2nd Spectrum & Ardent eCommerce Leadership Dinner, January 2015
Following the positive feedback received after our inaugural eCommerce Leadership Dinner held in October last year, Thursday 22 January 2015 marked our second dinner debate. Held at The Lansdowne Club in London and co-hosted as before with Ardent, the eCommerce sector focussed corporate finance house, 15 ‘C’-level executives and institutional investors from across the European eCommerce ecosystem joined hosts Gareth Williams (Ardent) and Daniel Osmer (Spectrum) for a stimulating dinner discussion on the key themes of the day.
As previously, the debate was fuelled by a variety of different perspectives and experiences from across the eCommerce landscape. This time however, there was perhaps less agreement on the current dynamics within the sector, with some topics in particular hotly debated.
Gareth Williams opened the roundtable discussion by highlighting fascinating MIT research recently reported in The Economist, suggesting that some online retailers are demonstrably charging higher prices online for identical products than can be found in-store.
The research suggests that internet retailers more efficiently match supply and demand by offering a greater product selection to a much wider audience than can be achieved by the physical retailer.
These findings provoked an engaging debate for the reminder of the evening, the key discussion themes being:
- Value ‘v’ Convenience: is the online retailer proposition to the consumer primarily based on value (i.e. the cheapest price) or convenience (i.e. the quick purchase and delivery of the exact product required)?
- Retailer category: whilst the value ‘v’ convenience debate has clear and critical implications for strategy and pricing, there was recognition across the table that consumer behaviour is not consistent, and that different retail categories will experience different buying behaviour. One high-end internet retailer reported that its recent strategy of marking some goods as ‘price on application’ had resulted in increased sale prices of 20-30%.
- Google ‘v’ Facebook: the cost and effectiveness of consumer acquisition was again debated. The perceived high cost associated with Google has led online retailers to explore other channels, notably Facebook. However, experiences with Facebook varied considerably: one retailer (a youth-oriented fashion brand) reported half its sales driven by Facebook, with another (a European luxury goods retailer) reporting that some of its US customers in particular were leaving Facebook.
- The role of content: was fiercely debated. One view was that it was a key enabler of effective SEO; opposed by those who felt that is was rarely, if ever read (if you are reading this, then please let us know!). Despite the latter view, it was agreed that content should not distract the consumer from purchasing, and that it had an important role to play in market positioning (i.e. consumers like content to be there – it is reassuring and underpins brand credibility – even if they do not actually read it).
- Beyond ‘pure-play’ online retail: previously, the prevalence of ‘pure-play’ internet retailers establishing a physical presence was reported and largely supported as a valid strategy. This dynamic was again reported, as was the ‘hybrid’ shopping experience: combining the best of online shopping with some elements of the in-store experience. The role of the physical magazine was also promoted in some quarters, with the newsstand success of PORTER magazine, Net-a-Porter’s paper publication, debated.
- Skills: the challenge of successfully and cost-effectively recruiting – and retaining – staff, in particular experienced software developers was discussed, with innovative near shore software development solutions proposed.
- Niche players: adopting a highly specialised market focus, ideally to include unique product offerings and high levels of customer service, was considered a very valid strategy – as it creates high-value customer relationships, and a long tail.
Feedback from the evening included:
- “A very interesting, enjoyable dinner and roundtable discussion”
- “It was great to see the passion and drive that many people have in growing their own opportunities across eCommerce”
- “The conversation around the table really warmed up, with a range of perspectives and experiences on some important topics”
- “It was really great to meet and discuss with an extremely interesting group of people, and as always, fascinating to hear such differing opinions!”
- “The best event I have been to”
The Spectrum & Ardent eCommerce Leadership Dinners are a quarterly invitation-only forum for peer-level strategic discussion and relationship building. If you would be interested in attending our next London event, please contact: firstname.lastname@example.org