Insights

Thoughts On Owning Your Digital Present and Future

Editor’s Note:

In this unprecedented situation, every business is experiencing a unique set of challenges. The entire team at Gorilla Group wants to leverage our commerce expertise to help in any way we can. Should you or your team have an issue you’d like to discuss, a challenge that requires quick problem-solving, or want an independent outside perspective to validate your strategy or action plan, please do not hesitate to reach out. Email us at digitalcommerce@gorillagroup.com with some detail regarding your need. We have a team ready to set up a virtual conference with you to listen, learn, and help create a path forward. No sales pitches. Just solutions.

Saying ‘the future is digital’ has become cliche. But, the current situation facing every business is quickly reinforcing the critical importance of a strong digital commerce program in times of business disruption. The lessons we have learned to date will continue to evolve as this plays out, and we will continue to adapt our thinking accordingly. Still, there are takeaways we can apply immediately and some longer-term strategies that can be planned for now to minimize the risk of this wide-scale disruption from happening again.

Owned Commerce Channels

Own your digital commerce channels and own your destiny. This is true whether you’re a retailer, distributor, manufacturer, or a CPG brand that may only sell direct-to-consumer through niche use cases. Adoption of digital-only or digital-influenced purchasing behaviors will accelerate going forward for both businesses and consumers. Mastery of these digital channels is a requirement not only for long-term success, but for brand preservation.

Digital impacts every sales channel. This is true regardless of business model, vertical, or product line. For manufacturers, this means robust sales team enablement tools complete with real-time inventory and customer-specific pricing, and self-service tools to enable replenishment, punch-out, configure-price-quote (CPQ), and even made-to-order (MTO) requests. For CPG brands, this means seamless wholesale ordering and reordering, and strategically created, brand-centric direct-to-consumer sites. (No one needed to buy toilet paper directly from a manufacturer, until everyone did. Mechanisms to restock retail supplies have also fallen short.) Retailers must offer the best of both worlds once shopping patterns return to “normal” and capitalize on click-and-collect capabilities, which have proven to be an equalizer against Amazon for brands that are doing it right.

Case in point, Best Buy is benefitting from their investments to offer 1-hour pickup for online orders, with each store serving double-duty as a fulfillment center. Binny’s, a much smaller Midwestern beverage retailer, is able to offer the same sixty minute turnaround to their hyper-local customer base. Home Depot can accommodate walk-in walk-out service with minimal human interaction, ideal for the situation we’re currently experiencing.

In the short term, ensure sites can handle surges in traffic. Be transparent, especially in terms of the ability to fulfill orders. Look for quick wins and green light stalled projects that can make incremental customer experience improvements. Longer-term, revisit your digital roadmaps to identify shortcomings in the current experience and gaps in capabilities that may exist. Then prioritize and begin moving forward on the next iteration of your digital experience.

Merchandising

At all times, but particularly times of crisis, brands must be exceptionally careful not to consciously, or unconsciously, seek to profit from a given situation. The potential long-term impacts outweigh any short-term gains. Even the perception of profiteering or price gouging can inflict irreparable brand harm. Trust is the underlying currency of business and it must be maintained over everything else.

With machine-learning programs often tasked with implementing dynamic pricing based on data inputs, there is a risk of system-bias resulting in punitive price fluctuations. Human oversight of merchandising programs is a must.

Menards, a Midwest-based big box home improvement retailer, has run afoul of the Michigan Attorney General after multiple complaints of price gouging on cleaning products and protective gear. Whether the price manipulation was intentional or not is beside the point. The damage to brand equity has been done.

Supply Chain

No one could have predicted the hoarding of consumer staples that has affected supermarkets in the U.S. and in other parts of the world. Or could they? Early in the outbreak, the Chinese government instituted buying curbs on consumer staples and issued directives to companies to ramp up production (Wall Street Journal article, subscription required). That was almost two months prior to the virus being declared a pandemic. There are other issues that can be questioned about the Chinese response, but the shortages of consumer staples that we’ve seen at home did not occur there.

World events can foreshadow local needs. No single company could have acted to prevent what happened here, but it’s clear that more proactive steps could have been taken, which would have lessened the anxiety felt by so many.

Logistics & Fulfillment

Self-reliance has never been more important. Amazon announced that it is suspending its Fulfillment by Amazon Program for 3rd party sellers for products of what are deemed non-essential. This freeze will extend at least until early April. This move is understandable given the need to keep up with customer demand, but it puts many Amazon sellers in a situation that will materially affect their businesses. This directly relates to the need for rock solid owned commerce channels as we discussed above. When it comes to logistics and order fulfillment, having a Plan B, or using multiple 3PL vendors to lessen reliance on any one provider can help with business continuity as a result of any future disruptions.

Messaging

We have seen some very thoughtful, useful, and empathetic messaging from a number of brands and retailers but the takeaway here seems to be, if you don’t have something of value to say maybe don’t say anything at all.

Many of us have received emails from every brand and business with which we’ve ever done business. As these messages began to inundate our inboxes, most were simply echoes of each other. No real personalization. No context whether we bought something 6 days or 6 years ago. As each successive message became less meaningful, indifference began to give way to annoyance. And we know that was not the intention of anyone. It’s imperative for companies to be transparent and to keep customers informed, but mass sends that do not offer tangible value to the recipient can be counterproductive.

This is a trying time for all of us personally and professionally. We continue to keep our heads up. We continue to move forward. We hope you are doing the same.