Making Waves – eCommerce After COVID
“We are in the midst of a seismic shift in business and society. Understanding platform strategy will be vital to grasp tomorrow’s economic model.”* –Aditya Basu, Strategy & Marketing – CEO Office.
As tectonic shifts sink continents and elevate swamps into mountains, the tsunamis unleashed leave those in their path with a single question: how will you survive? Thus we are reminded of Andy Grove, the former chairman of Intel and author of “Only The Paranoid Survive”(1996), the subhead of his book being “How to Exploit the Crisis Points That Challenge Every Company”.
Grove is credited as the “Father of OKRs” by legendary investor John Doerr, but was also a mentor to Steve Jobs, Larry Ellison, Ben Horowitz of Andreessen Horowitz and many more. Though “Objectives and Key Results” are worthy of their own article, “Strategic Inflection Points” (the theme of “Only the Paranoid Survive”) seems a more urgent read as the “return to the new normal” looms like a tidal wave eager to flood the COVID-wasteland that left businesses marooned and our cities desolate.
A Strategic Inflection Point is the moment in a company (or person’s) trajectory where they have the opportunity to weather a crisis and soar to new heights, like a phoenix reborn, OR plummet to new lows like an ostrich with its head in the sand. These inflection points are often prompted by “10X forces”; a force that is outside the norm of what may even be considered possible.
Grove introduces the 10X force in the context of six forces known to affect businesses, originally introduced by Professor Michael Porter of Harvard. The forces as paraphrased by Grove are: the power, vigor, and competence of 1) existing competitors, 2) potential competitors, 3) suppliers, 4) customers, 5) complementors (other businesses from whom customers buy complementary products; products that are used in tandem or required together — like cars and gasoline, or from an online merchant’s perspective: an eCommerce site-build and fulfillment services for the products to be shipped), 6) the possibility that your product or service can be built or delivered differently.
A 10X force could be any of the normal forces, but an order of magnitude larger than what is expected. Dramatic examples of before and after general “inflection points” might be: Commuting to work: by horse, then car, now computer. Entertainment: by video rental, then mail, and now streaming. Shopping: from retail to online.
As referenced by Aditya Basu, we see examples of 10X forces as evidenced in the McKinsey Digital Report 2020 (DigitalCommerce360): “We have seen a 10 year growth in a mere 90 days for US eCommerce penetration. Online spending represented 18.6% of total retail sales for the first two quarters of 2020.” And in the BCG+ Deloitte Digital Report: “Consumers spent $861.12 billion online with US retailers in 2020, up 44% from 598.02 billion in 2019.”
Basu also reveals that 66% percent of B2B leaders now believe eCommerce solutions are essential, up from 48% pre-COVID. He emphasizes: “what may be most interesting is: the shift in numbers serves as a dramatic example of the ‘Before’ and ‘After’ of a 10X force. When you consider ‘10 year growth in 90 days’ and ‘a $260+ billion dollar increase in sales’ you begin to get an idea of the sales velocity reached by business leaders that were able to steer into the storm and capture the 10X force. As for those who were blown off course, or completely knocked over — there may still be time to get it right, but you need to be decisive, and can accelerate your rebound by partnering with those who navigated the crisis early.”
Grove explains how 10X forces may sneak up in plain sight to capsize your business before you even realize what’s happening. He also explains how to be nimble so you can be better prepared for the squalls, and not only come out on the other side, but far ahead of the beached wreckage and flotsam left behind. Strategic Inflection Points are essentially the moments where the future is made. But since it’s hard to predict which way the wind blows, or whether a breeze will turn into a gale, it is often difficult to separate the signal from the noise when it comes to 10X forces. Grove makes suggestions on questions to ask yourself in the context of competitors and complementors (Chapter 6 of “Only The Paranoid Survive”), as well as recommending the importance of looking to middle-management, and sales (from the ground to C-suite) to get a “barometer” on what storms may be brewing.
“Grove’s 10X force on retailers is important from a competitive standpoint, but we often find that organizations are sometimes competing against themselves because they are not efficiently operating the three most important levers to ensure an excellent Customer Experience; those levers being Brand, Behavior, and Book of Record Experience. Customers not only interact with your company’s Brand, revealing Behavioral insights, but also with Back Office operations. Customer experience defines the digital economy and goes beyond creative design and content management. All three experiences must be tied together to drive consumer engagement.” says Amanda Volz, Vice President of Sales at BORN Group. She continues, “In today’s world customers expect retailers to provide them a seamless shopping experience that’s safe, efficient, but most of all omnichannel. In other words, retailers must be experts in ALL the ways their customers shop: online, mobile, brick and mortar, in order to keep up with the behavioral shift that COVID has forced on both retailers and customers. Those who are able to accommodate all of these models have had the most success in navigating the last 18 months.”
Basu offers further advice on how an eCommerce strategy is pivotal to making sure you do more than tread water: “In order to have the most leverage to seize short term opportunities and win new digital-first shoppers, you must conceptualize how to build and scale your eCommerce blueprint. You don’t need to get it perfect, but planning for contingencies, good and bad, makes it possible for you to at least be prepared for whatever comes next. Though it’s impossible to be ‘prepared’ for everything, you can set yourself up to handle challenges robustly, or even be in a position where every obstacle can become a step higher on the road to success.”
Basu continues: “Ultimately, the big question when dealing with inflection points, 10X forces, and planning ahead in general is: what to focus on? In life, as in business, weathering a storm is not just about navigating a crisis in realtime, but the preparations that make it possible for you to do so. As the conditions of an actual storm, pandemic, or other crisis make it impossible to simulate and predict, the best you can focus on, in the now, is 1) to make sure everyone works together efficiently, that you have the people willing and able to rise to the occasion when one presents itself. 2) to make sure that all your “instruments” are in tip-top shape, and that your crew operates them expertly. This might come in the form of certifications, cutting edge tech, best practices and data management. 3) have a compass to make sure your organization is always aligned onward and upward; at BORN we embrace the Stella Framework (as referenced by Amanda Volz above) which keeps the Customer Experience (CX) front and center. While an individual’s customer’s experience may be unique, the sum total of all experiences combined represents the pulse of your company, and how it can stand up to unforeseen stresses.”
At BORN we’re like a racing yacht, crewed by seasoned and certified professionals with a love of the sport, helping you get where you need to go, fast and in style… we can turn on a dime, equipped with the best-in-class partner solutions like Arctic Fox for Salesforce, Bulldog for Adobe, Eagle for SAP, Bison for ShopifyPlus and more. We also work with the sharpest partners in the world so we can always see beyond the cloud; through our sister agency Pininfarina we offer physical design.
“The retail experience must continue to evolve while focusing on the magic mix of the tangible and intangible. eCommerce and the online experience is a fundamental part of the equation in creating a strong and recognizable Brand personality in the market.” says Paolo Trevisan, Vice President of Design at Pininfarina of America. “While we continue pursuing our passion for timeless design solutions across various verticals including automotive design, transportation, industrial design, architecture and interiors, the synergy with BORN can allow for an experience-focused digital approach that will continue to push the boundaries of our human-centered approach.”
Wherever you are, and wherever you’re going, BORN helps you capture a 10X force to fill your sail and ride the wave.
*”eMarketplaces: Unlocking The Value of Platform Economy” read Aditya Basu’s original article in its entirety here: (https://www.borngroup.com/views/emarketplaces-unlocking-the-value-of-platform-economy/)
**”The Three Most Important Levers” … read about The Stella Framework here (https://www.borngroup.com/news/the-stella-framework-2/)