Biggest challenges facing e-commerce managers in 2024

However, there are positive signs for online market share, with key sectors such as online Grocery and Beauty, Personal Care (BPC) showing significant growth. In April, the total online Grocery category reached a share of 12.0% for the first time since July 2022. ASDA announced in their Q1 results that Online grocery represented 18% of food sales, driven by a 5.6% increase in the number of average weekly orders; their overall grocery share has seen a decline of 1% in the 12 weeks to July 7th though, and it will be interesting to understand this from their Q2 results.

As recently as mid-July, Kantar announced Ocado as the fastest-growing grocer for the fifth month in a row, improving sales by 10.7% in the 12 weeks to July 7th. Similarly, Boots saw strong growth across digital channels, with boots.com sales up 16.8% in their Q2 financial year result. Despite these positive trends, the Consumer Packaged Goods (CPG) category growth ambitions by the end of 2024 are far from guaranteed and online sales will need to play a key role in the overall success. Creating organic demand and identifying incremental sources of growth, outside of promotions, is critical. Let's delve into the top challenges and some tips on how to approach them.

1. PROMO & PRICING

The primary challenge remains managing promotions and pricing amidst changing economic conditions. Inflation is cooling across Europe, prompting brands and retailers to extend promotions to more CPG categories to maintain sales. However, is this significant increase in promotional activity sustainable? Private label penetration and oversaturated promotional strategies could result in a zero-sum effect, reducing profitability without truly creating organic demand. Here are some strategies to look out for when it comes to your e-commerce pricing and promotions.

• Monitor trends, as data is key: Knowledge is power! Ensuring you have a strong process in place to monitor your e-commerce pricing and promotions along with category shifts will enable informed decision making.
• Innovative Promotions: Move beyond simple price cuts by adding more value. For instance, Tesco’s partnership with ‘In Kind Direct’ involves donating a product for every two items purchased, adding a social impact element to promotions.
• Loyalty Programs: Strengthen loyalty programs to retain customers with the likes of Amazon Subscribe % Save and retailer loyalty cards. Retailers lean into loyalty with Asda reporting increased transactions involving their loyalty card and Boots also seeing year-on-year increases in Advantage card membership! Loyalty programs can drive repeat purchases and enhance customer engagement by offering personalised rewards and exclusive deals; without opting into such programs you run the risk of losing customer acquisition opportunities.

2. STANDING OUT

Ensuring visibility in a crowded online marketplace is difficult but critical for driving organic demand. This involves keeping up with media standards and getting creative with content to capture consumer attention.

• Creative Content: Develop engaging and creative content that stands out. Use multimedia elements and storytelling to create a connection with consumers. High-quality images, videos, and interactive content can make product listings more appealing and informative. Ensure your content is executed across your e-commerce channel using digital shelf analytics.
• Prime Online Real Estate: Secure prime online space through strategic retailer partnerships and optimised ad placements. It is key to ensure that the content is compliant with the agreed placements - having e-commerce monitoring and intelligence tools in pace to review this will help!

3. NAVIGATION & SHARE OF SHELF

Securing a share of search and digital shelf is increasingly difficult due to the rise of sponsored search capabilities and overwhelming advancements in AI. It’s never been more important to adopt a digital shelf analytics tool to track your performance and the movements of your competition.

• Search Optimisation: With platforms enhancing sponsored search functionalities, gaining organic search visibility has become more challenging. Combine a robust sponsored search strategy with optimised product display pages (PDPs) to improve organic search rankings. Use relevant keywords, high-quality images, detailed descriptions, and customer reviews to enhance SEO.
• Navigation: Ensuring your products are attributed to the correct listing pages, search terms and categories across your online retail estate will optimise navigation.
• Technology Integration: Utilise the latest technologies such as AI for better search functionality. Boots’ AI-assisted search engine, which helps consumers find the right product by asking questions, exemplifies how technology can enhance product discovery and improve the shopping experience. Additionally, augmented reality (AR) tools, like online skin diagnosis andvirtual try-on features, can provide a more personalised shopping experience.

4. MONITORING CONSUMER FEEDBACK

E-commerce managers must stay vigilant to consumer behaviour and market trends to address issues proactively. Consumers are becoming more knowledgeable about product ingredients and sustainability credentials, which poses a major challenge for e-commerce managers.

• Consumer Engagement: Maintain open communication channels with consumers, monitor reviews, and address concerns promptly to build trust and loyalty. Keeping track of any negative reviews with the help of e-commerce monitoring tools and engaging with customers through social media, and training retailer customer support teams can help. 

5. AVAILABILITY

Balancing customer expectations for fast, reliable delivery while managing costs and avoiding out of stocks is a significant challenge. E-commerce managers need to ensure that their supply chain is robust and responsive to market demands.

• Inventory Management: Implement e-commerce monitoring systems to track out-of-stock (OOS) items and ensure timely replenishment.

CONCLUSION

Addressing these challenges in 2024 requires e-commerce account managers to be proactive, strategic, and adaptive. By focusing on innovative promotions, standing out with creative content, optimising for search, engaging with savvy consumers, and ensuring product availability, businesses can navigate the complexities of the evolving e-commerce landscape and drive growth. Leveraging e-commerce monitoring and intelligence tools will be essential for e-commerce managers to succeed in the competitive market.

RESOURCES:

Households save £1.3 billion on supermarket deals (kantar.com)
https://corporate.asda.com/newsroom/2024/17/05/asda-updates-on-q1-2024-trading-delivering-continued-growth-driven-by-investment-in-value-and-george
https://www.kantar.com/uki/inspiration/fmcg/2024-wp-falling-inflation-football-and-fake-tan
Boots UK - Boots positive momentum continues with excellent Christmas and digital growth driving strong Q2 results (boots-uk.com)
https://www.linkedin.com/posts/-tesco_more-families-than-ever-are-struggling-to-activity-7191821276343066624-EzPH?utm_source=share&utm_medium=member_desktop