MVP: How to approach the digital strategy of your e-commerce

From manufacturers and retailers to distributors, companies across a range of sectors are adopting a new digital strategy to maximise their profitability. Although many companies are new to this area, they are exploring this option due to demand. Previously, companies often considered the idea, but postponed any action due to lack of knowledge about costs and operations.

As in most technological projects, this process consists of two phases. First, there is the development of the project itself, which is divided into conceptualisation and implementation. Then, there is the implementation of the platform and its impact on the organisation. In this article, we present the main suggestions for the first phase.

The start of a project begins with the idea, i.e., conceptualisation. Although in times of crisis companies feel pressure to start selling, this does not eliminate the need to establish a long-term digital strategy. In other words, the company must first decide what approach it will take for the project, regardless of the external actors pushing it to make the change.
The following are some of the issues that need to be resolved at the outset:

• Are you looking for a long-term omnichannel model where e-commerce is integrated with the rest of the channels for aspects such as cross-selling, promotions or loyalty, among others?
• What is the value proposition to be presented to the end customer? Can this end customer start a process online and finalise it in the traditional channel, or vice versa?
• How does it affect the sales force in a B2B scenario?
• How does it affect my points of sale and the store staff in a B2C scenario?

The long-term strategy will guide short-term planning in two key areas: the choice of technological tools and solutions, as well as the organisational implications. However, before exploring options, it is important to understand where the technical effort is focused in a digitisation project. Simplistically, this effort is divided into four parts. These are:

1. Creation of the front-end.

In other words, websites that adapt to different devices that reflect the identity of the brand and the product, and accompany the customer's journey.

2. Digital catalogue. 

This involves defining products, variants, the data model, attributes and images, as well as managing stock and prices.

3. Processes specific to e-commerce. 

We're referring to aspects such as promotions to apply or suggestions based on customer activity, integrations with payment methods and the management of orders and their different statuses.

4. Connections are internal company systems. 

This linkage allows the flow of a range of information, such as updating product data, prices, stock, changes in customer data, orders or logistical tracking, among others.

If the company is committed to digitisation, despite seeking short-term objectives, the chosen solutions should not limit subsequent growth. In this approach, it is essential to carefully choose the tools that are best suited to the current and future technological context of the company. Each company is unique in this respect and varies according to its technological situation and its internal teams and capabilities.

That's why you have to invest time in making the right choice. Although it seems contradictory, dedicating at least two weeks to considering different options can save time and costs in the future. It is the way to avoid decisions that are not in the best interest of the company. To break the digital divide, we need to have the solutions that best suit our needs.

On the other hand, the strategy could focus solely on the short term.This means that the intention is to establish a new online sales channel, either for short-term goals or to control investment costs while learning in the process. It is assumed that there will be a second phase after testing the operation and gaining a better understanding of the implications for the company. In these cases, it is important to consider the opposite in technological terms.

No priority is given to solutions that are integrated with the existing systems, maintain multichannel processes or lay the groundwork for long-term evolution. Rather, low-cost and quick implementation solutions are sought. This will significantly reduce the effort required for the development of the e-commerce solution by approximately 50–75%, as integrations are eliminated and data models in the catalogue and web design templates are reused.

In this situation, we recommend two options:

1. Stand-alone tools. 
   Stand-alone tools are e-commerce solutions configured in advance for the company's sector or industry. These solutions are not integrated with corporate systems due to cost prioritisation, and they involve more manual work. However, they are a good fit for companies with a small online catalogue or with little price variability or constant stock. It is important to consider that the volume of orders could determine a future second phase with more integrated tools. In the initial phase, the number of orders will be low and can be processed via files by the logistics team.
    
2. Outsourcing. 
   This is a similar approach to the previous one. Here, platforms offered by integrators or digital agencies can be used, or third party platforms such as marketplaces can be used to gain insight into the channel. In general, the less ownership you have over the platform, the lower the cost, but it will also take longer for the online channel to return meaningful results. The less ownership you have over the e-commerce platform, the more difficult it is to implement effective marketing strategies that generate quick conversions in the channel.

Regardless of the digital strategy, it is good practice to use a minimum viable product (MVP). This refers to launching functionalities and processes that are needed to initiate the sale to the customer, without going beyond that. This is common in lean (minimum cost, maximum value) approaches to business management and fail-fast innovation (if we get it wrong, let it be fast and cheap).

Even in long-term projects, it is useful to launch the product early, usually three to six months from inception. Some companies hesitate to do this because they want the most complete solution for customers, but this often delays customers and employees having the opportunity to assess it. Solutions on stand-by for a long time rarely meet customer expectations due to the constant evolution of expectations in e-commerce platforms.

When it comes to project development, planning a year ahead can be problematic, as needs and technologies change. Implementing features that then become useless and having to add new unplanned integrations can be costly. Therefore, it is better to adopt an MVP strategy and use agile development methodologies.

When implementing an MVP strategy, it is essential to pursue an agile development methodology. Under this approach, the project begins with a list of features that must be included in the platform. The company then prioritises these features and divides the project into complete deliverables, which are parts of the platform developed and tested for user approval. These deliveries are made at fixed intervals, usually lasting two to four weeks, and are established at the outset.

Thus, before reaching the MVP milestone, there would have been three to six previous deliveries (called sprints) corresponding to the four development blocks mentioned: frontend, catalogue, processes and integrations. This methodology follows the same underlying principle as the MVP, as it allows the final solution to be fine-tuned while it is being tested — in this case internally at each sprint. At the same time, it facilitates understanding of the processes, the implications for internal teams and provides training in the early stages of the project.

It is relevant to note that technology influences the choice of technology partner and implementer. The decision on strategy and the final solution to be adopted determines whether an implementer with in-house, sectoral or technological expertise is chosen for integrations with corporate systems and future upgrades, or whether the outsourcing of operational, management and communication processes is more valued.

At SEIDOR, we have a team that excels at the different situations mentioned in this article and boasts experience in various sectors at the national and international levels. We have the capacity both to quickly implement structural solutions and to adopt more independent tools.

In addition, we offer operation services for your own tools, marketplaces and the entire digital strategy. This applies both for long-term operations and for more specific approaches. We work with your organisation until it develops its own skills and resources to perform operations in-house. Contact us now and let us advise you!