Solving for eCommerce in Ireland today — Micro and Macro views
Traditional Irish eCommerce trade sits around the €2B euros in trade annually now. Growth rate of approx 12% over the last 3 years. In context, Alibaba traded $17.8B in 24 hours on Singles Day last November.
April 4th, I attended the eCommerce expo as a roaming mentor (a new title for the ages). Basically I did 1–21- speed dating with companies looking to find out about eCommerce. Over 8 hours, I met with 15 companies, pausing for a lunch and a con call with one of my clients. This is the 4th, maybe 5th year of the event, and in hindsight, not much has changed. The content has not really evolved, nor the speaking groups, but looking through the industry, not many new emergent have come through.
This is not meant to disparage anyone involved, it allowed me to look critically at the state of the industry now and where things are. And to point out, I willingly attend this event and am grateful to be there. It is a tough ask.
This piece will take two distinct strands, 1 — to provide a competitive benchmark for eCommerce in Ireland. And secondly, to provide some potential solutions on how we can in the absence of a national programme for developing the industry, use what we know and are good at, to provide the economies required to grow and leverage this “new wave”.
Why? I get asked about setting up, or measuring and there does not yet exist a consistent and broad number of key metrics to benchmark from. From this, any new, mature or growing eCommerce business can gain plenty of insight into their direction and performance at a glance. I won’t include all stats, I will leave that to you , but an interesting headline here on our base conversion rates (category wise).
Observations I made here:
Opportunities for new entrants into Pharmacy as regulation on distribution will change in the coming years. The high conversion (particularly on tablet) is not surprising — commoditized, needs based product that has specifics given to you via prescription.
Electrical — I posed the question on the 0% but looking across device, I think our old friends Amazon, probably steal a march in the online sales here — Would you set up a new electrical appliance store? Unless you are a giant media mogul, probably not.
Solving the should I problem?
For businesses looking to assess how well they can scale try some simple maths here — what volume do you think you can get to on an annual basis and at what average selling price, divide by 365. Next Step use the conversion rates and work from the ground up to see how much traffic you need as a result and start validating your ability to tap into that audience or ask yourself the hard question, does that audience exist?
Contact me if you want to get the slides first hand or Gerard Keohane.
This is based on aggregated data of 90 retailers across the country of varying sizes. Contact them for insights the gained from doing this.
A Macro look at problems of the Irish eCommerce Industry
Crisis point is the wrong expression, but it is clear with a severe lack of agenda right now that eCommerce will have to get the foundations for growth itself within private enterprise. It is a shame as for so long we had strong voices from people like Joan Mulvihill raising these topics without getting support of our community, myself included. But we need to cultivate a differing approach to business and this market in general if we want to capitalise on the depth of opportunity available to us now.
Moving on from the basics, I want to offer some solutions and suggestions based on conversations I am now having weekly and moving to daily. eCommerce is not for everyone, despite what you are told it is fundamentally not. Simply put our view on eCommerce is so narrow, that we associate the topic with retail B2C selling online. There are many forms of eCommerce and the ecosystem is made up of many micro industries that enable the wheels to turn — this is where the opportunity lies. You don’t always need to be the eCommerce player, you should employ those who have a proven track record in delivery of these skills to build your model for viability and test purposes.
This allows you to focus on what you are good at, build your proficiency and measure the outputs. The risks today are far less than they were even 3 years ago. Platforms have now become interchangeable and easy to set up. The methods for development typically are simple, plug in based. Simply put, they have developed in such a way that you can start selecting add ins, new tech and nice to have all at once, without the development headaches or roadmap problems you may have seen before. I’m not saying it is easy, but a good partner will help you understand your business and lay risks in front of you with sensible suggestions for change or how to manage them, or if you should at all.
I am not suggesting there are no risks, but why should you adopt them at all. Make them relevant to you and make decisions. There are so many considerations when you look at setting up an eCommerce business, it can be daunting and you get asked, “Where should I start?” There is no immediacy available I find, so the process you bring people through tends to fall flat when the triple digit growth doesn’t come quickly. A very apparent continuing trend is business’ lack of ability to access skills and services to build their business in the best way possible.
I will address these in short and expand the points over the coming weeks:
1. Access to all ecommerce services — Logistics/payments/warehousing etc .. Aggregation has got to be a key part of this at the provider level. I am working with companies to aggregate their offering and offer the service locally — 4 regional hubs for warehousing and shipping physical product would be a huge boost for the “S” companies.
2. Access to all ecommerce services — Layer on top of this an agile team of experienced marketers who help design a strategy and provide the tools over time to you or your team, to learn the tricks of the trade to gain self-sufficiency. Think of the parable of giving the hungry man fish or the fishing rod. We need more fishing rods.
3. Access to all ecommerce services — Repetition much. Providers gain more incremental sales in this model and the sales process should be straight forward open book based.
4. Access to all ecommerce services — In the complete absence of a national education strategy, skills are scarce and expensive. Not only that, but risky. It is difficult without stability and clarity of strategy to attract and retain quality staff. Go a step backwards, have you ever tried to draw up a job spec and interview eCommerce people? Not easy. The rate of change has always been blamed for the lack of structure in the curriculum. We have gone beyond the tipping point here and the tech is moving too quick. Core skills, including modern business, not eCommerce need to be added as opposed to eCommerce. It is basically just a vehicle for enabling modern businesses to trade in efficient, new and international ways.
5. Access to all eCommerce services — We need to think and talk differently about commerce — did you notice I just dropped the e. We are back at trade — simply this is what it is. Piecing together the how, when and what is the skill in the same way business transformation is. You need those people who can look ahead of the business and have develop future led plans, not future proof, as this is not possible or advisable in today’s world.
6. Access to all eCommerce services — All of the above and then some at once. Get advice, seek out the people who have done this well and done it before. Let them do what they are good at and make sure they give you the ability to do what you are excellent and knowledgeable in.
I am dealing with companies from start up to global blue chip FMCG and everything in between and invariably I am having the same conversations with some different variables thrown in for considerations. Direct to consumer is the big one now, particularly with the high street struggling. Some reference points for you to consider before ploughing ahead to answer, where do we start:
Think in the present — Here and Now
Think of what your capability is — Organisational Effectiveness
Think of how transformational you are — Technical Fluidity
How you do things today — Thought mobility
Thankfully these problems are not Irish centric, this is just to provide an “Irish solution to an Irish problem”. US, UK and across Europe the challenges are the same.
When you start looking critically at these points and then assessing, what can we really achieve here, ask yourself, What is the real opportunity we are chasing? At into this, the realism of execution and work through the topics as I outlined, you see the old eCommerce conundrum gets no easier and you may find, eCommerce as we know it, may not be for me — it’s just figuring out, what parts should we use to gain an efficiency, market access or growth. The information gap on answering these is getting no smaller, quicker. The connected person may well be the most critical connectivity you need.