Defining an eCommerce Org Structure

November 14, 2013 | Posted in eCommerce | By

One of the first things I’m often asked at the beginning of an engagement is “How should our organization be structured?”  Many eCommerce businesses are not set up in a very efficient manner, including many large companies.  Regardless of the size of your eCommerce team, there is a structure that can be used to group functionality and tasks so that the work gets done in the most efficient manner possible.  Every company is different, but inevitably when I work with clients to define an organizational structure for their eCommerce team, I end up with something very similar to the same thing.

If you break down the shopping experience, I find that there are often four different universal areas for businesses to focus for eCommerce.

While some of the specific work tasks tend to cross the lines a bit, the four primary pillars are:

  1. Getting customers to the site
  2. Helping customers find what they are looking for and presenting it in a way that makes them want to transact
  3. Processing customer orders (collecting payment and getting the product to the customer)
  4. Taking care of the customer AFTER the transaction is complete

We can put better names to these divisions of work, which make more sense and give a little more clarity as to the roles and work that is done within each.  Knowing that everyone’s nomenclature is different, we’ll use the term “team” for each of these departments. That is just a personal preference that I have, and it makes it feel more like everyone is working together.  I realize at many places it may not always feel like that.  🙂

Marketing Team – This group is responsible for getting traffic to the site.  Any requirement or task that has to do with getting traffic to the site would fall under this category.  Some examples of those tasks would include inbound marketing, pay per click, search engine optimization, social media, homepage design, site look and feel, email marketing, and customer segmentation requirements.  Basically, the job of the marketing department is to get people to the site.  Once the customer reaches the site, the job of the marketing team is done for that visitor.  In essence, the marketing team brings people to the site, and hands them off to the…

Merchandising Team – The merchandising team has the sole job of taking the people who are on the site and turning them into paying customers, also known in eCommerce terminology as, a “conversion”.  If conversion is a familiar term for you, then you would correctly assume that Conversion Rate on an eCommerce site should be completely owned by the head of the merchandising team.   Every task of function needs one specific owner, often with many contributors, and the head of the merchandising team tends to have more tasks than others to own.  In my opinion, and no disrespect to the other areas of an eCommerce organization, but the head of the merchandising team is the most important person in the entire operation.  If you do not have the right person in this role, you will likely fail. If you have the right person in this role, you will likely thrive.

This person needs to be a seasoned eCommerce veteran who truly understands retail, and lives for analytical data such as conversion rates, average cart size, cart abandonment, checkout funnels, and that sort of thing.  As that person is ultimately responsible for those analytics, they also would be the person with final decision making authority over things such as site taxonomy, product detail page look and feel, category structure, and navigational appearance.  They also would own site search and the optimizing of site search results, as well as cross-sells and up-sells, category landing pages, promotions, and ultimately, the entire checkout process.

A good merchandising team will provide a customer with the products they want in a manner in which they expect to find them, and then smoothly complete the checkout and purchase of that product.  A great merchandising team will do the same thing, but also present some higher margin alternatives and perhaps convince the customer to buy a few higher margin accessories or impulse items along the way.   That skill alone is so valuable when you consider the cost of customer acquisition is usually quite high in eCommerce, so selling more to those customers (increasing average cart size) is the difference between a good sale and a great sale, and in essence.. a good year and a great year.  Once the customer has found the products they want to purchase, and have navigated their way through the checkout button, the next hand-off comes when the customer clicks the submit order button on your site.  Clicking that button then passes the baton from the merchandising team to the…

Operations Team – The operations team is responsible for the successful operation of all logistics of completing an order, commonly referred to as ‘Order Processing’.  Order processing begins with the acceptance and processing of the customers payment method, such as a credit card transaction.  This team will own the relationship with any payment processor third parties, banks, merchant accounts, tax collection and submission, and shipping requirements.  Many companies use third party vendors who specialize in these areas, specifically when it comes to tax and shipping, and the operations team is responsible for managing all of those relationships and requirements.  There is a lot of pressure on this area as well, because no matter how great of a job the marketing and merchandising team does, if the operations team drops the ball, then that customer may very well never return to place another order again.  They also have the responsibility of fraud detection, which is a very commonplace activity that is part of eCommerce life nowadays.  Whether your company has a large distribution center or relies entirely on dropshippers, the operations team is responsible for making sure that purchased products are delivered to the door of the paying customer.  This includes the “pickers and packers” who take the item from inventory and prepare it for shipping in an appropriate and cost efficient sized box, as well as overall inventory management to make sure that the numbers of which products are on-hand and which are not, are accurate. Once the package arrives at the customer’s doorstep, then the operations team has done it’s job completely and it is time for the…

Customer Service Team – The customer service team is there to support the post transaction customer experience.  This would include everything from the order confirmation email, order status tracking, and shipment confirmation, through to processing returns if necessary and following up with customers to ensure their satisfaction with surveys or requesting a product rating and review.  This also means staffing a customer service phone number, email, online chat, or even snail mail communication if your organization offers it.  Assuming the customer service team does a great job to complete the sales process, it would then be handed back over to the marketing team to target those previous customers and start the entire cycle over again.

There are definitely many roles and responsibilities under each of these teams, and many tasks have somewhat blurred lines and there is often questions about who owns which aspects of each.  I’ll add a post in the future to talk more about that and best practices for each of these groups, but for now, I hope this helps explain best practices for a high level eCommerce org structure.

Please feel free to use the comments section below to ask any questions or provide your own input as well.
Joe Rozsa