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    February 13, 2024

    Samir Bhavnani of CommerceIQ: Maximize Profitability With More Holistic KPIs for Ecommerce Managers

    Written by: Nicole D'Angelo
    "This whole concept of ‘do your job and stay in your lane’ doesn't exist anymore … all of these walls that existed are being broken down." – Samir Bhavnani, VP of Sales, CommerceIQ

    The ecommerce boom of the pandemic has wound down, and growth is no longer guaranteed. In this slower environment, brands need to stop taking growth for granted and start looking for ways to optimize every dollar.

    This requires some adjustments to how brands do business, including working cross-functionally and tying key performance indicators (KPIs) for ecommerce managers to the success of the business as a whole. In other words, ecommerce leaders need to adopt a general manager mindset.

    What a general manager mindset is and how it helps brands maximize return was the topic of the "Unpacking the Digital Shelf" episode, "Having a General Manager Mindset in Commerce." In it, Samir Bhavnani, vice president (VP) of sales at CommerceIQ, and Gopal Shah, head of product marketing at CommerceIQ, explored the intricacies of how to adopt this mindset to improve profitability.

    Here are some of the takeaways on how to accomplish a general manager mindset, optimize spend, and connect inventory management to retail media.

    Taking a Holistic View With a General Manager Mindset

    Bhavnani first introduces the general manager mindset in the context of how roles and KPIs need to change now that ecommerce growth has slowed down.

    "Businesses really need to have a return to adulthood," he says. "And we need to do things that maybe you didn't concern yourself with when everything was growing 40%, 50%, 60%. Things like preventing leakage."

    To prevent leakage and grow revenue, KPIs for ecommerce managers now need to connect to KPIs for the entire business.

    "It's not about running my KPIs in isolation," Shah says. "It is, how do I think about the total business? One, obviously, to be a steward of the business. But two, selfishly, it's what's going to improve the cost to serve for their channel."

    Of course, working toward business-wide success requires efficient cross-functional communication and collaboration. According to both guests, this is an essential factor for maximizing spend.

    For example, Shah explains that the teams working on organic content and retail media can better collaborate by having one unified data set and ensuring everyone optimizes against that single source of truth.

    "Then, there's no question around what needs to be done that's best for the business … everybody's marching in the same direction," he says.

    In addition to working together, ecommerce teams also need to work with the rest of the business. After all, ecommerce has become fully integrated into omnichannel commerce. As Shah puts it, "It's no longer ecommerce — it's just commerce."

    "One of the things that I've seen is, this whole concept of 'do your job and stay in your lane' doesn't exist anymore," Bhavani says. "It is imperative now that someone on the marketing team has a relationship with someone in supply, has a relationship with someone in finance. We're starting to see ways of working … rapidly changing, where all of these walls that existed are being broken down."

    Optimizing Spend With Better Metrics

    When data and strategy are shared across functions, brands can become more strategic about where they spend their dollars to get the maximum return on marketing spend.    
    In this quest to gain a more holistic view of the business, Shah says that most brands are no longer looking at ROAS (return on ad spend) as their true north. Instead, they should ask: How do I drive the right marketing mix that's improving contribution profit? Improving both my paid and my organic halo?

    "We're seeing more and more people really double down on things like iROAS [incremental return on ad spend] — that combination of measuring both my paid activity and my organic halo [helps with] understanding which bids, which keywords, which SKUs are actually most incremental." – Gopal Shah, Head of Product Marketing, CommerceIQ

    He shares that one client of CommerceIQ that adopted an iROAS model saw a 33% decline in cost per click.

    Brands that analyze organic and paid in concert are much better equipped to optimize both, and to use the data from one side to improve the other. As an example, Shah explains that brands should make sure their paid is driving their organic.

    "We found that brands that look at their retail media, for example, and find the right keywords that they use to optimize their content are going to see that benefit from paid and drive that to organic," he says.

    Connecting Inventory Management to Retail Media

    With this more mature and integrated approach to ecommerce, even factors like inventory carrying costs are matters for the whole business to consider.

    Historically, Shah explains, these concerns would have been handled on the backend by someone in supply chain or finance. But today, with supply constraints and expensive carrying costs, it’s in brands’ best interests to make inventory oversight related to KPIs for ecommerce managers. He says a lot of brands focus on: How do I improve and tighten that order cash cycle? How do I take inefficiencies out of there?

    "Every single retail media activation should be tied back to every single purchase order," Shah says. "Brands should have some sort of almost self-healing inventory position. Where your inventory is too low, make sure that you're pulling back on spend. And conversely, if your inventory's too high, have a mechanism to overspend to drive that consumption … Brands that really do that well and that partner with their retailers to properly forecast are going to succeed."

    Better KPIs for Ecommerce Managers Maximize Profitability

    With ecommerce growth slowing, brands are under pressure to squeeze every bit of profitability they can from every dollar. To do that, ecommerce leaders need to know a little about every corner of the business.

    This requires being willing to evolve and innovate, starting with adjusting KPIs for ecommerce managers by encouraging them — and other leaders in your organization — to adopt a general manager mindset.

    To learn more about how your brand can drive more profitability, listen to the full episode.