The gravity of e-commerce: How e-commerce costs keep companies grounded, and what marketers can do about it

JP Castlin and James Hankins

Insights into digital commerce and how its cost structure renders profitability extremely difficult to achieve, despite its growth trajectory.
  • External business forces are adding pressure to organizations suffering from the gravity of e-commerce, which include: increased delivery and return costs, increased return frequencies, and increased labor costs.
  • Operations and distribution are key strategic levers for e-commerce fulfillment so it is important to improve physical and digital availability.
  • While consumers may be used to paying for delivery, charging for returns could provide a challenge; potential offers include discounting delivery while maintaining return fees or tying cost of returns to basket size.
  • Potential revenue streams that may mitigate the cost gravity of e-commerce fulfilment include: monetizing an already-built audience through retail...

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