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Surprising failure factors when implementing eCommerce and Omnichannel eBusiness

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Divante
Divante

We work on the large Omnichannel and eCommerce projects in Europe. Therefore, we can see from the inside how many companies approach this topic. Comparing it with the obtained results, we can determine positive and negative factors influencing success with great certainty. In this presentation we share stories of companies that are not mentioned in our case studies. These are the stories of bad choices, leading to failure.

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Surprising failure factors when implementing eCommerce and Omnichannel eBusiness Tomasz Karwatka / Divante.co
WHY IS IT WORTH READING? 2 Therefore, we can see from the inside how many companies approach this topic. Comparing it with the obtained results, we can determine positive and negative factors influencing success with great certainty. In this presentation we share stories of companies that are not mentioned in our case studies. These are the stories of bad choices, leading to failure. If you think about Omnichannel / eCommerce and were about to do something that we write about below - just contact and consult us :) We work on the large Omnichannel and eCommerce projects in Europe.
Who has to deal with Omni?
IN WHICH CATEGORIES THE INFULENCE OF THE INTERNET ON SALES IS THE BIGGEST? 4 We’ve compared the impact of the Internet on purchasing process in individual categories in 2016. Building Omnichannel in these industries can give you competitive advantage. Ar you in this industry? You need to quickly build great Omnichannel Experience. Full report: http://go.divante.co/ropo-sopo-zwyczaje-zakupowe-polakow-raport-2016/ Diagram shows the breakdown by category of the percentage of buyers declaring the use of the Internet during their shopping process If your industry is below, you need to have a good e Commerce - otherwise you wouldn’t be here:) • Credit or cash bank loan • Car accessories • Cosmetics or care products • Medicine or medical articles • Furniture and home furnishing items • Electronic devices – e.g. TV, radio, Hi-Fi audio • Clothing accessories • Car parts • Clothing / Footwear • Small household appliances • TPL / AC insurance • Sports or tourist equipment • Books, toys • DVD or Blu-Ray movies • Mobile phones and subscription. • Large household appliances • Cameras and digital cameras <10% 11-20% 21-30% • Tickets to the cinema or other events • Computer components or accessories • Music on CDs or mp3 • Booking a hotel room • Airline or railway tickets • Holiday or a trip abroad • Software or computer games 31-40% >40%
OVERALL IMPACT OF THE INTERNET ON SALES – 2016 VS. 2011 5 The overall impact of the Internet is the percentage of transactions in which the online channel was included as a source of information and /or place of purchase. The percentages rounded to the full value; the ranking is based on the values to two decimal places. Full report: http://go.divante.co/ropo-sopo-zwyczaje-zakupowe-polakow-raport-2016/ Booking a hotel room Category Influence in 2016 Airline or railway tickets Holiday or a trip abroad Software or computer games Tickets to the cinema or other events Computer components or accessories Music on CDs or mp3 68% Sports or tourist equipment Books Change of influence compared to 2016 Place 2016 Change of place compared to 2016 50% 45% 43% 34% 33% 33% 29% 24% 17% 20% 8% 8% 4% 3% 9% 7% 6% 1 2 3 4 5 6 7 8 9 b.z. +4 -1 -1 b.z. -2 +1 +1 +1
OVERALL IMPACT OF THE INTERNET ON SALES – 2016 VS. 2011 6 The overall impact of the Internet is the percentage of transactions in which the online channel was included as a source of information and /or place of purchase. The percentages rounded to the full value; the ranking is based on the values to two decimal places. Full report: http://go.divante.co/ropo-sopo-zwyczaje-zakupowe-polakow-raport-2016/ Toys Category Influence in 2016 DVD or Blu-Ray movies Mobile phones and subscription. Large household appliances Cameras and digital cameras Furniture and home furnishing items Audio/video devices 23% Clothing accessories Car parts Change of influence compared to 2016 Place 2016 Change of place compared to 2016 23% 22% 22% 22% 19% 18% 18% 17% 14% 5% 7% 11% -3% 6% 5% 9% 1% 10 11 12 13 14 15 16 17 18 +7 b.z. -1 +3 -7 b.z. -2 +1 -6
