Three key priorities from and for e-commerce founders

Commerce Tech Dinner: We gathered founders, thought leaders and operators from top e-commerce startups and established players to discuss predictions for the e-commerce tech stack of the future.

Accelerated by the pandemic, e-commerce has been experiencing rapid growth over the last few years. More than 20% of global retail sales are already generated via online channels, reaching over five trillion U.S. dollars in transaction volume. Despite macroeconomic challenges currently slowing the extraordinary COVID-induced growth-rates, e-commerce is expected to grow steadily, reaching 25% e-com penetration by 2025. While the future of e-commerce looks promising and demand for superior online shopping experiences will continue breaking records, the space has become just as competitive.

Hence, players along the value chain are constantly facing the question of what the ideal e-commerce technology stack should look like in order to attract and retain consumers. What channels will be most efficient for customer acquisition? What payment methods will create the lowest friction in the checkout process? What will be the preferred way of receiving and returning goods? These few questions alone already indicate the multilayered complexity commerce players have to navigate through in order to iterate towards their winning formula.

Being big believers in the (e-)commerce space, we teamed up with our friends from

Activant Capital

to initiate an event format that unites the ecosystem and serves as a seeding ground to dispel some of these question marks. Therefore we brought ourCommerce Tech Dinner Seriesto life.

After kicking off the series and gathering leading experts in the field for the first time, here are our top three learnings from the discussion of our first event:

1. The importance of a unifying customer data layer

Ever wondered how Amazon achieved such a strong ramp-up of their revenues? A big part of the success lies in collecting and monetising their consumer data well. Over time the firm has managed to broaden their product portfolio beyond pure commerce, tapping into fields like video or music streaming or opening up to third party services, among many others. All of this is accessible via a single login. Thereby, they were able to significantly enrich their data play beyond the shopping behaviour of their consumers. Not only was that beneficial for their core commerce business (e.g., by improving their recommendation engine), they were also able to strap an advertising business on top, which has developed into a significant revenue driver today.

The Amazon example reveals one of the winning handles within the commerce space: providing the unique identifier. No matter where you sit in the value chain, establishing the unique identifier allows for traceability of all customer touch points. The power of owning the key that is tying all data points together implies the massive opportunity of building a unified customer data layer. Whether you are monetising the data insights or building other in-house services on top, the ability to forecast client needs and behaviour is the ideal seeding ground to expand the business model and to reach long-term defensibility.

This strategy may explain the rise of the super-app in different verticals — be it WeChat in commerce in Asia, Klarna in payments in Europe or Uber in mobility. In any case, making a value proposition a central repository for recurring customer behaviour data brings businesses in the pole position for future success.

2. Inspiration as the key for retention

Imagine brands have cracked the code on how to effectively generate conversions in times of rising customer acquisition costs and the fight for consumer attention. Now preventing high churn rates is by no means an easier task. While throwing discount codes at consumers has been a viable trigger for their next purchase in the past, retention nowadays has become much more complex — especially since retention of only the more valuable customers is desired.

Most of today’s retention efforts heavily rely on building meaningful relationships through personalisation and authenticity. Therefore, the commerce stack of the future has to allow for maximum flexibility in tailoring the businesses’ offerings to the changing needs of their clients over time. Examples include multi-channel communication to reach your clients where they are already communicating with their friends (e.g., via chat applications using tooling like Charles), exciting new online shopping experiences (e.g., liveshopping), highly personalised product selections (e.g., personal shopping service as championed by players like Outfittery) or differentiated and constantly-evolving front-ends (e.g., with front-end builders like Replo).

All of these measures contribute to a customer’s notion of feeling heard, valued and inspired. Not only by the tailored product but by a nurtured service offering. Hence, businesses should bear in mind that flexibility of the commercestack to new or personalised offerings will be a key lever for inspiration, in turn boosting well-needed retention!

3. Post-purchase should become a priority

While most e-commerce players heavily focus on driving consumers to conversion and repurchase, what happens after the purchase is just as central to success today. Consumers expect fast delivery. They are also unfortunately used to intransparency and lack of communication along the delivery journey, and chaos in the last mile. But consumers are becoming stricter in what they are willing to accept in a merchant relation, with 56% of frequent shoppers already diverging towards merchants with more efficient delivery and collection services.

Today, there is a range of innovative solutions out there that can help make this a truly delightful rather than annoying process. From seamless e-commerce fulfilment with Hive, delivery on the last mile through players like Dropp or Liefergrün, or fullstack discovery-and-delivery of premium brands with arive, fun post-purchase tracking with GoKarla or Parcellab, to returns management with solutions like 8returns — to name only the tip of the iceberg of providers from Europe — one can orchestrate an amazing experience after the check-out without ever touching a single parcel.

No matter to what extent merchants decide to build great post-purchase experiences in-house or by incorporating external solutions such as those above, optimising the later stage of the value chain is a key driver for consumer loyalty and satisfaction.

Overall, most guests in the room agreed that truly successful e-commerce companies will also need to be technology companies in the future in order to build defensible and long-lasting footprints in the space.

We will stay close and equally want to thank all the commerce enthusiasts for making the first volume a great start of an ongoing dialogue: particularly Carsten Thoma (Founder of SAP Hybris), Dirk Hoerig (Founder & CEO of commercetools), Artjem Weissbeck (Founder & CEO of charles) and Franz Purucker (Founder & MD at Hive Logistics) for opening up the night with a great panel discussion about the matter of the series; and all the 40 fantastic experts in the field such as Julia Bösch (Founder & CEO of Outfittery), Maximilian Reeker (Founder & CEO of Arive), Bianca Pestalozzi (General Manager Europe at ON Shoes), Elmar Broscheit (CFO at Gorillas), Malte Dous (Managing Director at DocMorris), Anton Kononov (Founder & CEO of Formel Skin), and many more, for turning the discussion into an evening full of valuable insights.

With ongoing excitement about the space, we will continue to bring founders, thought leaders and operators from the commerce ecosystem to one table to discuss predictions for the future e-commerce technology stack and can not wait for another volume of our Commerce Tech Dinner Series. Onto many more valuable commerce predictions!

You feel like also sharing your take on the future of commerce? Drop us a message to: paula@lafamiglia.vc and we will make sure we consider you for one of our next Commerce Tech Dinners. We are already looking forward to seeing you around!