By Joanna Perry | Global Head of Marketing

Large, multinational brands are increasingly looking for an ecommerce team structure that will support their plans to trade more effectively cross-border online. We highlight the benefits and challenges of three key ecommerce operating models.

Consumer brand clients who want to sell directly to end consumers online, particularly in emerging markets, and support their retail partners frequently struggle to settle on an effective team structure.

Our Global Ecommerce Operating Models Report, highlights eight models in use by consumer brands tackling digital transformation. Three of these models are particularly applicable to brands wanting to sell cross-border online.

Marketplace Accelerator Model

In this model, sales via marketplaces, such as Amazon and China’s Tmall, are handled by a separate team within the brand to those who look after direct sales and 3rd party retailer relationships.

Often relationships with the largest marketplaces, can be handled at a regional or global level, and knowledge of how to optimise the brand’s marketplace presence, listings and advertising can be concentrated. It’s used by brands who want to maximise sales via marketplaces, and/or those who want to open up new markets for their products quickly using marketplaces.

This model allows the development of stronger marketplace relationships and concentrates marketplace expertise. However, it means that staff in other parts of the business will find it harder to benefit from cross-border learnings – particularly around consumer behaviour in other markets – that the marketplace team are developing.

In addition, this model can cause channel conflict, if the marketplace team are not aligned on pricing and promotions with their colleagues selling via the brand’s own website or retail partners.

Direct-to-Consumer Accelerator Model

In the Direct-to-Consumer Accelerator model a brand will separate the teams running its own website, from those selling via third party retailers and marketplaces. Often this model is used by FMCGs and CPGs who have bought or developed a direct-to-consumer digital brand, and don’t want to slow its growth.

This model allows the brand’s ecommerce website to focus on growth, react to changing consumer behaviour and innovate. For brands within larger businesses who only sell direct-to-consumer online, it also gives them greater flexibility to deliver market-leading customer experiences. 

Regional Dedicated Ecommerce Team 

We see this model used by global brands with regional teams covering multiple markets, for instance an EMEA or Latin America ecommerce team. It works well where each country within the region has a similar customer profile, and where it is not possible or necessary to have dedicated ecommerce teams for each market.

Often the regional team will have a single infrastructure – such as web platform and even a single distribution centre – for the region, although certain team members may have responsibility for a single market.

This can be a lower-cost model for trading online in multiple markets if resource and expertise can be shared; and allows for the development of regional relationships with online marketplaces. However, again it can lead to channel conflict if the ecommerce team’s strategy is not aligned with the rest of the organisation.

To discover five other ecommerce operating models, you can download our Global Ecommerce Operating Models Report here

Or, if you’d like to find out how Practicology can help structure your ecommerce team more effectively, please contact us at hello@practicology.com.

 

Related Blog Posts

Four common Amazon strategy mistakes and how to avoid them
Four common Amazon strategy mistakes and how to avoid them

We examine where brands commonly go wrong when launching on Amazon, an…

Achieving Amazon trading excellence: key advice from our breakfast event
Achieving Amazon trading excellence: key advice from our breakfast event

Sharing the key Amazon trading advice discussed at our latest breakfas…

Practicology and Alibaba’s top Tmall trading tips
Practicology and Alibaba’s top Tmall trading tips

Sharing the top Tmall trading tips from our recent breakfast event wit…