Things are moving in the online shopping sector. And they’re moving fast.
In just one year we have seen Amazon move to selling fresh products, Chinese giant Alibaba dealing cars online and the advent of Facebook and Google buy buttons.
E-commerce has taken off definitively around the world and has become a force for disruption across a majority of industries.
This was the focus of the 2nd E-Commerce Meeting, which brought representatives from a broad diversity of sectors to the school's campus in Barcelona this month. Delegates came from the worlds of communication (Disney, Planeta, Telefonica), tourism (Barceló, Booking.com), health (Sanitas), online sellers (Zalando, eBay and Wallapop) and other digital entities such as Twitter, LinkedIn and Google. This edition was directed by IESE Professors Pablo Foncillas and Mario Capizzani and was sponsored by communications agency, OMD and Nielsen Consulting.
Beyond Channels
Online selling has improved over the years to the point that businesses can now offer omni-channel shopping – where consumers can purchase at the physical outlet, on the web or via mobile. But even this is becoming old hat for today’s customer.
“Clients don’t think about channels. They think about their problems,” says Pablo Foncillas. Businesses who are best positioned to leverage e-commerce are those actively engaging their customers, getting to know them better and anticipating their needs, he says.
Fashion e-tailer, Zalando made this very discovery when they tried to break into the Chinese market. There, consumers do not consult the web at all. They make purchases directly using WeChat or other networks. According to Nicolas Borg, VP of strategy and distribution, the problem is not omni-channel, “it’s about orchestrating a series of channels that you don’t even know.”
The growth in the appearance of new sales platforms is exponential. 2015, says Borg, was the year of buy buttons in social networks. In 2016 we saw the rise of “conversation-driven commerce,” via person voice assistants such as Siri and Cortana. Now we are looking at a future of “immersive commerce” thanks to developments in virtual reality, AI and new hardware such as Google Glass.
Capturing the Micromoment
As we head into this future, one of greatest drivers of change in e-commerce is the proliferation of smartphones.
Wallapop is ahead of the curve in leveraging geolocalization to enable sales between users. Co-founder Gerard Oivé believes that mobile is creating “new user spaces and new user habits.” These, he says, are different from the traditional classifieds that consumers would use.
“Our old platforms were based on advertising and concentrated income coming from few users. This was B2C. Peer to peer has eliminated this kind of concentration – everyone is buying and selling.”
David Garcia, director of marketing at Sanitas believes there are “opportunities in every micromoment.”
Health companies like Sanitas can offer a first consultation via videoconferencing, while information on diagnostics – and even the delivery of prescription medicine to homes – can be done through mobile.
That said, and while mobile does represent opportunities, many delegates agreed that as a channel mobile remains difficult to monetize. Although it does permit constant contact with the consumer.
From Big to Smart Data
Really knowing the customer has become the grand obsession for many online sellers.
“You have to move from big data – great volume of data – to smart (or relevant) data,” says Jaime Pelegrí, head of business for Twitter Spain and Portugal.
“In each tweet of 140 characters, there are 65 elements that help you make decisions about marketing,” he says, stressing the social network’s capacity to collect data.
In order to analyze this amount of data and locate useful information, some businesses have started to create or outsource to teams of data analysts. Pau Contreras who heads up data science and digital analytics at Unidad Editorial says that building these teams is about “combining information data engineers , statistical mathematicians, experts in machine learning and analytics/digital marketing profiles – people who are capable of understanding what is going on behind these digital processes.”
Paulo Levoni, director of operations at eBay in the U.K., believes that challenges in data analysis are not related to transactions: “We have to take a step further and identify those users – not the ones making the transactions – but rather the users who could have the intention to buy.”
Rapid Execution, Efficient and Flexible
The speed of change was a constant topic throughout the meeting. Following the rhythm of change, for many speakers, meant delivering short projects in record time and deploying high levels of efficiency in execution.
David Gracia of Sanitas said a period of three months should be the outer limit in launching an online project. “We launch the minimum in the short term and thereafter we make improvements based on iterations and feedback. If you don’t feel a little uncomfortable with your launch, you’ve already arrived too late.”
Toni Raurich, director of partnerships in EMEA with Booking.com, believes technology to be “trivial.” “The key is your capacity for execution: layer your functions and make things easier for the user.” Those who can harness speed and excellence in execution can expect to grow fast and meet new challenges.
Gerard Olivé, co-CEO of ANTAI has extensive experience with digital startups. He believes that “the greatest challenges have to do with people. When you are experiencing rapid growth, your greatest need is for your people to adapt in attitude and aptitude.”
Inspiring Your Customer – and Making it Easy for Them
How can businesses meet the challenge of keeping pace with rapid technological change?
Zalando’s Borg recommends a focus on “inspiring the client and helping him or her to discover new products via third parties such as Pinterest; this and deeper integration with apps like Facebook or Apply Pay which are part of the native consumer experience.”
Miquel Moya who heads up travel and distribution with Google says that: “at the end of the day, what’s relevant is simplicity especially for five inch screens. That and staying relevant to what your client wants every moment (through machine learning.)”
Nonetheless, Pedro Domínguez of Nielsen Iberia stresses that because of cultural issues and doubt surrounding security, the physical shop “remains a must.”
There are no easy solutions. Our experts agree that the world of e-commerce remains a work in progress. But work that is taking place at the speed of light.