But a strong e-commerce market doesn’t mean that success is easy for business owners. Global inflation means consumers are thinking twice about spending; the supply chain is still on the mend; and fluctuating customer demands make it tough to predict shopping preferences. But e-commerce has always been a competitive market, and rapid expansion followed by inflation has only made it more cutthroat.
E-commerce businesses looking to grow in 2023 will need to make big decisions. Entrepreneurs need to be creative and focused and must plan strategically and prepare themselves for serious restructuring—not just minor adjustments—to make their businesses profitable and resilient in the coming year.
Here are five e-commerce management approaches that e-commerce business owners can use to boost profitability in 2023 and beyond.
1. Use Technology To Streamline Operations
E-commerce is tech-oriented by definition, but now is the time to reassess your tech stack. What tools does your e-commerce platform give you? Can it help you to scale, automate inventory management, accept more payment methods like crypto and digital wallets, track your supply chain from end to end and deliver top customer service? If the answer isn’t “yes,” it’s time to look for a better alternative.
Consider ways that tech can free up employees for complex activities that drive revenue. Tasks like invoicing, inventory management and logistics troubleshooting should be automated instead of occupying employee work hours or being outsourced to contractors.
Clever use of tech can make your e-commerce business more agile and innovative. Set up organization-wide communication systems like project management solutions that encourage collaboration and joint brainstorming. Ensure that your data analytics pushes insights, reports and forecasts to the entire company so that everyone is on the same page and there are no data silos.
2. Take Control of Your Cash Flow, Don’t Let It Control You
Access to sufficient capital at the right time can make or break a business, so it’s vital to ensure you keep on top of cash flow. Seek out software that can track cash flow and predict sensitive periods in advance so they don’t take you by surprise.
Alongside that, it’s crucial to make sure you can access extra funds when you need them. It’s not always appealing to turn to external funding sources, but doing so could be the difference between capturing a new market, upgrading to more efficient systems or placing sufficient orders and ultimately missing an opportunity that your competition is able to exploit.
Roei Yellin, chief revenue officer at an e-commerce planning and funding platform, says, “When searching for a source of working capital, finding an adaptable partner can go so far as to save a business in a pinch. […] Having the flexibility to make adjustments to reflect a business’ ever-changing reality is a huge advantage.”
3. Explore Expansion To International Markets
Even at times of global inflation, some regions show more potential for e-commerce growth than others. Therefore, it’s important to focus your sales efforts on the right demographic. Some experts are advising e-commerce businesses to expand into emerging markets like India, Asia-Pacific, Africa and Latin America, where skyrocketing access to smartphones and fintech is driving a surge in online shopping.
India boasts one of the top five fastest-growing e-commerce markets in the world; parts of Southeast Asia and Latin America could see e-commerce grow by 17% and 20% over the next five years, respectively; and according to Karen Nadasen, CEO of a payment service provider to online merchants, “Africa is expected to surpass half a billion e-commerce users by 2025.”
Nadasen observes that “there are now significant opportunities for international retailers to tap into emerging markets and diversify the markets in which they operate, maximizing profit and building sustainable income elsewhere.”
4. Rethink Your Talent Pipelines
E-commerce businesses need to focus on product choices, supply chains and logistics, but there’s a risk that they’ll end up ignoring talent recruitment and management. The job market is short on digital talent, so now is the time to strengthen your internal talent management. If you don’t have one already, consider hiring an HR manager to oversee the right hiring pipelines that prioritize the relevant skills.
Technology is changing so rapidly that skills gaps are a concern. Since it’s unrealistic to hire enough new talent to bridge these gaps, you’ll need to upskill your existing workforce on a steady basis to ensure that they keep up with technology. Investing in talent management is an investment in your business’s growth.
5. Deliver Bold Strategic Leadership
Strategic leadership is hard to quantify but vital for success in any industry. This is the year for bold strategic decisions based on clear customer vision and a deep understanding of your target market.
As Yuval Atsmon points out, disruptive growth requires a willingness to disrupt, and sometimes to disappoint people with a vested interest in maintaining the status quo. “In order to grow a new channel, existing channels must often be disrupted. For D2C, the fear of upsetting channel partners (such as retailers) can become a real obstacle to D2C e-commerce growth, as new products or promotions are not introduced or are ‘watered down’ to appease existing channels.”
Look for innovative ways to drive growth, such as adopting new models like subscriptions, embracing new types of partnerships like white-labeling tech platforms or investing in hyper-personalization for outstanding customer service.
2023 Can Be a Stellar Year for E-commerce
E-commerce business owners can thrive in 2023, no matter what the year throws at them, as long as they are willing to do what’s necessary, even if that requires deep changes to their business. By exhibiting strong leadership through spearheading innovation, streamlining business operations, doubling down on cash flow and talent management and being ready to expand into new territory, e-commerce entrepreneurs may just exceed all their goals in 2023.
