Are you a visionary or a laggard?
A pragmatist or a conservative?
And if you are one or another, what does it mean for your chances to implement a successful D2C strategy?
Chances are, if you had a class in business, new product, or innovation strategy, you’ll recognized these terms from Geoffrey Moore’s classic book “Crossing the Chasm”.
Published more than 30 years ago and still recognized as widely relevant today, Moore’s work focused on how new, disruptive products, technologies and practices are adopted by the market.
In a vast oversimplification, we could say that Moore defined three phases the market adaptation for new product and technologies. In Moore’s approach, these phases represent potential customers and their organizational outlook towards change. What’s interesting is that these same three phases could also be used to describe the types of people you’ll be dealing with to create a D2C transformation in your organization.
- Visionaries: These are the innovators, early adopters and lead users of the technology. They are looking to leverage the technology to create break-through competitive advantage.
- Pragmatists: These folks recognize the advantages created the new technology change and seek to leverage them to improve their organization while minimizing risk.
- Conservatives: These are the late comers, conservatives, laggards and skeptics who will adopt the technology only when no other alternative exists.
Take, for example, brands selling and fulfilling products direct to consumers.
Early on, D2C was the domain of the visionaries who saw D2C as a strategic opportunity and were willing to take a risk on the technologies involved because of the strategic leap forward they enabled. Think the original digitally native brands or innovative, legacy brands like Nike which decided to pioneer a D2C approach that rejected Amazon and disrupted their online and traditional sales channels.
Then came the chasm.
The chasm is the gap between the early adaptors and innovators and the transition to mass adaptation and mainstream success.
It’s safe to say that D2C had leapt the chasm.
D2C may not be the norm yet for all brands, but it is the new normal for their customers.
Consumers expect to see their favorite brands everywhere they shop. They expect to get their orders in 1-2 days, or to pick up their purchase at a brand’s local retailer. They expect brands to offer a tailored, end-to-end D2C experience.
Cue the pragmatist.
It’s no longer the visionaries that are leading the D2C charge for brands. It’s the pragmatist. And if you are reading this, chances are you are one of them.
The pragmatist recognizes their customer’s emerging – or already full blown – demand for a D2C experience. The pragmatist yearns for the competitive advantage pioneered by the visionaries…but to a pragmatist, “risk” is a negative word. They seek to minimize risk, choosing field-tested solutions with good safety nets in place.
Part of the reason the chasm exists is because innovators and pragmatists want very different things. Innovators want to leverage new technology or processes as a change agent and to create a radical discontinuance between the old and new ways of doing things.
Pragmatists, on the other hand, want to leverage change to create a productivity improvement for their operations while minimizing discontinuity along the way. Smart brands know: the D2C transformation should be designed to enhance, not overthrow, the established business.
But this is scary territory for a pragmatist and the team around them – full of conflicting demands from sales channels and consumers and inflated claims from vendors. There are no well-worn paths (those come later).
As a pragmatist, how can you rally your team to support your vision of D2C growth and the platform and system changes that you need to make it happen?
For more than a decade, Etail Solutions has worked with both innovators and pragmatists – and often those who walk the thin line in between -- to create, optimize and scale D2C ecommerce solutions.
Driving organizational change is a complex topic and out of scope for this article. But where selecting a D2C operations platform is concerned, we’ve learned a thing or two about a pragmatic approach for marshalling internal stakeholders to drive getting D2C decisions executed.
Whether you’re a visionary seeking market revolution or a pragmatist looking for organizational transformation, here are some suggestions for implementing your D2C vision.
EMBRACE THE SKEPTICS
Any team will probably have its share of skeptics. In fact, some departments are often known for their skeptical outlook: IT, Finance or Legal come to mind. They’ve heard all the vendor promises. Seen them fall short. Been there. Done that. Got the scar tissue.
Embrace the skeptics. They’ll ask the tough questions. But when they are convinced, the rest of organization often falls into place.
ARTICULATE THE BIG PICTURE
Ecommerce operations platforms are designed to improve operations. That means addressing problems such as shipping costs, warehouse utilization, cartonization, 3PL integration, inventory ROI, inventory replenishment and a host of other issues. Interesting to Ops and Finance leaders…not so much for other stakeholders.
Your ability to deliver a convincing case for an D2C operations platform hinges on how well you can show that the platform investment helps solve other skeptical teammate’s problems and helps them reach their goals. Otherwise these stakeholders may not see your platform investment as a major priority right now.
Once you understand their main objectives, you can work a financial case that lines up with their goals.
FOCUS ON ORDER OPTIMIZATION
ROI is important. The good news is that improving ecommerce operations often has a quick, positive effect on ROI.
This is especially true when you consider order optimization as a key metric for your new platform.
Order optimization seeks to do just that: optimize every order to produce the highest margin possible while still meeting customer delivery or other requirements.
Because order optimization touches every order with the intent of driving margin improvement, ROI payoff occurs quickly.
HIGHLIGHT TIME TO VALUE
The metric of time to value – the span of time between when a replatforming project begins and when it delivers value – can be as important as ROI.
No leadership team wants to wait long to see a return on its investment. But more importantly, in the lightening-fast evolution of ecommerce, competitive advantage comes to those that can move quickly.
While ripping-and-replacing current systems is sometimes the right option, consider platforms designed to leverage and integrate with the systems you already have in place. It’s less expensive. Less risky. And often provides greater flexibility to meet unforeseen integration challenges down the road.
Also make sure you can articulate how long implementation and ramp-up will take, along with the training provided. True time to value occurs when everyone concerned in your organization is leveraging the new platform and it has become just the normal way of doing business.
But no matter which skeptical stakeholders you want to convince, make sure to manage expectations about time to value. You won’t just flip the switch on order optimization and produce results. Ecommerce operations are complex and a certain amount of fine tuning is needed for any successful integration.
BE READY TO MOVE FORWARD
Have your next steps ready with estimated timeframes and required resources. Momentum is often its own reward. Once people are onboard, keep them there with forward progress.
Pragmatists are the pioneers in blazing a trail from the cutting-edge dreams of visionaries to the day-to-day reality of executing complex D2C strategies for existing, legacy brands. The stakes are often high: these brands have millions of dollars and decades of years invested in building brand equity.
One proven strategy is to learn from those who are ahead of you on the curve. Etail’s “D2C Leadership Now” webinar series features live briefings with D2C leaders. Check out our briefing on “Identifying IT Barriers to D2C Growth: An Insiders View on What It Takes to Scale D2C". Etail CEO Michael Anderson hosts Chip Gaetano, VP of IT for global baby products leader Goodbaby International – the company behind Evenflo and several other leading baby-products brands.
They’ve set an ambitious goal of growing their D2C capabilities by 400% and Chip agreed to talk to us about what they’ve learned.