According to the U.S. Department of Commerce quarterly ecommerce figures, shoppers spent $601.75 billion online with U.S. merchants in 2019, up 14.9% from $523.64 billion the prior year, and that looks set to jump again given the global events of 2020. All retailers want a bit of that don’t we? How can we get a significant slice of the pie now? And how can CFO’s help to achieve this without sanctioning a huge financial outlay?
As a CFO, your role is critical in navigating the choppy waters because as a retail organization grows, so too do the demands from within the business for an ever-increasing array of technology to help manage it. In fact, sometimes it feels like you need a bigger boat! All omni-channel capabilities require technology investments and impact the entire technology infrastructure but defining their impact on sales for the CFO can be tricky -making measuring it difficult.
CFO’s have to judge which can be implemented the fastest, will make the most difference and reap the largest rewards. Which option is future proof? Which will help delight customers the most? Which will pay the biggest dividends in the long run?
Here are three key considerations to bear in mind when investing in your eCommerce experience
1. The peaks are here to stay – nothing is certain anymore
Any spike in traffic through seasonality or an unplanned event will shine a light on everything that isn’t working for your users right across your eCommerce offering, including features, functionality and data. These peaks look like they may become more unplanned in nature if recent times are anything to go by. Beyond Thanksgiving, Black Friday and Christmas - nothing is certain anymore.
It’s also difficult to underestimate the effect that any single event – like the recent pandemic – has had in terms of accelerating online retail. It’s been a huge catalyst for online purchasing. Based on the online sales data from 10,000 retailers, eCommerce sales were 40% higher for the last week of May 2020 compared with the pre-pandemic benchmark of the last week of February 2020. You need to be ready for a sustained high-level of online activity.
2. Your ROI lies in search conversion rates
It’ all about the quality of product data on your site – this is where it’s possible to really add value to an eCommerce site. Forbes recently highlighted the frustration – or ‘shopstration’ – that online shoppers feel when wasting hours shopping for the exact item that fits our tastes and needs. 60% of online shoppers find the most frustration aspect of online shopping to be irrelevant search results and 74% claim it’s inefficient text-based key word searches to locate a product. If users can’t find what they’re looking for they will be quick to move away from your site to find it elsewhere. Normalizing the product data at the beginning of the process means that the search function can more easily find your products on your site leading to increased search conversion rates and measurable ROIs. Great search conversion optimization relies upon great data.
3) Beware of the hidden costs
Technology is often measured in terms of ‘total cost of ownership’ which is an estimate of all the direct and indirect costs involved in acquiring and operating the system over its entire lifetime. CFO’s must be mindful of all of the hidden and potential future indirect costs, not simply the costs that require a purchase order.
Are maintenance and support built into the overall cost of the solution, or are they extra? It’s important to understand what you’re buying and how the pricing model works. GroupBy’s service is included in the monthly cost – there are no extra hidden costs of the 24/7 support it offers, and the support team will respond to critical issues around the clock. Make sure you’re comparing like with like. A less expensive system may work out more costly in the long run.
If there’s one piece of advice to take away - it’s go for the easy, quick wins. There are immediate ways of fixing things in a matter of weeks to months, versus months to years – music to a CFO’s ears. It’s a crawl, walk, run strategy.
Your data makes your profit. Your site needs to provide custom data that resonates with your shoppers. If you want to hear more about our advice to CFOs when they face the challenge of financing improvements to their company’s eCommerce solution check out our article, Bulldozing the Build vs Buy Software Debate.