Regular readers of this column have probably noticed that my posts of late have been absent of any news or discussion about the current economic climate. Don't worry, I'm not in denial. No question it's difficult out there. E-commerce, while still growing has slowed significantly and probably will continue to do so. The news every day cites retail sales plummeting and consumer confidence doing the same.
As I have thought about what, if anything to say about the current state, I've been drawn back into my own history of prior downturns and burst bubbles. While the seriousness of this downturn will likely surpass the others, I suspect that some of the things I learned along the way still apply.
I confess that some of this learning has come from making my own fair share of mistakes when trying to deal with cut budgets, nervous e-commerce teams, demanding consumers and even more demanding executives and shareholders. That said, I recall some great work and groundbreaking best practices coming from e-commerce teams in their darkest days. The key is focus and prioritization - and being sure that you keep the right people around.
1) Take advantage of the fact that momentum is no longer driving your business: For those of us in e-commerce, let's face it. No matter how hard you've worked or how great your site is, a healthy portion of the good business you've experienced over the last few years has been from the pure momentum of the industry. With that no longer a factor, you have an opportunity to think about the things you will need to do to strategically drive growth vs. draft off of the wind at your back. Those are two different ways of working that need to be treated as such. And, no, just adding another free shipping promotion is not a strategic solution. When this recession/downturn/whatever is over, your business will be in a different place than it was before the downturn. Your customers will have adopted new behaviors and will see the world differently. Try to give yourself the time for strategic thought - you are going to need it. Get an outsider's point of view or someone to help you think through the important issues. Strategy may have been a luxury before, but it's essential now.
2) If you have to cut, be decisive about it: No one likes to cut initiatives or people, but the biggest mistake is cutting "across the board" without a real strategy. Too often, every department or functional area is asked to sacrifice one person, but the workload remains the same, causing burnout and lousy execution. It probably makes more sense to eliminate specific work and then reorganize based on the new work vs. trying to all of the same work with less people. It's harder and takes more strategic thought to do it this way, but you'll have more focus and better execution. In fact, you may be able to eliminate organizational "layers" and fast track on innovation.
3) Cut idea generators vs. executors: This one is tough, and probably controversial, but I have never worked in or for an e-commerce organization that has been lacking for ideas. Typically what's lacking is a sense of priority on those ideas and enough skilled e-commerce designers, copywriters and engineers to execute on the ideas. Yet, I find it interesting that in downturns, the people really making the website hum can be the ones to go, while the idea generators often stay behind, frustrated that they can't get things done. Be careful to stay balanced across the idea thru execution chain. And don't worry, the ideas won't dry up: the executors usually have a bunch of good ideas too, no surprise.
4) Prioritization is more important than ever: If you are being asked to operate with less money and less people, that means that unless you had a bunch of unproductive people or marketing programs (not likely) that you are not going to be able to get as much done. In an older post, I referenced a favorite Meg Whitman quote of mine about strategy being about what you're NOT going to do. Take it to heart and be decisive. It will help focus the team and you'll execute better.
5) Whatever you do, don't give up a good web analyst: In the data rich environment of e-commerce, an analytics specialist is the window to your customer's mind. They can unlock the hidden opportunities and zero in on your site's trouble spots. They can help you see where customers are screaming for more or voting "no". In a previous post, I told the story about how a slashed marketing budget forced site usability analysis to the forefront and saved the day by getting more customers to convert on less site traffic. Bottom line - you can't live without a good analyst when times are tough. With prioritization more important that ever (see point #4 above), your analyst is the key to doing it intelligently.