Retail Leaders Treat E-Commerce Differently

What separates the best from the rest when it comes to e-commerce success? Leading companies don’t treat e-commerce as an add-on to their regular business; instead, they embed it as a part of their core capability. These organizations integrate digital into how they develop, market, and sell products and services to customers wherever they search and shop, according to a McKinsey article. The same certainly holds true, I would add, for the tax automation that supports e-commerce platforms. 

Leading companies are making prudent investments in e-commerce infrastructure; they’re not focusing on cutting costs in this area. According to McKinsey’s research, almost 20% of leading businesses – companies growing at 10% above the market average – plan to spend more than $100 million on e-commerce technology infrastructure, compared with about 8% of “laggards”. Leading businesses remain finely tuned to opportunities related to next-generation e-commerce technologies. This explains why generative AI is a priority for about one-fifth of leaders, while less than 5% of idlers are making a similar push.

Advanced technologies bring additional benefits in another important requirement for e-commerce success: acquiring and retaining top talent: “If companies want to bring in top talent, they need to give them cutting-edge technology to work on,” the article’s author, McKinsey Senior Partner Arun Arora, points out. Employees want to work on technologies that can help them build their skills. Businesses that rely on monolithic e-commerce solutions may find that they’re driving away top talent, and few organizations can afford to let that happen. While agencies and vendors will always have a role in e-commerce activities, in-house experts can deliver the speed and flexibility needed to thrive in today’s dynamic digital marketplaces.

Technology is a key driver of e-commerce success, but it’s just one component of what should be an integrated approach. “Effectively developing, deploying, and improving tech programs require companies to rewire how they work,” Arora adds. “How companies develop meaningful strategies, work across wider swaths of the organization, use their data more effectively, and scale programs to different regions, products, or customers are all critical building blocks for creating value.”

In a recent post, I mentioned how commerce is set to become more seamless in the near future. The way in which leading retail companies integrate e-commerce into their core business model reflects this desire to deliver a frictionless shopping experience across all channels.