What Drives eCommerce Success

Opinion: Two insights into why creating successful eCommerce experiences is difficult.

After building digital experiences for the better part of the past 20 years while working with dozens of billion-dollar brands, it is still a passion of mine to help businesses build a successful eCommerce store, and make the integration of digital as frictionless as possible.

The keyword here is “successful.” By successful, I am referring to the key business drivers that funded a commerce transformation project in a large company. The KPI typically looks like one of the following:

1. I need to increase revenue by X%
2. I need to improve my CSAT by X points
3. I need to improve average order value by X dollars
4. I need to increase margin by X%
5. I need to decrease my sales spend by X dollars
   

I’ve come to two fundamental points of view on how to build a successful eCommerce business, and what an effective commerce transformation program needs.

POV 1:

The sweet spot for project deliverables in large commerce programs is 3 months. Organizations continuously elect to try and put digital transformations into a tidy box, and it just doesn’t work.  

1. It is near impossible to know exactly how a channel’s target audience will react to specific features, both in its implementation and design.  
2. It is also just as impossible to know the type of impact it will have on your business goals.  
3. Finally, enterprises are large, complex organizations.  It’s difficult to align stakeholders from product, merchandising, pricing, IT, sales, supply chain, promotions, data, and more (all of which touch commerce) on all their needs for the next 18 months -- which is what big-bang commerce programs take. Rather, it makes sense to align on concrete north stars, akin to the ones listed at the top of this article and/or one level below. Then, have each stakeholder clearly define what are the non-negotiable items they need to run a successful eCommerce business,, and then begin knocking those out. Start releasing these items in 1-3 month chunks, while in parallel continuously building out the Epics that will follow.
   

These are the main reasons that all successful modern software product companies release iterations of their products (Facebook, Google, Snowflake, AWS). In this sense, eCommerce transformation is much more akin to building a product than it is to implementing a project.

So how do you do this effectively? Before embarking on a commerce transformation, ensure that you have the right processes and coaches on board that can help guide and organize stakeholders to produce meaningful requirements that can be adjusted in 1-3 month increments. In addition, these coaches and processes must effectively communicate the current state of the program, as well as any anticipated changes, clearly and effectively throughout the organization.These are critical keys to eCommerce success.

POV 2:

A successful Commerce Program needs to focus on five key areas: Experience Design, Data Governance, Change Management, IT/Architecture, Data Analytics

While a commerce project can go live on time, it is very possible that it will never live up to the lofty expectations that were originally put on the program. Our second POV is that in order for commerce programs to be successful, organizations need to focus on five key areas. Let’s take a look.

1. Experience Design: This is where your commerce transformation journey should always begin. Understanding the voice of your target audience and design experiences that will be easy for them to understand and navigate to help them accomplish their goals.
2. Data Governance: This is next. Based on your designs, start creating an inventory of necessary data that will power these experiences. Will your target audiences be navigating and understanding your products? Look at your product data governance (taxonomy, attribution, images, etc). Allowing your target audience to self-service? Look at your order data governance, and how that data will flow back forth from the experience.
3. Change Management: How will these new experiences be supported by your current operational staff? Where are the gaps? What are your remediation strategies to support these gaps? While this can happen in parallel with the next step of IT as you prioritize your Epics, this is just as important as all the other steps
4. IT/Architecture: Which platforms will power your experience? What is the architecture that will allow your organization to rapidly respond to future business needs. It is important to understand that this is where steps 1-3 come together. There needs to be organizational empathy that this is a journey that could take several years, albeit broken up into multiple 3-month chunks.
5. Data Analytics: As systems come online in three-month increments, it is important to continuously be interacting with and interpreting the data the systems are producing so that the organization can intelligently inform future 3-month sprints.
   

This may seem a little overwhelming, especially if you’re just beginning to explore how to start a successful eCommerce business. It doesn’t have to be. It’s about setting the right expectations within the organization that value in commerce transformations can be delivered in three-month increments, and that these increments will stretch indefinitely because as an organization you want to continue to deliver value to your customers for the entire life of your organization. 

If you try to timebox a commerce transformation to just 1 year, your organization is inherently saying that it will stop innovating value for your customers after one year. We know this isn’t the case -- so perhaps the biggest challenge in commerce transformation is not the transformation itself, but getting the organization to accept a mindset that treats commerce transformation as a perpetual commerce journey with the goal of delivering continuous value to clients that will indefinitely grow a business.