A game of thrones: How Ecommerce conquered the corporate Westeros
Written by: Joel Marc
Time to read 7 min
In large corporate organizations, the kings of each domain rule absolutely. Ecommerce is new compared to Retail, IT, Marketing… so how did it conquer these stalwarts?
This is an article written from my experience working within and observing large retail organizations. It's remarkable the impact that Ecommerce has had on corporate retail in less than 10 years. It's more Game of Thrones than one would think.
War 1: IT vs Marketing - The humble origins of ecommerce
The origins of ecommerce come from the IT department. In the early days of ecommerce, the brick-and-mortar Retail channel was responsible for sales and the IT department managed the business's website code, with Marketing providing the content. These were the pre-SaaS days when ecommerce software was hosted locally on servers and required extensive maintenance by IT.
Around the same time, Marketing software was rapidly developing and becoming user-friendly enough that Marketing didn't need IT, developers, or ‘techie’ people to run their lead generation, email marketing, or advertising campaigns.
As laggards always do, IT tried hard to maintain control of the Marketing software (after all, this was their headcounts, budgets, and leadership roles at stake) but progress is inevitable and IT's bull-headedness for the old way signed their death warrant. The advantage of SaaS subscriptions led to Marketing to just sign up for and use the Marketing software directly. This created the MarCom tech stack owned by Marketing and independent of IT.
Ecommerce software was a late bloomer, primarily due to the size of hosted solution incumbents like SAP and Oracle. Demandware was one of the first SaaS ecommerce systems to gain mass retailer traction, but they were bought by Salesforce in 2016 and rolled into the monstrosity that is Salesforce, requiring IT to manage it.
Around the same time, Shopify started adding core enterprise features that appealed beyond the mom-and-pop shops that they had been founded on. Shopify also refused to be acquired by the laggard software giants, sensing there was a new way. Like SaaS Marketing products before it, all you needed was a credit card to get started, and Marketers LOVED that. The control and speed that Marketers got without needing to go through IT for ecommerce was empowering. Many upstarts and mid-sized companies switched to Shopify for this agility.
From there, IT had lost the war. Ecommerce was now firmly in the MarCom tech stack of the Marketing department…but not for long.
War 2: Marketing vs Retail - Ecommerce gets an identity
Fresh off its victory against IT, Marketing quickly found a new adversary: the Retail department. Getting a profit center for the first time quickly made Marketing leaders ask for compensation and bonuses tied to their new sales channel. Retail leaders meanwhile began to see some cannibalization of their sales being taken by ecommerce, now owned by Marketing. At the same time, customers began returning ecommerce orders in-store, leading to Retail store managers complaining that their store targets were being undercut by ecommerce returns. Channel conflict was brewing all the while ecommerce continued to grow due to its ease of use and customer convenience.
Within Marketing departments, ecommerce quickly became complicated, with data analysis, SEO, SEM, inventory accuracy, shipping, and code management. Marketing, being gifted in identity, culture, and brand, gave ecommerce an identity, turning it into an Ecommerce team. These teams were primarily younger tech-savvy marketers who had grown up running their own WordPress/WooCommerce sites and side hustles. They were more data-attuned, could hack a bit of code, figure out integrations, and understood the needs of Marketing. The new Ecommerce Team attacked its mission of managing the ecommerce experience with hunger but the pace was still slow, taking 6-12 months to develop and launch initiatives.
The customer demanded more and more faster. They wanted the ecommerce experience to be seamless, like all the other tech they used (at the time: Facebook, Uber, Instagram pre-FB purchase). Customers were frustrated that inventory sizes they saw in stores weren't available online, or that many products weren't available online at all, or that size charts weren't accurate, and as a result, return rates soared.
Retail pounced. After all, sizing, returns, logistics, and inventory were the expertise they had been building for decades. The Retail department convinced the C-Suite to move ecommerce under Retail, no different than a wholesale channel, or other channel partnership. The burgeoning Ecommerce teams were conquered and moved over to their new Retail overlords… much to their dismay. Their founding history and relationships with Marketing were deep. But Retail's win wouldn't last…
War 3: Retail vs Omni-channel - Ecommerce builds a rebellion
Having vanquished Marketing, Retail turned its attention back to what it knew: Brick-and-mortar stores. After the initial introduction meetings, Ecommerce was flat-out ignored. In fact, when Ecommerce asked for budgets, resources, or salaries to match their tech and advanced knowledge, they were treated like Retail Store staff. When Retail had to make cuts, Ecommerce was always on the block, even though their revenue grew every year.
