As online sales continue to show robust, year-over-year growth due to sheltering in place amid the COVID-19 outbreak, retailers and brands are upping their e-commerce capabilities. But for many companies, the high demand is revealing flaws in their operations and processes, which is forcing them to reconfigure their approaches.
Here, Olivier Schott, chief marketing officer of Scalefast, the global e-commerce solution provider that helps brands launch online stores in 15 days, shares insights into what it takes to launch and grow a DTC site.
WWD: How should retailers and brands reimagine their e-commerce strategies given the disruptions caused by COVID-19? Where do they start? And what’s needed?
Olivier Schott: Coronavirus has caused everyday life to grind to a halt, but understanding the impact to the wider retail industry can help brands put plans in place to emerge successfully. Consumers still need to make certain purchases, and are choosing to buy them online when at all possible, but with online sellers like Amazon swamped with orders, unable to fulfill purchases quickly or simply reprioritizing certain types of goods, customers are turning to any alternative to get their orders on time, including the brand’s sites, or smaller resellers.
Brands that are majority sold in retail or brick-and-mortar should work quickly to build up their own online sales channels and take control of as much of the supply chain as possible. E-commerce selling requires manpower, technology, direct-to-consumer infrastructure and experience — and for brands struggling to make the transition, third-party partnerships can be a lifesaver.
Working with experienced business partners well versed in the direct-to-consumer e-commerce landscape allows the rest of the business to focus on their own strengths, and ensures that they are diverting customers to their own sales channels. Now is the time to take action, work to drive consumer demand, and be ready to face setbacks when they arise.
This is a unique moment where brands must initiate or accelerate on their digital transformation and dismiss channel conflict as an excuse for the status quo on direct-to-consumer. This should act as a collective wake up call in a company to prioritize D2C.
WWD: How should retailers and brands align their inventory and fulfillment centers? How can they use data to inform warehouse locations?
O.S.: Brands and retailers will have to make predictions on how their markets are reacting to the changing restrictions of the coronavirus. With lockdown decisions being made at a state level, and some states “reopening” as early as this week — retailers might look into transferring inventory from areas that have been harder hit to stores that have reopened and are starting to sell again.
Customer demographic data will also come in handy here. For example, online shoppers in New York won’t be buying clothing for the spring season, but with warmer weather year-round, customers in L.A. might still be purchasing — if a brand can watch these buying patterns, they can shift their inventory to locations with higher demand. The key here is flexibility, and keeping communications open with logistics partners to understand your capabilities, and be able to move stock on a dime when necessary.
WWD: What is “headless e-commerce” and why should companies try this approach?
O.S.: Headless e-commerce does just what the name says: it decouples the back end of an e-commerce platform that processes and fulfills orders from the “head;” the presentation layer known as the content management system (CMS) that customers browsing an online shop interact with.
Going headless provides flexibility to make changes to the front end quickly, and personalize interfaces for each customer’s personal information — like their shipping info, loyalty points, even recommended products — without having to redeploy the whole system. The headless approach also allows brands transitioning to online sales to seamlessly add new e-commerce functionalities to their web sites without having to start from scratch. Right now, this could prove to be a necessity for brands that are finding their retail partners have closed their doors, and have to pivot to strengthen their own selling channels.