Key Points for Utilizing E-Commerce Sites and Implications for the Future

E-commerce Sites Transforming into Marketing Platforms

First, let's consider key points for leveraging the ever-evolving e-commerce (EC) site.

I was once responsible for an EC business primarily selling national brand (NB) daily necessities. As we were a latecomer, I was at a loss when I first took charge. This is because most people expect EC to be "cheap," "accumulate points," "sell everything," and "deliver quickly." Yes, it was a competitive environment where economies of scale ruled: EDLP (Everyday Low Price), the long tail, and same-day (next-day) delivery. Facing a mountain of challenges about how a small, late-entrant business could compete, I found myself grumbling.

But worrying wouldn't get us anywhere. While strengthening our product lineup, relocating warehouses, handling complaints, and solidifying our business foundation, we also experimented with creating simple bundle deals and adding subtle touches to product descriptions. We frequently noticed a distinct difference in customer response. We were starting to see traction with appeals beyond just price.

"E-commerce is undergoing a major shift away from being merely a place to sell goods."

I sensed a definite transformation underway—from a transactional platform to a marketing platform. I wanted to explore this potential from multiple angles. That's the mindset driving my work with many client companies today.

When you consciously consider this shift and re-examine e-commerce, several key points emerge.

1.Don't think of e-commerce in isolation
It's not about separating e-commerce as e-commerce and physical retail as physical retail. Both in terms of communication (awareness and understanding) and sales promotion, it's essential to clearly define their positioning within the overall strategy. Conversely, it's necessary to properly grasp the characteristics of e-commerce and consider how it combines with other media and sales channels.

2.For NB products in e-commerce, manufacturer-led promotion is preferable
For NB products, leaving promotion to retailers often results in a price-focused approach. Online, no matter how diligently you describe the product, customers may still choose stores selling the same item cheaper, leaving retailers little incentive to actively promote the product. Furthermore, only the manufacturer can effectively coordinate messaging across different touchpoints.

3.The cost structure barrier
E-commerce sites enable integrated customer approaches from awareness to promotion, as shoppers can view product details and purchase immediately. However, in many companies, awareness campaigns are managed by advertising teams, while sales promotions fall under sales teams' budgets. This often prevents e-commerce from fully leveraging its capabilities or leads to lengthy internal coordination before implementation.

4.Customer Touchpoints
Online behavior can be digitized and accumulated, and communication is two-way. E-commerce, including reviews, is a treasure trove of data related to purchasing goods and can play a significant role in achieving "visualization of attitude change."

It is crucial to grasp these points and consider how to position the e-commerce site within marketing activities. For example, during a previous seminar where we invited Rakuten representatives for a discussion, we used a diagram like this to touch on the media value inherent in e-commerce sites.

Can we flexibly overcome organizational silos to design and execute a comprehensive strategy? This involves viewing e-commerce sites as media platforms, leveraging their characteristics as places where highly motivated buyers gather and where purchasing occurs directly. This includes tailoring content based on media properties, running campaigns in appropriate venues, and considering spillover effects from online to offline. This is what will be required going forward.

Indeed, many companies have established dedicated e-commerce departments, with some even attempting to break down the aforementioned organizational barriers between advertising and sales promotion.

Leveraging E-Commerce Sites as a Strategic Move for the Future

Next, let's consider what leveraging e-commerce sites as marketing platforms means for the future.

When considering the future, we must not forget that the power balance in distribution is undeniably shifting toward the customer. Moving forward, various marketing activities will be organically combined and integrated from the customer's perspective to deliver unified customer service. This is what is known as marketing convergence.

On the other hand, there is an industry structure built up over many years. It is difficult to imagine instantly dismantling long-established divisions like manufacturing, distribution, and sales, or the separation between advertising and sales promotion, and achieving "organically integrated marketing activities" in one leap.

Considering this, the immense potential of e-commerce sites becomes apparent. They inherently possess hybrid functionality that allows selling products while promoting understanding as a medium. They can also visualize attitude changes by leveraging data. Rather than waiting for industry restructuring, starting experiments with clear objectives within the e-commerce domain is likely the first step toward preparing for the coming era of marketing convergence.

Finally, I want to emphasize that grasping customer attitude shifts is not the end goal. The crucial question is how swiftly and flexibly we can respond to customer demands. Achieving this requires building organizational structures and enhancing execution capabilities, while inter-company collaboration will undoubtedly intensify.

Every day, I aspire to implement new initiatives that effectively leverage the value of e-commerce sites for developing next-generation marketing.