Driving Long-Term Growth in Ecommerce

Ecommerce is no longer a niche market focused on urban areas. Online shopping has been gaining in popularity in the last few years. By 2027, the online segment will make up close to a quarter of total global retail sales according to a recent research by Statista. So, having an omnichannel strategy is no longer a “nice to have”, it becomes, and will incrementally become, a critical tool for engaging with end consumers in a consistent and relevant way. 

While customer acquisition is important, companies should focus on more than just growing the number of people interacting with their omnichannel. Short-term gains from flashbang marketing campaigns may look good when targets are being analyzed. However, such arbitrary growth may not lead to long-term benefits and customer retention for the companies. 

“At VTEX, we have been working towards helping our clients set up their ecommerce operations and achieve sustainable growth. Apart from sales and marketing teams, VTEX invests heavily in a CX team that works with the partner brand to help get benefits from the ecosystem we have built and continue to invest in. Each partner and brand that signs up with us has a dedicated CX person who will help them to achieve their targets,” Prakash Gurumoorthy, general manager- EMEA & APAC at VTEX.

India is a huge market for many international companies, especially in the ecommerce segment. Many traditional conglomerates also turn to online options to tap into the Indian market. Omnichannel is being seen as the pathway to reach new customers. 

According to IBEF (India Brand Equity Foundation), ecommerce is expected to keep growing at a fast pace in the next few years. The Indian ecommerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second-largest ecommerce market in the world by 2034. India’s ecommerce sector is expected to reach US$ 111.40 billion by 2025 from US$ 46.20 billion in 2020. Companies should be prepared for all eventualities, and firms like VTEX can help brands unveil their true potential sustainably. 

Prakash Gurumoorthy adds, “At VTEX, it’s not about signing on every brand that wants to partner with us.. We take cognizance of the brand’s targets and how they want to achieve them. We look at their targets for gross merchandise value in the next few years and if we have the ecosystem to help them achieve their goals. The CX team is committed to facilitating responsible and sustainable growth for brands, knowing that VTEX's own brand flourishes as a result.”

Drawing insights from the global survey "Three Investments to Drive Ecommerce Growth," VTEX has identified three essential investments crucial for ensuring retail profitability.  Firstly, we should help our customers to focus on customer loyalty. Having loyal customers who return frequently is a boon to any business, especially in the realm of ecommerce.Maximizing the value derived from existing customers is paramount, considering that nearly two-thirds of a company's revenue stems from these loyal patrons. It is no wonder why loyalty programs have gained widespread popularity among companies, as they play a pivotal role in nurturing positive relationships with customers and encouraging repeat purchases. 

Secondly, companies need to invest in supply chain and inventory management. At VTEX, we understand brands are still in the early earnings or their omnichannel journey.. Therefore, having the proper partner to help them through this new phase remains crucial for their success. In this stage, prioritizing investments in inventory management, order management, and other supply chain features is paramount. 

VTEX has its own native order management solution which provides visibility to partner brands regarding their inventory levels. We have also invested in a management solution, which is a real-time view of the steps from order fulfillment to order fulfillment, including shipping policy and who picks up the product to deliver to the customer. These investments help companies figure out the bottlenecks in their supply chain and work on them to ensure a smooth flow of movement for the product from order to delivery. 

Thirdly, it is important to engage with customers. Brands must explore inventive strategies to foster meaningful relationships and instill a sense of loyalty in their customer base. This can be achieved by humanizing the brand, and offering compelling content, such as behind-the-scenes narratives and employee experiences.

Another innovative way to engage with customers is to draw up a map of the customer’s journey. This visual representation will help both parties pinpoint where the bottlenecks are and help streamline the whole process. It improves customer experience and brings them back because they see a responsive company working to remove the pain points in the process they underwent to place the order. 

Focusing on these three aspects can help drive long-term growth at ecommerce companies, regardless of the product category being handled. VTEX has created sales channels that take all these into account. Whether it’s B2B, B2C, direct-to-consumer, or even as a marketplace, these factors remain key to driving repeat businesses and helping sustain growth in ecommerce companies. 

“We measure ourselves based on how much our customers have been able to grow on the online platform. Online revenue is essentially a combination of three factors – traffic, conversion rate, and average order value. In 2023, VTEX experienced a remarkable 30% increase in GMV in US dollars YoY. Additionally, our existing customers achieved an impressive 19% growth in same-store sales. VTEX growth and our customers' growth far exceeded the global ecommerce growth rate of 10%, according to Statista. This underscores the significance of strong partnerships in developing a truly omnichannel strategy and the significant impact it can have on your brand. ” Prakash concluded. 

No VCCircle/TechCircle journalist was involved in the production of this content.