OVERALL IMPACT OF THE INTERNET ON SALES – 2016 VS. 2011 7 The overall impact of the Internet is the percentage of transactions in which the online channel was included as a source of information and /or place of purchase. The percentages rounded to the full value; the ranking is based on the values to two decimal places. Full report: http://go.divante.co/ropo-sopo-zwyczaje-zakupowe-polakow-raport-2016/ Clothing/Footwear Category Influence in 2016 Small household appliances TPL/AC insurance Credit or cash bank loan Car accessories Cosmetics or care products Medicine or medical articles 16% Change of influence compared to 2016 Place 2016 Change of place compared to 2016 11% 11% 9% 8% 6% 3% 10% 35% 5% 6% 1% 2% 1% 19 20 21 22 23 24 25 +1 _1 +1 +3 -2 -1 -1
Mistakes of the Board Source: www.viralnova.com
CAREFUL, THE DISTRIBUTORS WILL NOT LIKE IT! 9 • Hiding prices • Raising prices • Forcing registration Sabotaging your own eCommerce • Self Service builds premium brands • Added services • Full „Where to buy” offer • Images and descriptions Ideas Source: www.pinterest.com
DEPARTMENT X WILL CREATE ECOMMERCE ON THEIR OWN 10 • IT – choosing the "known" technology, too little emphasis on business and client aspects • Marketing – treating eCommerce as advertising brochure • Sales – fear of channel conflicts and „hiding” eCommerce • Dedicated eCommerce position for the period of transformation Solution Source: www.pinterest.com
BUT WE ALREADY HAVE A WAREHOUSE 11 • 24/7 • Two-way – up to 30-40% returns • C&c and other • Lower AoV eCommerce logistics is different • External service at the beginning Solution Source: witzshared.com
WE HAVE INTEGRATED SYSTEMS FOR AGES, IT’S NOT A PROBLEM 12 • Systems adapted to a traditional business • Customers may receive a data package (prices, product catalog and availability) made specifically for them • Orders get lost when the ERP system slows down or crashes. • Omnichannel data bus Solution Source: witzshared.com
WE ALREADY HAVE IMAGES AND DESCRIPTIONS 13 • Images and descriptions aren’t just a complement anymore - it’s the only thing the user sees • Systemic and quick adding images • Duplicate content in Google • Translation • Proofreading • Process • PIM software Solution Source: www.amusingtime.com
OUR OWN HOSTING IS ROCK-SOLID 14 • High online traffic • Large traffic spikes (x10 is common) • A lot of excess equipment required • IT loooooves our servers, cables and wires • Private Cloud, CDN Solution Source: www.pinterest.com
Managers’ mistakes Source: www.viralnova.com
COLLECT YOUR BUSINESS NEEDS 16 • Gathering business needs from all departments of the company • But... 40% briefs results in contradictory, mutually exclusive requirements. • What the customers already have and use • Implementation, then designing Solution Source: http://www.2dayfm.com.au/
COLLECT CUSTOMER NEEDS 17 • Ask your customers what they want • Very diverse groups • Mutually exclusive opinions and needs • There is no golden mean • Lack of prioritization • Implementation, then designing • Feedback: livechat, a/b testing, .. Solution Source: http://www.2dayfm.com.au/
OUTSOURCE IT 18 • Businesses would like to have a project where someone tells them what, how much and when • This unfortunately leads to a lack of strategic IT planning • No control over the product in the long term • Building a virtual team • Open Source Solution
BUY CHEAP 19 • Comparing offers and choosing the cheapest • In eCommerce usually Development cost >> Deployment cost • Work out a coherent vision of development with all vendors • Magento is popular because developing in PHP is cheap Solution
THIS PLATFORM BEST MEETS OUR REQUIREMENTS 20 • Let's choose a platform which feature list agrees with our feature list • But ... 50% of the requirements is collected badly • Flexible platform – framework • Select 20% key functions for the deployment • Development instead of pre-planning Solution
Why do eCommerces go bankrupt?
