By Stephanie Parsons | Principal Consultant

Creating a digital organisation structure that is optimised to maximise online sales has never been a more pressing issue for consumer brands.

Online is predicted to account for more than half of total retail sales by 2028 - at least in the UK - according to Retail Economics. Global consumer brands must consider roles, responsibilities, accountability and ownership in their response to this structural shift in the retail industry.

Our clients regularly ask us how they should structure themselves, and where responsibility for digital should sit. We have highlighted five of the questions brands ask us about their digital organisation structures, and how we go about addressing them.

Where do we start with evolving our digital organisation structure?

It’s a chicken and egg problem, as businesses are unlikely to change their structures unless they can see that digital is already driving topline growth.

Educating the wider business on the benefits of a model that supports digital sales is crucial for stakeholder buy-in; particularly for functions that directly touch ecommerce such as product, content, data management and digital marketing.

Building engagement and understanding is particularly important for organisations that have digital capability gaps.

Developing a clearly defined global ecommerce operating model is key, so that all those who support ecommerce and digital sales understand the part they play in activating the wider strategy.

Which business functions should sit at a local level, and which should be centralised?

Global organisations must decide where digital expertise sits within the business structure, not just from a functional perspective but also a geographical one. Our Global Operating Models Report highlights eight different models that brands and retailers have adopted, some of which work better than others once multiple territories add to the complexity of different functions. Three variants are shown below.

Digital Organisation Structure framework image

The digital organisation structure chosen should encourage alignment across teams so local markets can understand global needs and vice versa. We recommend brands develop operating principals for Global, Regional and Local teams with agreed ways of working.

What’s the tipping point for the evolution of a business structure?

The tipping point for embedding digital expertise at a country level can vary by geographical market depending on distance from the Global team, time zones, cultural and logistical complexity, language etc.

It will be based on the operational readiness of an individual market and its ability/desire to operate self-sufficiently. How quickly a market reaches the tipping point should be defined as part of the operating strategy, based on the commercial plan for the market and the size of the opportunity.

Where should responsibility for marketplaces sit?

Adding online marketplaces into the mix complicates the digital challenge further. As marketplace channels grow in importance, we see more brands hire dedicated resource to manage marketplaces or develop a “Marketplace Accelerator Model”.

In this model, sales via marketplaces, such as Amazon and Tmall, are handled by a separate team within the brand to those who look after direct sales or third-party retailer relationships. This allows the development of stronger marketplace relationships and concentrates marketplace expertise.

Is our existing RACI fit for purpose?

Whatever the structure you choose, it is crucial to develop and document the individual roles and responsibilities within your teams to identify gaps and overlaps in business functions. This process will help to head off problems and encourage acceptance by the wider organisation.

To truly deliver a step change in performance the wider business needs to understand and be responsible for delivery of the ecommerce opportunity (ideally they should be given key performance indicators that align with ecommerce performance too).

Download our Ecommerce Operating Models Report here.

If you’d like to find out how Practicology can help you to create a digital organisation structure that’s fit for the next phase of ecommerce sales growth, please contact us at hello@practicology.com

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