8/17/2017

“eCommerce is a marathon, not a sprint.”

Chatbots, shopping by voice assistant, drone deliveries – the way that we buy and consume goods is going through massive changes. Sigmar Werz, Corporate Director Global eCommerce, talks about how Beiersdorf is dealing with the continuous new demands.

SW – I frequently meet entrepreneurs at conferences who say, “Only a physical shop can offer consumers a real shopping experience.” It wasn’t long ago that I would have blindly agreed with this statement. But if I learned one thing, it is that consumer desires and expectations have changed enormously, and this process is far from over.

NIVEA Website

As the person responsible for Global eCommerce Business at Beiersdorf that’s exactly what I am occupied with. What does the “perfect” shopping experience for eshoppers look like today and in the future? Skin analyses are already being conducted through an app. Chatbots answer consumer questions autonomously and in real time, and thanks to the rapid commercialization of new technology, companies can offer their clients realistic 360-degree shopping tours through their stores – virtual reality comfortably from your own couch. When we look at how much digital technologies are already integrated in our everyday lives and how much this has changed the way we consume and buy things in recent years, one thing is clear: expectations of the shopping experience are changing too. That’s why at Beiersdorf we set a strategic course years ago – including the re-launch of the technological platform behind the NIVEA website in 2015. We’re really proud of it because the platform enabled the combination of a high-performance content management system with a market-leading eCommerce infrastructure and our consumer loyalty program. Here we offer consumers a real added value – information, products and advice with a lot of personalization. In turn we receive unfiltered insights about their needs and purchasing behavior allowing us to get better and better at fulfilling their wishes. As a result our sales in the NIVEA eShop have increased significantly in recent years.

NIVEA eCommerce Shopper

Just now it’s really getting going

But resting on this success would be a fatal mistake! We have to continuously keep up with the latest and evaluate future trends. That’s why I see eCommerce as a marathon and not a sprint even if the market develops faster than expected. In 2007 the online portion of retail sales in Germany was at 2.4 percent, in 2011 it reached 5.6 percent and we are expecting 9.9 percent for 2017. Naturally, online business is growing at different speeds in various countries. In China and Korea it’s already at 20 percent, while in other countries it’s just getting started. But the rapid development of online business is a global phenomenon in which the FMCG industry is a latecomer. While industries like clothing, books and entertainment electronics are nearing saturation in Germany according to the current HDE Online-Monitor in online sales, in cosmetics, growth is just now really getting going. At Beiersdorf this is very clear to us: our ecommerce net sales grew by more than 70 percent from 2015 to 2016. So there’s enormous potential for us that we will have to exploit in the coming years.

Beiersdorf digital trainings and events

Experiment, fail, learn

In order to do this we have to experiment, learn from our mistakes and keep developing. For this reason we offer our employees various trainings, exchange examples of best practices and in cross-functional teams develop new strategies that are adapted to the market and shoppers’ needs. At the beginning of June, for example, we organized the first “eCommerce Hackathon” at Beiersdorf. For two days we engaged with the question of what role ecommerce should play for NIVEA in the future. We discussed opportunities and risks, listened to inspirational talks, developed future scenarios and redefined ecommerce for ourselves with all its facets. In this context, for example, “Contextual Commerce” was an important subject. That means making what consumers want available outside of shops and marketplaces as well. Recently, for example, we started testing the Amazon Dash button, with which consumers can reorder goods directly from their personal environment with the push of a button. Because being able to shop as easily as possible and at any time is something consumers expect more and more. For us, our Supply Chain and our partners this is naturally a great challenge – especially with respect to technology.

eCommerce Reviews and Ratings

The evolution of consumer expectations

Most of all, leading online retailers like Amazon and Alibaba are setting the pace here. Since May, for example, Amazon Fresh has also been available in Germany. In addition to an above average assortment of goods, Amazon offers food delivery within a few hours on the same day. While traditional food retailers have had difficulties with structure, logistics and profitability of their ecommerce business for years, industry giants are able to set new standards thus increasing consumers’ expectations towards other providers. The relevance of recommendations in the purchasing process was also significantly influenced by Amazon and similar companies. Studies show that consumers trust the ratings and reviews and they have a significant influence on their purchasing decisions. Especially new labels are often so successful because they integrate their eshops in clever online marketing concepts that specifically target the generation of consumer reviews. This is how they use the recommendation effect and at the same time receive direct feedback from consumers.

In this respect ecommerce is great not just for buying products online – it’s also a powerful instrument in terms of consumer closeness and brand management. And this is where the biggest strengths of Beiersdorf have always been. Together with our power to innovate this will help us to continue making consumers happy with our products and services every day.

About the guest author Sigmar B. Werz

Sigmar is responsible for the online business of all Beiersdorf brands for the mass market, including NIVEA. His goal is to make consumers happy and advance Beiersdorf’s ecommerce business. He sees a lot of potential in this, but he also confronts the challenges. In general it’s important to him to deal with digitalization responsibly. Personally, he shops mostly online – but for food he’s still loyal to his favorite weekly market.