MEASURE YOUR ROI 22 • Measuring ROI of each action shows that you treat your business seriously • But ... one of the stores consistently eliminated all unprofitable (in the short term) sources of acquiring new customers. • Lack of a strategic vision for customer acquisition. • Customer base gradually decreased. • Measuring long term ROI • Loyalty Solution
IF IT WORKS – DON’T TOUCH IT! 23 • If it works, let’s not change it • But ... as time goes on, it becomes more and more difficult to: add, maintain security, update • Magento 1.x - – end of support in 2 years • Basecamp creators – the application is rewritten every 4 years • Plan development and migration strategically • IT architect in your team Solution
INTENSIVE ACQUISITION OF NEW CUSTOMERS 24 • Intense acquisition of new customers • New customer = loss • "We have no loyalty in our strategy„ • In on-line sales it’s unfortunately a lot easier to "move away from cash„ • Acquiring customers without loyalizing them in eCommerce leads straight to bankruptcy. • Monitor loyalty • Create a loyalty program – even if only for the on-line channel. Solution
25 Would you like to get ROPO/SOPO 2011-2016 report? Tomasz Karwatka CEO tkarwatka@divante.pl WE LOOK FORWARD TO COOPERATING WITH YOU
About Divante Team, experience and clients
27
28 eBusiness Software House • We deal with eCommerce technology and Omnichannel design solutions, • We have operated since 2008, • More than 150 professionals in Wroclaw • Clients from Europe and the USA, • We include Clients to our teams and work in SCRUM methodology, • We are a reliable partner, Divante belongs to OEX SA group, • Offices in Wroclaw and Rotterdam.
29 We employ more than 150 professionals: • 60 PHP Developers (Magento, Zend, Symfony), .NET, Java, iOS, Android), • 11 certified Magento Plus Developers, • 5 certified Magento 2.0 Developers, • 9 Front-end Developers, • 12 Testers, 4 Analysts (business, system), • 10 Project Managers, • 12 UI/UX Designers, • 8 Marketing Technology & Big Data Specialists.
Divante UK 286C Chase Road London, N14 6HF United Kingdom (+44) 20 30115154 mblum@divante.co Divante Sweden Divante HQ Divante NL Divante UK Divante HQ 14 Kosciuszki Street 50-038 Wroclaw Poland (+48) 733 355 596 sales@divante.pl Divante Holland Rivium Quadrant 141-181, 2909 LC Capelle aan den IJssel The Netherlands (+31) 657 625 006 mpolak@divante.co Divante Sweden Erik Dahlbergsallén 15 115 20 Stockholm Sweden kpodeszwa@divante.co

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Surprising failure factors when implementing eCommerce and Omnichannel eBusiness

  • 1. Surprising failure factors when implementing eCommerce and Omnichannel eBusiness Tomasz Karwatka / Divante.co
  • 2. WHY IS IT WORTH READING? 2 Therefore, we can see from the inside how many companies approach this topic. Comparing it with the obtained results, we can determine positive and negative factors influencing success with great certainty. In this presentation we share stories of companies that are not mentioned in our case studies. These are the stories of bad choices, leading to failure. If you think about Omnichannel / eCommerce and were about to do something that we write about below - just contact and consult us :) We work on the large Omnichannel and eCommerce projects in Europe.
  • 3. Who has to deal with Omni?
  • 4. IN WHICH CATEGORIES THE INFULENCE OF THE INTERNET ON SALES IS THE BIGGEST? 4 We’ve compared the impact of the Internet on purchasing process in individual categories in 2016. Building Omnichannel in these industries can give you competitive advantage. Ar you in this industry? You need to quickly build great Omnichannel Experience. Full report: http://go.divante.co/ropo-sopo-zwyczaje-zakupowe-polakow-raport-2016/ Diagram shows the breakdown by category of the percentage of buyers declaring the use of the Internet during their shopping process If your industry is below, you need to have a good e Commerce - otherwise you wouldn’t be here:) • Credit or cash bank loan • Car accessories • Cosmetics or care products • Medicine or medical articles • Furniture and home furnishing items • Electronic devices – e.g. TV, radio, Hi-Fi audio • Clothing accessories • Car parts • Clothing / Footwear • Small household appliances • TPL / AC insurance • Sports or tourist equipment • Books, toys • DVD or Blu-Ray movies • Mobile phones and subscription. • Large household appliances • Cameras and digital cameras <10% 11-20% 21-30% • Tickets to the cinema or other events • Computer components or accessories • Music on CDs or mp3 • Booking a hotel room • Airline or railway tickets • Holiday or a trip abroad • Software or computer games 31-40% >40%
