It is not surprising that e-commerce is developing at an unprecedented pace as a result of the COVID-19 pandemic and local government orders to private individuals at home. In fact, e-commerce spending for the period March to June 2020 was $77 billion higher than predicted.
Although e-commerce strategies have also become more sophisticated over time, many retailers are reluctant to use new technologies to address this growing trend, often abandoning potential sources of revenue.
Unfortunately, this has given way to a growing trend known as BYO e-commerce, or the phenomenon of screwing in front of applications in the belief that that’s all it takes. The recent demand for e-commerce means that retailers are trying to compensate for the drop in sales due to in-store purchases. This often leads to members of the sales and marketing team taking responsibility for reaching new audiences and maintaining sales momentum. Platforms such as Shopify are integrated into existing e-commerce systems, with little or no IT costs, to expand reach and take advantage of a larger retail network to create greater brand visibility. This was especially clear after Shopify announced a partnership with Walmart +, Walmart’s online subscription option on the Amazon Prime model, and more recently with TikTok, last June.
Like the infamous BYO trend (BYOD), BYO e-commerce creates additional barriers and threatens the operational efficiency of retailers. The risks inherent in the trend towards e-commerce under the BYO initiative include the following
- It poses a threat to administrative policy and data security: Many contracts need to be adapted to the specific data protection context of a company, and often also to ensure compliance with these parameters. BYO E-commerce bypasses the administrative process completely and threatens the privacy of the customer.
- It restores manual processes: Companies are working diligently on digital transformation, but BYO e-commerce adds another manual process because these solutions are not linked to enterprise resource planning (ERP) systems. As a result, companies are unable to extract critical data from these fraudulent transactions in real time because they are entered manually into the system. This leads to a misrepresentation of actual profitability and makes it difficult to see the flow of goods through the company’s inventory processes for order processing and internal accounting purposes.
- This threatens the strategic direction of the company: If employees are not careful, they can offer the company’s products in markets, companies or regions of the world with which the company does not want to work strategically. This may involve sending items to locations that violate other franchises or selling items that may be considered illegal in territories outside the United States.
3 tips to overcome the challenges of e-commerce at BYO.
BYO e-commerce problems often arise when teams fail to communicate a vision for each department or to allow input at every level and in each business unit, resulting in divergent organizational goals and initiatives. Business leaders – at both management and IT levels – must be wary of attempts at BYO-like e-commerce and take steps to proactively mitigate the associated risks if they want their existing e-commerce strategies to be as effective as possible. Here are some tips for dealing with BYO e-commerce threats:
- Create a culture that encourages cross-functional teams: The development of new revenue sources is always a top priority for management, but it should also be a top priority for every employee and every business unit in the company. Sales/Marketing and IT may have different perceptions and insights into alternative product visibility strategies with which Level C does not identify, and vice versa. The key is to create a culture that enables and encourages the entire team to think about how to increase sales as focused and consistent as possible, and to continuously communicate these expectations to employees. Most importantly, the whole enterprise needs to be aligned in terms of e-business strategies and the tools used to achieve them.
- Invest in a modern integration solution to gain control of your entire technological ecosystem: Investment in integration technologies should ensure a better understanding among large technical and business users. Most companies buy and implement dozens if not hundreds of software applications and we all know how fast data spreads. However, their supply chains are often not flexible enough because they do not invest enough in modern integration technologies to connect all these applications and leverage all this data to achieve true end-to-end visibility of the business process.
- The perfect omnivorous experience: Once companies have fully implemented the updated integration platform, they will have full visibility into every online order. Think of the value you get through full cross-channel integration: all online, in-store and wholesale orders combined in one window, with full IDE and API integration. This simplifies e-commerce activities and improves the efficiency of the team by enabling the entire company to earn a penny. It also eliminates the manual steps in every process, from order to checkout, from the digital storefront to the ERP, CRM or order management system.
Exploiting the future growth trend
E-commerce is there to stay, so companies need to adapt to this development and strive to work to their advantage. With the right strategies and tools, BYO e-commerce should not be a threat that has a negative impact on business, but rather a catalyst for much-needed organisational change as we enter a new era of online buying behaviour and a new e-commerce standard.
Photo credits : Nonnakriet/Schutterstock
Mahesh Rajasekharan is the CEO of Cleo, a provider of ecosystem integration software.