4Ps are key as e-commerce players look for profit

Marketers for companies that sell goods online should return to the 4Ps of product, price, place and promotion to counter the changing fortunes of e-commerce, according to a new WARC exclusive report by JP Castlin and James Hankins.

Why it matters

Brands in retail and many other sectors have increased their focus on direct sales to customers online in recent years. But the rise in online sales has – according to the authors – had a negative impact on profitability. In a gloomier economic climate there has been a shift in emphasis from growth to profit, increasing the pressure on businesses that sell principally online – the collapse of Made.com in the UK is an example.

What do they recommend?

Castlin, a strategic management consultant, and Hankins, Global VP Marketing Strategy and Planning at Sage, argue in the white paper that marketers in these companies can mitigate this pressure. For example:

• Optimising fulfilment – for example, by developing a 'marketplace' approach that brings additional products or brands into the mix offered to consumers;
• Rethinking pricing, including delivery and return fees;
• Investing in proprietary ad networks (retail media);
• Using brand-building advertising to soften price sensitivity among consumers.

Where can I find out more?

The full report is available to subscribers of WARC Strategy and WARC Digital Commerce via warc.com. For one week only it is available to download to non-subscribers here.

Final thought

"Companies that fail to mitigate the cost of e-commerce will find themselves dangerously exposed. Not only is consumer demand shifting, but capital is, in the wake of rampant inflation and subsequent interest rate hikes, becoming increasingly expensive and difficult to come by."