  • 5. OVERALL IMPACT OF THE INTERNET ON SALES – 2016 VS. 2011 5 The overall impact of the Internet is the percentage of transactions in which the online channel was included as a source of information and /or place of purchase. The percentages rounded to the full value; the ranking is based on the values to two decimal places. Full report: http://go.divante.co/ropo-sopo-zwyczaje-zakupowe-polakow-raport-2016/ Booking a hotel room Category Influence in 2016 Airline or railway tickets Holiday or a trip abroad Software or computer games Tickets to the cinema or other events Computer components or accessories Music on CDs or mp3 68% Sports or tourist equipment Books Change of influence compared to 2016 Place 2016 Change of place compared to 2016 50% 45% 43% 34% 33% 33% 29% 24% 17% 20% 8% 8% 4% 3% 9% 7% 6% 1 2 3 4 5 6 7 8 9 b.z. +4 -1 -1 b.z. -2 +1 +1 +1
  • 6. OVERALL IMPACT OF THE INTERNET ON SALES – 2016 VS. 2011 6 The overall impact of the Internet is the percentage of transactions in which the online channel was included as a source of information and /or place of purchase. The percentages rounded to the full value; the ranking is based on the values to two decimal places. Full report: http://go.divante.co/ropo-sopo-zwyczaje-zakupowe-polakow-raport-2016/ Toys Category Influence in 2016 DVD or Blu-Ray movies Mobile phones and subscription. Large household appliances Cameras and digital cameras Furniture and home furnishing items Audio/video devices 23% Clothing accessories Car parts Change of influence compared to 2016 Place 2016 Change of place compared to 2016 23% 22% 22% 22% 19% 18% 18% 17% 14% 5% 7% 11% -3% 6% 5% 9% 1% 10 11 12 13 14 15 16 17 18 +7 b.z. -1 +3 -7 b.z. -2 +1 -6
  • 7. OVERALL IMPACT OF THE INTERNET ON SALES – 2016 VS. 2011 7 The overall impact of the Internet is the percentage of transactions in which the online channel was included as a source of information and /or place of purchase. The percentages rounded to the full value; the ranking is based on the values to two decimal places. Full report: http://go.divante.co/ropo-sopo-zwyczaje-zakupowe-polakow-raport-2016/ Clothing/Footwear Category Influence in 2016 Small household appliances TPL/AC insurance Credit or cash bank loan Car accessories Cosmetics or care products Medicine or medical articles 16% Change of influence compared to 2016 Place 2016 Change of place compared to 2016 11% 11% 9% 8% 6% 3% 10% 35% 5% 6% 1% 2% 1% 19 20 21 22 23 24 25 +1 _1 +1 +3 -2 -1 -1
  • 8. Mistakes of the Board Source: www.viralnova.com
  • 9. CAREFUL, THE DISTRIBUTORS WILL NOT LIKE IT! 9 • Hiding prices • Raising prices • Forcing registration Sabotaging your own eCommerce • Self Service builds premium brands • Added services • Full „Where to buy” offer • Images and descriptions Ideas Source: www.pinterest.com
  • 10. DEPARTMENT X WILL CREATE ECOMMERCE ON THEIR OWN 10 • IT – choosing the "known" technology, too little emphasis on business and client aspects • Marketing – treating eCommerce as advertising brochure • Sales – fear of channel conflicts and „hiding” eCommerce • Dedicated eCommerce position for the period of transformation Solution Source: www.pinterest.com
  • 11. BUT WE ALREADY HAVE A WAREHOUSE 11 • 24/7 • Two-way – up to 30-40% returns • C&c and other • Lower AoV eCommerce logistics is different • External service at the beginning Solution Source: witzshared.com
  • 12. WE HAVE INTEGRATED SYSTEMS FOR AGES, IT’S NOT A PROBLEM 12 • Systems adapted to a traditional business • Customers may receive a data package (prices, product catalog and availability) made specifically for them • Orders get lost when the ERP system slows down or crashes. • Omnichannel data bus Solution Source: witzshared.com
  • 13. WE ALREADY HAVE IMAGES AND DESCRIPTIONS 13 • Images and descriptions aren’t just a complement anymore - it’s the only thing the user sees • Systemic and quick adding images • Duplicate content in Google • Translation • Proofreading • Process • PIM software Solution Source: www.amusingtime.com
