (separating) e-commerce and in-store merchandising, and e-commerce development was limited to a small selection of top-tier CPGs,” says Andrew Pearl, director of strategy and insight for Boston-based Profitero. “This has changed significantly over the last two to three years, with CPGs at all levels creating global e-commerce director roles with specific, dedicated teams in core markets.
“Many CPGs have created global e-commerce strategies … monitoring both e-commerce sales performance and digital shelf metrics. This would include product content, search placement, ratings and reviews, pricing and promotions, assortment and availability.”
Should c-store retailers be concerned as their CPG partners sell in a virtual world? Maybe. But retailers can capitalize on the rise in e-commerce is via “click-and-collect” programs, in which customers pick up online orders at the store. Another is through a dynamic, interactive website and mobile site, or offering delivery within a 5- to 10-mile radius via an online ordering platform.
“Store-based retailers can remain relevant (in these ways) while leveraging their existing asset base, supply chain and labor force,” says Keith Anderson, senior vice president of strategy and insight for Pro tero. “Bolt on a site and app to enable online ordering and retrain staff , or just partner with third-party platforms like Instacart, Shipt or Google Shopping, and you’re an online merchandiser.”
For c-stores, the “key strategy should be driving visibility online,” says Pearl. “This can be as simple as ensuring all in-store promotions are clearly advertised on websites, to more complex use of product images and search-engine keyword sponsorships.”
Read on to see how the main players are helping shape the merchandising game in 2017 and beyond.