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Power forward: Five make-or-break truths about next-gen e-commerce
By Arun Arora | McKinsey & Company | October 8, 2024
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3 key takeaways from the article
- E-commerce is undergoing a fundamental change that is reshaping how customers buy and companies sell. While generative AI (gen AI) has grabbed the attention of executives over the past year, a quieter wave of technology-driven innovation is washing over almost every aspect of e-commerce.
- This technology infusion is powering a much more comprehensive and integrated version of next-gen e-commerce, in which a broad ecosystem of capabilities—such as R&D, logistics, warehousing, and marketing and sales—are increasingly interconnected. With these deeper and broader integrations comes the promise of better performance leading to greater productivity, higher profitability, and better customer experiences.
- A study of 500 executives in B2C and B2B companies across more than seven sectors in Brazil, China, Germany, the United Kingdom, and the United States shines a bright light on five truths about next-gen e-commerce that are the cornerstones of success: invest like an attacker, You can’t outsource your way to victory, Technology is strategy, You can’t know your customers if you don’t know AI, and Lead from the center but empower teams.
(Copyright lies with the publisher)
Topics: Strategy, E-Business Model, E-commerce, Technology, Artificial Intelligence
Click for the extractive summary of the articleE-commerce is undergoing a fundamental change that is reshaping how customers buy and companies sell. While generative AI (gen AI) has grabbed the attention of executives over the past year, a quieter wave of technology-driven innovation is washing over almost every aspect of e-commerce.
This technology infusion is powering a much more comprehensive and integrated version of next-gen e-commerce, in which a broad ecosystem of capabilities—such as R&D, logistics, warehousing, and marketing and sales—are increasingly interconnected. With these deeper and broader integrations comes the promise of better performance leading to greater productivity, higher profitability, and better customer experiences.
To better understand how this more dynamic and tech-driven story is evolving—specifically, how companies are evolving their e-commerce strategies and which moves are making a difference— the authors surveyed 500 executives in B2C and B2B companies across more than seven sectors in Brazil, China, Germany, the United Kingdom, and the United States. Their analysis focused on the actions of leaders—those who reported that their businesses are growing at more than 10 percent above the sector average—to learn where they are distinguishing themselves from also-rans. The analysis shines a bright light on five truths about next-gen e-commerce that are the cornerstones of success:
- Invest like an attacker. Leaders act like attackers, investing in particular in new technologies—such as gen AI—and new channels to better understand and serve their customers. Leaders outstripping their peers in three areas in particular: technology and gen AI, Digital channels, and Shopping events.
- You can’t outsource your way to victory. Leaders are not dependent on vendors for technology needs; instead, they build up their in-house talent to innovate at pace.
- Technology is strategy. Solid tech foundations give leaders the speed and flexibility to innovate.
- You can’t know your customers if you don’t know AI. Leaders are turning to AI to get an edge with complex shopping journeys and evolving standards.
- Lead from the center but empower teams. A centralized operating model provides the necessary scale but is only effective if it enables autonomous e-commerce teams.