  • 14. OUR OWN HOSTING IS ROCK-SOLID 14 • High online traffic • Large traffic spikes (x10 is common) • A lot of excess equipment required • IT loooooves our servers, cables and wires • Private Cloud, CDN Solution Source: www.pinterest.com
  • 16. COLLECT YOUR BUSINESS NEEDS 16 • Gathering business needs from all departments of the company • But... 40% briefs results in contradictory, mutually exclusive requirements. • What the customers already have and use • Implementation, then designing Solution Source: http://www.2dayfm.com.au/
  • 17. COLLECT CUSTOMER NEEDS 17 • Ask your customers what they want • Very diverse groups • Mutually exclusive opinions and needs • There is no golden mean • Lack of prioritization • Implementation, then designing • Feedback: livechat, a/b testing, .. Solution Source: http://www.2dayfm.com.au/
  • 18. OUTSOURCE IT 18 • Businesses would like to have a project where someone tells them what, how much and when • This unfortunately leads to a lack of strategic IT planning • No control over the product in the long term • Building a virtual team • Open Source Solution
  • 19. BUY CHEAP 19 • Comparing offers and choosing the cheapest • In eCommerce usually Development cost >> Deployment cost • Work out a coherent vision of development with all vendors • Magento is popular because developing in PHP is cheap Solution
  • 20. THIS PLATFORM BEST MEETS OUR REQUIREMENTS 20 • Let's choose a platform which feature list agrees with our feature list • But ... 50% of the requirements is collected badly • Flexible platform – framework • Select 20% key functions for the deployment • Development instead of pre-planning Solution
  • 21. Why do eCommerces go bankrupt?
  • 22. MEASURE YOUR ROI 22 • Measuring ROI of each action shows that you treat your business seriously • But ... one of the stores consistently eliminated all unprofitable (in the short term) sources of acquiring new customers. • Lack of a strategic vision for customer acquisition. • Customer base gradually decreased. • Measuring long term ROI • Loyalty Solution
  • 23. IF IT WORKS – DON’T TOUCH IT! 23 • If it works, let’s not change it • But ... as time goes on, it becomes more and more difficult to: add, maintain security, update • Magento 1.x - – end of support in 2 years • Basecamp creators – the application is rewritten every 4 years • Plan development and migration strategically • IT architect in your team Solution
  • 24. INTENSIVE ACQUISITION OF NEW CUSTOMERS 24 • Intense acquisition of new customers • New customer = loss • "We have no loyalty in our strategy„ • In on-line sales it’s unfortunately a lot easier to "move away from cash„ • Acquiring customers without loyalizing them in eCommerce leads straight to bankruptcy. • Monitor loyalty • Create a loyalty program – even if only for the on-line channel. Solution
  • 25. 25 Would you like to get ROPO/SOPO 2011-2016 report? Tomasz Karwatka CEO tkarwatka@divante.pl WE LOOK FORWARD TO COOPERATING WITH YOU
  • 27. 27
  • 28. 28 eBusiness Software House • We deal with eCommerce technology and Omnichannel design solutions, • We have operated since 2008, • More than 150 professionals in Wroclaw • Clients from Europe and the USA, • We include Clients to our teams and work in SCRUM methodology, • We are a reliable partner, Divante belongs to OEX SA group, • Offices in Wroclaw and Rotterdam.
  • 29. 29 We employ more than 150 professionals: • 60 PHP Developers (Magento, Zend, Symfony), .NET, Java, iOS, Android), • 11 certified Magento Plus Developers, • 5 certified Magento 2.0 Developers, • 9 Front-end Developers, • 12 Testers, 4 Analysts (business, system), • 10 Project Managers, • 12 UI/UX Designers, • 8 Marketing Technology & Big Data Specialists.
  • 30. Divante UK 286C Chase Road London, N14 6HF United Kingdom (+44) 20 30115154 mblum@divante.co Divante Sweden Divante HQ Divante NL Divante UK Divante HQ 14 Kosciuszki Street 50-038 Wroclaw Poland (+48) 733 355 596 sales@divante.pl Divante Holland Rivium Quadrant 141-181, 2909 LC Capelle aan den IJssel The Netherlands (+31) 657 625 006 mpolak@divante.co Divante Sweden Erik Dahlbergsallén 15 115 20 Stockholm Sweden kpodeszwa@divante.co