Where E-comm fits in an organization is a common question for many traditional retailers. Many have struggled in figuring out both the “WHO & WHERE” the e-commerce team should report to, as well as “HOW” the online team should be structured. Although the answers to these questions may vary depending on each retailer’s e-commerce strategy, we are beginning to see a common theme arise.

WHO & WHERE

The answer to this question lies in understanding where the E-commerce business is in its evolution within the greater organization. As an E-commerce business evolves within an omni-channel retailing organization it can often appear to be “couch-surfing” as it’s home moves between Marketing, IT, the CEO, Sales or Merchandising.

E-commerce’s “Home” can be more like “Couch Surfing” …

e-commerce team organization

E-commerce often develops as a “love child” of the marketing and IT departments.  However, the responsibility often shifts to the merchandising department or sales and operations, as the e-commerce function evolves and grows.

In mature Omni-Channel organizations, we often see E-commerce reporting directly to the CEO as its impact is broader managed across the organization. Alternatively, e-commerce team can be reporting to the Merchandising leaders who have the control over the product.  Trends are suggesting that online marketing teams might eventually be transplanted across all functions and no longer exist as a separate entity at all.

Where do you think this high-potential division should belong?

During a recent Summit we held, the group shared thoughts on the pros and cons of each potential area for E-comm to call home:

Pro’s Con’s
Marketing
  • Know how to create traffic
  • Have sufficient budget
  • Subjective creative execution
  • Brand vs. conversion focused
IT
  • Have web developer resources
  • Know how to ensure website speed & stability
  • Not very agile
  • Usually very risk averse
Operations/Sales
  • Omni-channel skills
  • Customer centric
  • Conversion driven
  • Treat web as just “another store”
  • Lack of budget
  • Product allocation issues
Merchandising
  • Product allocation
  • Enablement of “endless aisle”
  • Promotional activity
  • Rely on forecasting more than immediate consumer demand
  • Margin focused

 

CEO
  • Budget
  • Resource support across the organization
  • Wider view of web impact across the organization
  • Expectations may be unrealistic
  • Focus may quickly change to another issue
  • Gap in understanding requires efforts to close

 

HOW

So, once it’s been decided where the E-commerce team should reside, the next question is how is the team structured? Perhaps it’s as easy as looking at today’s brightest on-line organizations and imitate what they’re doing. Or not…

How are the brightest structuring their teams?

ecommerce structure

When it comes to how most E-commerce departments are structured we typically see one of the following three approaches:

  • FILL IN THE GAPS

The first method is to build a team based on filling in the gaps around its leader’s skills. The main sets of capabilities that an e-commerce team should have are eContent, eMarketing, eMerchandising, and eOperations.  In this method, your team should collectively score high as a unit by adding the knowledge and experience that the team leader may lack. This isn’t always a perfect solution: because the team leader doesn’t always have the same experience his team has, it can lead to many information gaps.  

  • LEFT BRAIN vs RIGHT BRAIN

The next method is based on creating two e-commerce teams: “left-brained” and “right-brained”. The idea here is to have each team work on what they do best.  There would be two different directors or managers in charge of each area. The “left-brained” team would take care of eContent and eMarketing, while the “right-brained” team would execute eMerchandising and eOperations. The main issue with this method is that it may lack organizational unity, and the goals may not be aligned among the two teams.

  • FUNCTIONAL SPECIALIZATION

The third method is to pull resources from all general functions required for e-commerce, and have them all report to a manager responsible for the e-commerce function’s results.  This method is the most preferred, as the team is unified under the management of one leader, and is working towards achieving common goals.  Team members from these various functions are able to work with each other on different projects and are encouraged to collaborate to yield the best e-commerce results.

At the end of the day, these decisions need to be made based on what will help the organization achieve its own unique business goals & objectives. It’s important to note, yet often overlooked, that these sorts of fundamental organizational changes can only happen under the vision of the right leader(s), as the decision to structure, restructure, or for those just getting their feet wet in omni-channel retailing, get started, has to come from the top (or center), in any large retail business in order for changes to be successful.

Regardless, it’s a topic that many omni-channel retailers will be faced with as their ecommerce teams continue to grow, morph and evolve. Our goal in this article wasn’t to try to provide all the answers to these complex questions, rather it was to provide some of the valuable insights we’ve learned over decades of dealing with other retailers across a wide variety of sectors.

Hopefully this helps stir the conversation within your organization, and helps guide you towards the who/where & how solution that best fits your business goals and objectives.

We’re here to help with these sorts of complicated retail issues, if you’d like to continue the conversation with one of our omni-channel retail specialists and see how SCI can help, give us a call, or book your consultation online now.