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Eileen Shy: The Great E-commerce Illusion in Consumer Products

Despite rapid growth in online sales, many large consumer product companies are losing market share. Here's how they can turn this trend around.

Video

Eileen Shy: The Great E-commerce Illusion in Consumer Products
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Large brands often react slowly to the demands of online commerce. Eileen Shy, a partner with Bain’s Consumer Products practice, outlines steps that leading companies are taking to gain control of their digital operations and turn the illusion of online success into reality.

Read the Bain Brief: The Great E-commerce Illusion in Consumer Products

Read the transcript below.

EILEEN SHY: Many of the largest consumer products companies think that they're doing very well online. Their online growth is higher than their offline sales growth, and they're feeling pretty good. But our recent research has shown that online sales success is an illusion for many companies. Seven out of the largest 10 consumer products companies globally are delivering online sales growth that is below that of their categories, despite the fact that they're growing 30% or more online. So the perceived success, it's just not a reality for these companies.

The leaders are starting to do things differently. They're starting, most importantly, to realize they can't be lulled by the strong performance that they are seeing online. They need to wake up and start to do things differently.

They are starting to realize that they no longer want to outsource their marketing or their e-commerce activity. Increasingly, they're bringing more and more of it in-house. In an online world, your digital execution is your new front line.

And the last thing you want to do is outsource your front line to a third party agency. The teams that these companies set up are increasingly shopper-focused. And so while there is still a brand-led led and a brand principle behind much of the organizational structure, that shopper-led focus is increasingly important to the success of an online sales team.

These teams also need both the ability and the responsibility to take action and to be able to move quickly. The pace of change and the pace of decision making in an online world is literally a day-to-day set of decisions. And if the team doesn't have the ability to take action and to move quickly, they're going to be left behind.

Finally, the best companies are thinking about the holistic impact of their actions, both online and offline. To pick an example, pricing. Pricing activity offline gets matched online. And there are plenty of consumers who are price shopping between online and offline channels. The best companies are thinking about the comparison or thinking about the totality of their actions, both offline and online. The companies that are doing all of these things right are tuning the illusion of online success into a reality and generating exciting returns.

Read the Bain Brief

The Great E-commerce Illusion in Consumer Products

Here’s what to do when your brand scores massive growth online but loses market share.

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