Ahlers, fahrrad.de, Hallhuber, mytoys, Röther, Sport Scheck, tennis-point and many more. The list of those who have completely ceased or revised their e-commerce operations in recent weeks and months is as long as the list of those who had to drastically adjust their year-end goals (including prominent names like Zalando). The reasons are manifold and certainly include revenue declines due to new post-Covid consumer behaviours, high inflation, government crises, ongoing consumption slump, rising advertising costs, and general uncertainty due to wars in Europe and the Middle East.

However, it is now becoming increasingly clear that the reasons for many e-commerce retailers or the e-com business of renowned retailers and brands struggling are also undeniably structural in nature. The growth during Corona seemed limitless. Large structures in logistics, IT, and personnel were built up with high investments in the short term, betting everything on one card: online.

That this was a short-sighted approach is something many retailers are now painfully experiencing. Missing and significantly more expensive traffic, declining sales, high inventories and rising logistics costs are driving the profitability of the online business down. Lacking or inadequate omni-channel connections alienate hybrid customers, who like to browse online, but now prefer to “stroll” and shop in cities again. And even the holy grail of growth through the booming marketplace business suddenly turns out to be a profitability killer for many.

So, what to do when things suddenly stop running smoothly? What is needed to get back on track?

For one, many need a rigorous review of initiated activities, investments, and built-up cost structures, and a re-focus on the value-driving activities of the company. This applies to structural activities such as logistics, IT, and purchasing, as well as a new business case thinking for operational measures in advertising, content and processes, which in recent years (at least that is our impression) have become less popular with the “blind” growth.

In addition, a refocus on the customer and customer-centric (omni-channel) measures is essential. Relevant content, differentiating product offers, customer-oriented processes, exploiting omni-channel potentials, and investments in building and maintaining customer relationships (yes, CRM and first party data is still key) should have been the focus from day one, but as is often the case when there is a “gold rush” atmosphere, many believe they can suspend the laws of customer centricity. Only with smart customer-centric management will sustainably high marketing costs – often driven by the constant search for new customers – be reduced, more attention will be paid to the customer, and the necessary structures will be adapted to actual customer needs.