The post-pandemic business landscape remains challenging for businesses across the globe, not just South African ones. Fortunately, there are companies working to learn and understand the exact conditions of the current business climate. They are using what they find to provide the insights and advice businesses need to make the right decisions in these trying economic times.
The Boston Consulting Group (BCG) has recently published a new report entitled “Winning Formulas for E-Commerce Growth,” which delves into the distinguishing factors between successful e-commerce entities and those falling behind, providing valuable insights for businesses aiming to chart a course toward profitability and expansion.
Should these insights intrigue you, below are the essential points to note.
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E-commerce is not a phase
E-commerce has continued growing over the years, so it’s clearly here to stay and not just a “phase” that business is going through. The takeaway from this is that South African retailers would benefit from focusing on/building/growing a strong online presence by embracing e-commerce rather than treating it as a secondary channel. Thanks to the massive digitalisation of recent times that has seen new online stores and services that challenge the status quo emerge, it has become clear that modern shoppers have very different expectations from those of customers from even just a decade ago. They are also awash in choice, so they’ll just go somewhere else if businesses don’t meet those expectations.
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You must be agile
The e-commerce landscape is becoming incredibly competitive, and to keep up (and ahead of competitors), businesses simply have to be agile. Agility is no longer a nice to have; it’s an essential capability to pursue, as businesses must be able to course-correct and change decisions that didn’t yield the desired results quickly. BCG’s tips for doing this include exploring unique business models, offering niche products or services that scratch a particular customer itch, and working to create a distinct brand identity in what is quickly becoming a crowded marketplace.
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E-commerce doesn’t just appeal to Zoomers
BCG’s study reveals that e-commerce appeals to more than just younger demographics; baby boomers and Generation X constitute a much more substantial segment of the unexplored e-commerce market than was earlier assumed. The advice for businesses, therefore, is to capitalise on this discovery by developing even more accessible platforms and crafting marketing strategies that resonate with younger and older consumers alike.
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Invest in digital
In BCG’s survey, the businesses that invested in their digital capabilities and e-commerce did better than those that didn’t. Over 70% of the overall ‘winners’ invested more than 10% of their revenues into these areas, showing a strong correlation between investing and winning. The key to the wins was apparently investment in ‘mature technology stacks’, and not just the most expensive ones, says BCG.
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Differentiate with Technology
The winners in BCG’s report all used advanced digital and data platforms, which helped them to align their strategies and operations with current trends and anticipate future market shifts. This was their key to adapting quickly to shifting market conditions; the takeaway for South African businesses is to do the same.
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Team Agility
It’s not just business technology that needs to be flexible and agile; internal teams must also be. BCG’s report highlighted how organisations with agile teams were more likely to end up in the “winner” column than those that didn’t. The implication here is that flexible organisational structures that encourage cross-functional collaboration support the agility and innovation needed to compete in today’s world. Businesses would therefore benefit from adopting more flexible organisational structures.
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Continual development
BCG’s report noted that even the ‘winners’ can improve. So, even if your company is doing well now, committing to continuous learning and adaptation is still wise to maintain and improve performance. You should also regularly revise and update your e-commerce strategies and evaluate your technological capabilities, as these can lead to continued growth and help you maintain your competitive edge.
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Under-performers are not beyond hope
BCG also said that despite the gap between the winners’ performance and the ‘laggards’ in its research, the difference between the two is not so wide that the laggards can’t catch up. To do that, however, companies will need to prioritise aligning top management strategies with what e-commerce teams do and commit to filling in any identified technology gaps.
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The e-commerce future is bright
All of BCG’s research points to the continued global growth of e-commerce, which is forecast to constitute 41% of global retail sales by 2027. But perhaps even more importantly, one of the co-authors of the report, BCG’s Robert Derow, noted that “Many markets and categories are actually still years away from full e-commerce maturity, with tailwinds strong enough to justify investing greater capital and resources into winning capabilities and organisations.”
Conclusion
From the report, it’s clear that BCG believes that investing more in your e-commerce capabilities now is a great way to prepare for the future. And it would seem that positive growth projections plus a strong “tail wind” due to Africa being somewhat behind where the rest of the world is on the e-commerce front bodes well for any companies that choose to agree.