One way the business environment is being reshaped is by a raft of new entrants using technology-driven ways of producing goods and delivering services. Among these challenger businesses is discount online shopping portal, MyDeal.
MyDeal provides a turnkey go-to-market solution for online retailers who list their products and services on the portal, acting as the conduit between them and their customers.
In its early days, MyDeal was involved in the logistics side of its e-retailers' operations. MyDeal's CFO, Kevin Nanda, explains that this helped the tech company grow rapidly. “When we started, the business was 50 per cent warehousing and 50 per cent the online platform," he says.
This "clicks and bricks" approach is becoming popular, as an increasing number of online businesses establish a physical presence. For instance, online retailer Amazon has been opening a series of physical stores.
MyDeal is bucking this trend. It has now gone fully digital, having outsourced all of its warehousing to a third-party logistics specialist. "Now, we're focused on the brand and building the online marketplace," says Nanda.
Going completely digital has not changed the customer interface. MyDeal's customers still pay upfront when they buy through the site, which gives the business strong cash flow. What has changed is the cost base.
“Instead of putting our resources towards managing inventory and dispatching orders, now it's more about having a seamless process for our suppliers and consumers on the front end," Nanda explains.
The change in business model means MyDeal is now more focused on incentivising its suppliers to dispatch goods as soon as possible, to ensure customer satisfaction.
Nanda and his team are currently updating the site's coupon and credit note technology. This will allow MyDeal to challenge established coupon businesses like Groupon.
“We're putting considerable analytical logic into this, trying to gain some insight into how quickly customers will redeem coupons. This will help us tailor marketing campaigns."
The data the site produces about customer preferences is invaluable in helping Nanda develop the business's long-term strategy.
“Most of our technology is developed in-house, and by using digital tools we are able to analyse our data more deeply. We have a clear picture of what drives costs and revenue, as well as the winners in each category in terms of costs, revenues and sales conversions," he explains.
This requires a disciplined approach to record-keeping, and sophisticated ways of using technology to connect suppliers and other partners to its platform.
Nanda's advice for other CFOs is always to keep learning and see challenges as opportunities. "Always adapt with technology," says Nanda. "In the future, we're going to be able to use digital tools to analyse anything."
ShopFully is another consumer-focused online business; it aggregates retailers' content and serves it to consumers buying online, based on their location. Consumers are only shown retailers' content from shops within a certain distance from the shopper. It's an efficient model for marketers, who only pay when a consumer has shown interest in their content, in the knowledge they are in close proximity to the shop.
ShopFully also provides detailed insights into a retailer's stores, benchmarking their performance against industry averages. "This allows us to work with our retail partners to improve their performance, as we find out more about how consumers interact with their brand," says Dean Vocisano, ShopFully's Australian Country Manager.
According to Vocisano, successful business models, especially in a digital world, ensure that the brand and/or its retail stores are easily discoverable by consumers.
“The longer they have to spend searching for you, the quicker they are to lose interest and move on to what they know and trust," he warns. “We need to remember most consumers research their shopping trip online, with almost all sales still occurring in physical stores. If you are not seen in the shopping journey, you are typically not considered in the purchase."
Vocisano says that what your business offers in the digital world needs to be replicated in the physical world, served to the right consumers, at the right time. “Digital technologies are absolutely transforming the way we speak to consumers," he explains. "But the way we approach our content – as in physical catalogues or offers being pushed to households – to drive consumers to store, does not need to change, it just needs to be adapted for the new age of digital trends."
He believes the best approach for CFOs is to ensure content is replicated through all channels. “Our advice is to ensure that both the digital and physical consumer journeys are trackable, as they both play a role in the overall ecosystem," says Vocisano. “We allow our retailers to link our users directly to eCommerce, but with the majority of sales still happening in physical stores, we ensure we have metrics linked back to how digital content plays a role in driving incremental lifts in footfall," he adds.
Developing and re-developing business models, and testing and learning what works best for their brands, will be key for businesses looking to take advantage of the new digital age.
- Use data analytics to drive decision-making and strategy.
- Make it as easy as possible for consumers to find your business.
- Ensure your digital and physical offerings are identical.