Digital commerce leaders are facing a different “exam question” as a result of higher costs and a tougher economic environment, the boss of Ingenuity has said.
Vivek Ganotra told City A.M. that marketing costs, conversion costs and inflationary aspects on operation have pushed up the cost of sales to e-commerce brands and forced them to confront the fact that the “core proposition has become harder.
“Things are not straightforward. And the common theme I’m hearing from brands is that they’ve over-estimated their ability to do it themselves,” Ganotra said from the sidelines of Ingenuity’s Future of Commerce conference in Manchester.
Digital retail rocketed during the pandemic but life has become more challenging post-Covid-19 as competition – both in physical retail and for disposable income – has returned.
However this year alone new figures suggest as much as $5.8 trillion will be spent online this year.
Ganotra believes the market is now one where the “winners and losers” will be dictated by their investment in fast-moving technology and their ability to leverage new marketing strategies – including social media influencers.
According to Ingenuity’s Future of Commerce report, launched alongside the conference, suggests some brands are now generating 25 per cent of their revenue through the conversion of influencer marketing.
“On tech, you need to dial up your continuous investment in things like artificial intelligence, but with discipline. Don’t spend six months spending money on consultants developing an AI strategy – instead retailers need to develop really hard use cases and find some really good engineering talent to test the boundaries and find out what works for you,” he said.
THG, which owns City A.M., is based in Manchester where the conference is being held. Ingenuity is the firm’s complete commerce division.