Defining E-Commerce Is A Thorny Issue

Written by Evan Schuman
August 10th, 2011

If a rose, by any other name, was purchased online but picked up in-store, would it still be E-Commerce? What if it was examined in-store but then purchased online—the showroom approach? That may sound like sophistry, but when retailers announce E-Commerce figures, are the numbers comparable?

Consider the latest E-Commerce stats released Monday (Aug. 8) by E-Commerce tracking firm ComScore. It reported some $37.5 billion worth of E-Commerce spending in Q2 2011, a 14 percent increase from a year ago.

Even setting aside for the moment what the best definition for E-Commerce should be today, does merely thinking of rigid E-Commerce figures separately from in-store, isolated from mobile and apart from call center undermine retail merged-channel thinking?

Few retail executives today disagree that the ultimate goal of merchants is to complete the transition from multi-channel to cross-channel and, ultimately, to merged-channel. But given that few compensation plans support that goal—by still incenting in-store managers solely or overwhelmingly only for in-store sales—does this rigid phrasing undermine strategic efforts?

Even pure M-Commerce efforts are challenging to define. Anything purchased on Wal-Mart’s mobile site is certainly M-Commerce, but what if a customer is accessing Wal-Mart’s full Web site through a BlackBerry, iPhone or Android? And what if it’s happening in-store and the search in question was activated by a barcode scan? The bard himself could barely have written the bonus plan that adequately covers that situation.

Is there indeed a fair and reasonable way to divide those dollars? What if geolocation was tracked and the store received full credit for any mobile transactions that happened within the confines of that store? There’s a huge problem with that scenario, of course. The store manager should get 100 percent for an item purchased at POS, but would have to split that revenue for anything purchased through mobile or E-Commerce. What’s the incentive there?

If the chain wants the store manager to get as much money if the customer purchases from the chain—regardless of how that purchase happens—splitting commissions becomes counter-productive. Yes, defining and measuring these channels in a static way is certainly easier—and it might be the only practical way to proceed today—but it is going to fuel online-offline-mobile turf battles for years to come.


One Comment | Read Defining E-Commerce Is A Thorny Issue

  1. Sudha Jamthe Says:

    Excellent questions on the turf war of compensation of offline vs mobile.

    This is now new with mobile. This started when brick and morter businesses started moving to the web in end 90s. It is overall good for the business if the customer makes the purchase with a brand – online or offline instead of buying from competition. So its good for both offline and online managers.

    But the real compensation turf war can be resolved when you look at the overall increase in volume of total sales which means same or increased compensation for both offline and online managers. ECommerce business needs systems that track “offline driven by online” sales to manage the levers to keep increasing the overall sales – imho.


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