What eCommerce trends and capabilities will start dominating the online marketplace? Claudia Johnson, Vice-President of Capability Acceleration at Flywheel Digital has a few thoughts:

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Could you tell us more about yourself and your role at Flywheel Digital?

I’ve been in eCommerce for 15 years with a blend of manufacturer, retailer, and agency experience and I love it! I joke that once you dabble in eCommerce you either convert to obsession or run for the hills; there really is no medium. Over the years, I have found my way into projects and roles across a wide range of functions, including supply chain, marketing, pricing, innovation, product, analytics, tax, legal, and customer service. I’ve enjoyed working across every region and lived in Italy while working in the EMEA business for several years.

What gives me energy is learning and solving problems. Some of my proudest accomplishments include my early days at Target.com and Kimberly-Clark, hitting record sales growth, and also when I was creating “new things” like e-Boxtops at Walmart, a pan-European supply chain network, e-packs, a PIM tool, and most recently our Ascential Digital Commerce Connect platform.

In my current role as Vice President of Capability Acceleration at Flywheel Digital, I am building the next generation of eCommerce capabilities. My team and I aim to drive a competitive advantage for our clients by remaining on the cutting edge of the industry, fostering a culture of curiosity, anticipating change, and driving how we navigate that change. In fact, our team Slack channel is called “changemakers”!

What are some of the top eCommerce capabilities that businesses are prioritizing more today?

Despite some unique pressures in 2022, we continue to see the prioritization of digital media, including retail media. This is evident in how brands are allocating their dollars. In a February 2022 article from WARC, they shared that “Altogether, Alphabet, Meta, and Amazon accounted for 71.2% of all online ad spend in 2021, up from 67.8% in 2019. WARC Data’s latest forecast puts total advertising growth at 12.5% in 2022, with e-commerce set to be the quickest-growing medium.

This emphasis is in part due to the impact this media has on sales, but also as a result of the rich data and insights available on these three platforms not only around effectiveness but consumer behavior more generally. Let me break this down a little bit more, starting with effectiveness which I actually have one more point on that I’ll get to later.

At Flywheel, we recently ran some advanced modeling across 4,000 Amazon ASINs over a six-month period to identify which levers have the largest impact on sales. What we found is that media spending is #1. Of course you can only grow so much if you don’t have a strong product offering and content to help convert, but media is the ultimate amplifier. Retail media also has a proven impact on offline sales, many brand and platform partners have reported a ~$6 return in store for every $1 spent in advertising online. This isn’t surprising given the reach of Amazon and the fact that over 50% of all product searches start there, not Google.

The second reason retail media has grown in priority is because of the data and insights available. Several major retail platforms have enabled self-service advertising platforms and continue to expand their API services and data availability. This allows for brands to test at very specific grains to optimize their media, content, pricing, and portfolio strategies. Platforms and retailers are also getting more generous with their consumer insights data, including post-event reports and ongoing access to data like demographics, baskets, and paths to purchase. Amazon specifically has also launched AMC or Amazon Marketing Cloud. AMC is a secure, privacy-safe, and cloud-based data clean room solution that not only allows brands to leverage the rich data from the Amazon ecosystem but to load non-Amazon data sources into the private platform to run their own custom queries. With this, brands can explore topics like – consumer journey, on-site to offsite impact, lifetime value, and media mix.

Beyond retail media, we are also seeing a shift in how brands approach other media types, namely those targeted in the upper funnel. I was recently able to attend the Cannes Lions Festival of Creativity, and having been there about 12 years ago, the change in priorities was very clear in that context. There used to be a firm delineation between brand building/marketing and conversion/sales. This has been driven by consumer behavior, platform functionality, and how manufacturers structure their organizations.

