E-commerce has become a vital channel for companies across industries, yet its integration into traditional sales and distribution frameworks remains complex. In their article, Valeria Belvedere, Elisa Martina Martinelli, and Annalisa Tunisini examine how companies can effectively integrate e-commerce within omnichannel strategies, creating a cohesive customer experience across online and offline platforms.

The study provides insights based on case analyses of prominent companies such as Luxottica, Henkel, Ferragamo, and IKEA, identifying key factors influencing e-commerce success in an omnichannel context. By focusing on two dimensions—distribution channel (direct or indirect) and product value density (high or low)—the authors present a framework categorizing companies into four quadrants (strategies), each with unique benefits and challenges for e-commerce integration.

We spoke with the author to uncover practical insights for managers looking to integrate these innovations effectively into their operations.

Why are the leading distribution channel and product value density critical for companies that want to achieve results from their e-commerce efforts?

Suppose a company sells only through indirect channels. In that case, e-commerce represents an enormous opportunity since it enables direct contact with the final consumers and, therefore, the acquisition of a remarkable amount of data concerning their purchasing behavior. Companies that use direct channels to sell their products already have such a type of contact; nevertheless, e-commerce can help them improve the profiling of their customers.

Even though e-commerce can benefit both typologies of companies, they can incur severe problems in the physical distribution process if the products sold online have a low-value density. This indicator is calculated by dividing the product’s unit value by its volume or weight, the latter being the driver of the transportation cost. If this indicator is low, the delivery process, a critical aspect of e-commerce, becomes even more problematic, making the omnichannel strategy risky.

What are the benefits and challenges of combining these two factors?

Combining these two factors helps companies understand, on the one hand, the extent of the advantages achievable through e-commerce and, on the other, the difficulties and higher costs due to the physical distribution process of items sold online. Analyzing these aspects allows companies to identify the critical areas in which to intervene to avoid unsatisfactory results from these strategies.

How can companies choose their approach to e-commerce? What internal characteristics influence this decision?

Companies adopt different e-commerce strategies based on distribution channels and product value density:

• The first strategy involves companies selling high-value density products through indirect channels. They skillfully use e-commerce data to enhance demand insights, improving forecasting and marketing strategies.
• The second strategy features companies with low-value density products in indirect channels. It is essential to assess if e-commerce is worthwhile and how to design the delivery process to minimize the potential negative impacts of high last-mile logistics costs.
• The third strategy applies to companies selling high-value density products through direct channels. Low last-mile logistics costs make e-commerce viable, though its impact on forecasting is limited. E-commerce can help reach areas not served by traditional offline channels.
• The fourth strategy involves companies selling low-value density products via direct channels. E-commerce enhances customer engagement but can be burdened by high transportation costs.

Copertina: Foto di Moondance da Pixabay