Retail, which was famously low-tech, high-touch people-focused, struggled with these high-tech, data-minded, expensive nerds who kept making them look inept with their smart questions and topics that Retail had no experience with.
The conflict grew again and the, now senior, leaders in Ecommerce with one war under their belt began to plot their rebellion. Rebellion itself wasn't hard, but winning against a powerful adversary would be extremely difficult and dangerous. Losing would mean further cuts and corporate execution for Ecommerce's leaders. Retail owned all revenue for the company and the C-Suite would hold Retail's view above all else if revenue was at stake.
So Ecommerce made their rebellion about revenue.
Ecommerce chose a word to represent their rebellion that Retail would shudder at: Omni-Channel. It was the perfect coup. A revenue war that Retail was ill-equipped to fight.
While Retail had been just opening and closing retail stores as they had always done, Ecommerce was acquiring arms…lots of arms, by the way of data. As the digital natives they were, Ecommerce began parsing reams of customer data about the customer experience. This data was a click away, unlike in retail which had little-to-no customer insights. The Ecommerce data nerds started turning this data into an arsenal of world-ending nukes. At the same time, they began to excitedly talk about omnichannel and what competitors were doing. This mysterious word began to make its way around the organization. The concept was simple: customers wanted a seamless way to shop. Eventually, the C-Suite was intrigued and invited the band of rebels into the arena with their Retail overlords to explain omnichannel.
Ecommerce was ready. Armed with exceptional year-over-year sales growth, and a shit ton of nukes, er data, the rebels presented a picture of a new customer. Customers didn't want to shop by channel. In fact, they didn't even see a Retail channel, an Ecommerce channel, or a Wholesale channel. They only saw one brand, an omnichannel. Customers wanted to shop anywhere, at any time, in any way they wanted, and they expected a seamless customer experience wherever they were. The data proved it, and if there's one thing that's near impossible for leaders to ignore, it's data.
And just as everyone was nodding and agreeing that omnichannel must be done, Ecommerce stated that there was no one more equipped with the Tech, Marketing, and Retail experience needed to knit together an omnichannel customer experience.
The C-Suite agreed.
With their nukes pointed at Retail, Ecommerce gave the C-Suite a very large budget number.
The new world order: Ecommerce independence
With its newly empowered independent budget, independence from Retail, and senior profile among the C-Suite, Ecommerce began creating omni-channel experiences quickly. It started with creating truces with Retail and IT.
With Retail, Ecommerce agreed to be a “shadow” P&L within Retail's larger P&L, giving Ecommerce budget independence but also giving Retail credit for the sales that Ecommerce generated. There's nothing senior leaders like more than bonuses and Ecommerce bought the long-term servitude of Retail by its impressive growth record. From there, Retail voted with Ecommerce.
With IT, Ecommerce provided a tantalizing offer. After years of decline and being relegated to managing internal systems like email and cyber security, Ecommerce presented IT with an offer they couldn't refuse: align yourself with the fastest growing department and get credit for some technical innovations. Ecommerce would own the Omnichannel Tech Strategy roadmap and IT would staff the specialists to build it. Seeing the possibility of larger budgets and a renewed C-Suite profile, IT voted with Ecommerce.
With its new vassals, er, “allies”, Ecommerce began to build, rapidly. The first was inventory integrity. Inventory had to be accurate everywhere. Next was BOPIS, buy online pickup in-store, then return anywhere, then store as a DC. Each of these initiatives required extensive cross-department support and Ecommerce navigated each one with the singular goal of a seamless customer experience. Small battles occurred with holdouts, traitors, and laggards but ultimately, Ecommerce prevailed.
Ecommerce was now its own country, with its own budgets, language, and culture within the larger continent of Retail. In cases where there was no Retail, Ecommerce remained within the larger continent of Marketing or even won a seat in the C-Suite.
In 2020, Ecommerce was ready. When the world shut down and Retail ceased, Ecommerce coolly stepped up to the plate and knocked it out of the park, further cementing its position and longevity within the corporate arena.
As with all things, progress is inevitable. VR holds a lot of promise, as does AI, and by the end of the 2030s we'll have a better sense of how these technologies will shape shopping. Ecommerce has not yet reached maturity, it has a generation still to go, but it will eventually become a laggard. At that point, it will either be reborn or die and be displaced by the next wave of mass consumer behaviour. No one is king forever.
Written by: Joel Marc, Head of Ecommerce Strategy
Joel leads EASY Ecommerce, an ecommerce agency for Fashion and DTC brands needing deep retail expertise from their agency partner. Joel is an experienced omnichannel retail executive having lead ecommerce channels generating $1 million to $500 million. Joel regularly writes and speaks about ecommerce and omnichannel strategy.