However, at Cannes Lions this year, Amazon, Facebook, Twitch and other digital platforms had a significant presence, and the conversations within many of the sessions were centered around how we bring in the rigor of measurement and effectiveness traditionally found at the bottom of the funnel into the upper funnel as well. WARC, one of our sister brands, recently published an interesting white paper on this topic in partnership with Gurdeep Puri called “The global state of effectiveness,” which essentially focuses on how marketers can demonstrate the commercial value of Creative Excellence and align their stakeholders with their marketing plans. Kind of a long-winded answer there, but the point is that sales and marketing more than ever, have to be in the same boat, rowing in the same direction. If they aren’t, then they just may find themselves spending millions on demand generation and driving those shoppers to a brand.com with broken links and out-of-stock!

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Can you talk about the ways in which you’ve seen eCommerce evolve the last few years and how you feel eCommerce businesses will shape up to be in future?

We could spend all day talking about this, but if I had to choose one thing, it would be the intense pressure on the traditional silos within a brand/manufacturer. Historically, the “handoffs” between R&E, packaging, marketing, pricing, sales, and supply chain have been relatively clean – where one action ended, another started. In today’s world, where eCommerce is a priority sales “channel,” success is dependent on a collaborative approach where all of those functions partner to do annual vendor negotiations, build annual plans and optimize as close to real-time as possible throughout the year.

Similarly, the path to purchase for a consumer has historically been very linear, allowing, again, for those “handoffs” between touchpoints to be relatively seamless. Now, if you’ve been to a conference in the last 10 years, you’ve seen a slide that says “the path to purchase is no longer linear”, so I won’t beat that point to death, but the changes we are seeing from platforms is making that more and more dramatic. Let’s take one specific example, social commerce.

Obviously, TikTok is top of mind there, with oodles of case studies around the impact of viral content driving outsized sales performance. However, they are continuing to evolve their platform and recently announced new shopping ads (sounds like retail media, right?!). Likewise, what is Amazon working on? That’s right, a TikTok-like media feed. The point being, while the lines within the walls of the manufacturer continue to blur, so do the lines between the touchpoints for the consumer and the role those touchpoints play in the path to purchase. The future of commerce is digital, and a brand’s ability to string together a cohesive shopper experience will be a differentiator.

For brands looking to optimize their overall digital commerce offering what would you share with them?

I’ve been in the Digital Commerce space for nearly 15 years, and for those of us who are digital veterans, we thrive in constant change. That said, you learn that there is always an awful lot of noise. Does it really matter to the business if retailer X is delivering milk via a drone, probably not, at least not right now? So I’ve been using a saying with our clients and the Flywheel Digital team “bear closest to the tent.” When brands start to get distracted by shiny objects, just remember that the fundamentals of good shelf placement (paid and organic), consistency in stocks, a strong product offering, competitive price, and compelling content are always the right place to spend your time and energy. Digital Commerce is not sexy, it is just executing fundamentals flawlessly while occasionally amplifying with some shiny objects!

When it comes to service-based businesses and their overall digital experience: what do you feel still largely lags in today’s industry?

The typical Flywheel Digital client is selling a product, not a service, but my observation is two parts. Firstly, the future consumer is clearly interested in authentic, meaningful relationships with brands they believe in. This is evident as you look at the DTC/digitally native revolution over the last few years, but many incumbent businesses still struggle to find their voice in that mix. Secondly, finding the right balance between leveraging technology and prioritizing people-based services is challenging. We’ve all had an experience where we are yelling at a bot “representative!” – the challenge is how do we allow technology to build richer, better experiences for their consumers but not eliminate the magic that made them successful in the first place.

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Do you have any last thoughts on marketing/martech/ or general eCommerce takeaways before we wrap up?

 Yes, just one thing. It is still surprising to me how intimidating this space is for folks, especially outside of the sales team. Digital Commerce is about curiosity, testing, and “failing forward.” There is a reason Amazon says, “It’s Always Day One ”. The beauty of Digital Commerce is that someone on day 1, literally, will know something that I, as a 15-year veteran, would not. So be curious but humble, don’t be afraid to ask a lot of questions, and know that you will never learn it all!