Who’s who in the Digital Economy?

Defining a new ecosystem at the 1st e-Commerce Meeting

16/05/2014 Barcelona

I Encuentro de e-Commerce

Understanding exactly how a business fits into the e-commerce ecosystem is key to identifying the specific challenges it faces today and in the near future. It is also crucial to fully leveraging the experiences and the trends that are being set by leading companies in the industry.

Defining who’s who in the digital economy was the theme of the e-Commerce Meeting organized by IESE and OMD Resolution recently. The conference brought together leading companies, representing the four families that live together within this ecosystem.

Exclusively online companies are known as pure players, whilst those with both an on and off-line presence are called bricks and clicks. There is a third family called enablers, and finally companies that have opted for a sharing economy model.

Pure Players

Companies using purely online channels usually enjoy global reach. However, many of these pure players are having to adapt to individual consumer’s needs to see, touch and try their product.

Sales outsourcing to intermediate contractors operating in less digitized environments has also presented the challenge of factoring in necessary face time with key partners.

And although they operate at a global level, pure players still have to adapt themselves to the idiosyncracies of local markets if they want to be successful.

No one knows this better than Lucas Carné, co-founder of fashion outlet Privalia. Global success, he says, is down to taking a local approach to international growth. And in the case of Brazil, with its sheer size and complexities, he reveals that Privalia has been forced to migrate to a “completely new logistics and distribution model.”

Bricks and Clicks

With the boundaries between the analogue and the digital becoming increasingly blurred, businesses need to evolve to keep pace with a new type of consumer.

Today’s consumers connect with brands via the web, Facebook and mobile devices. But they still go to the physical shop to make their purchases. And even when they buy online, they still want to be able to collect or return goods at the local store. Consumers continue to use traditional media, such as television, but today they are texting or chatting online as they watch their favorite programs.

In order to reach these consumers, businesses are being forced to take an omni-channel approach - one that offers seamless integration across all operational and communications channels. The end-goal, as Roger Graell, e-shop manager for Mango says, is to deliver the same purchasing experience whatever the channel.

“The customer is the customer, regardless of how or where they make the purchase.”

Key to this experience, he says, is having the customer complete the transaction to their maximum satisfaction. But the brand itself is still the key driving force in bringing the customer to the point of purchase.

“Our main focus is our brand, and the confidence the customer feels in it. This is our top priority.”

Unlike Mango, LaModa.ru started out as a dot-com selling “fast fashion” to online customers only. Recently, however, the company opened its first showrooms. As director of operations, Paul Rogowski explains, “We saw a concrete need for an offline sales channel. Around 15% of our clients were asking for a physical environment to try on our clothes.”

The real challenge, he says, is driving activity in both environments without one cannibalizing the other.


A crucial role within the ecosystem is that of the enablers: businesses that create the platforms and infrastructures that facilitate e-commerce.

This family has two key tasks. First, they drive online sales by expediting the purchase process and the shipment of goods. And second, they support the intermediary sales force, ensuring that processing issues are kept to a minimum or eradicated altogether.

Keeping the consumer engaged in the transaction and less likely to abandon the process depends on having foolproof payment and delivery methods.

Jordi Vallverdú, director general of OmnicomMediaGroup, says that 76% of all online transactions are still made with credit or debit cards. But alternative payment methods are becoming increasingly mainstream. PayPal, or systems such as Lending Club, which enable loans between users, are growing in popularity. And virtual currency is also on the rise. The peer-to-peer payment system Bitcoin is now used in no fewer than 200,000 transactions around the world every day.

The threat of cyber fraud is minimal though, according to Brock Pierce, co-founder and president of GoCoin and Syndicate Manager of BitCoin.

“BitCoin is just like cash. It’s a completely transparent service. Every transaction and every coin is totally public.”

Pilar Aurrecoechea who heads up financial services at Telefónica, sees other issues that might affect the digital economy. “It’s not just e-commerce that’s at stake,” she says, “It’s also the industry’s ability to capture and deal with big data. And there’s the quality of customer relations.”

However both the traditional financial and emerging virtual currency sectors are in agreement about one thing: mobile is the absolute key to driving online sales; and nowhere more so than in the emerging and still under-exploited area of micro-transactions.

Meanwhile, when it comes to transport and courier services, Yves Delmas of Suer believes the industry is seeing innovative methods that might evolve into standard practice.

He cites the growing trends of “Super Urgent Deliveries” which guarantee same day, weekend and nocturnal deliveries; low cost versus premium deliveries offering segmented services according to value or speed; and cost-cutters such as flat rates, click & connect, collection points and automatic pick up.

Sharing Economy

Collaborative consumption is not a new concept. However, in the past few years a number of new business models have flourished that are based on exchange or the shared use of resources.

From houses to cars, or money to professional services, the sharing economy model appears to be on the rise. There is no clear consensus yet as to whether this phenomenon is here to stay or a transient by-product of the economic crisis.

Many people initially become involved in these models out of a feeling of necessity, says Jeroen Merchiers, general director of Airbnb in Spain and Portugal.

“Around 10,000 families, or 53% of our host families in Barcelona, have told us that getting involved in Airbnb meant that they could keep their houses from being sold or repossessed.”

Continuing involvement does not seem to be down to necessity but rather a sense of conviction with more users buying into the concept.

Sharing is not just fashionable, it is also efficient, sustainable and cost-effective, attributes that are increasingly valued by consumers, especially the younger generation.

Pierre-Dimitr Gore-Coty is regional director for North and Western Europe with Uber, an application that connects users in 36 countries who want to share transport.

“Ridesharing is a reliable, accessible and sustainable system that also helps pay for the upkeep of their own vehicles, ” he says. “The key thing is to build confidence and trust among peers so that other users know what you are offering is safe and guaranteed.”

The Future is Mobile

According to Forrester, by 2018 more than $293,000 million will be spent on mobile transactions in the U.S. which is more than double the $114,000 million estimated for 2014.

The real question for businesses is no longer whether they should adapt their website or opt for an application. Today they need to understand whether the mobile service they provide meets the user’s requirements or whether it is capable of fully leveraging the multitude of opportunities that new technologies and applications are creating.

Guillaume Bacuvier, managing director of customer solutions and innovation at Google, has a vision of a digital economy in which “every customer becomes a potential target.” This transition, he believes, will ride the wave of emerging technologies such as geolocalization, contextual advertising, mobile scanning of objects, augmented reality and mobile devices that interact with other appliances a user may already have.

There seems to be very little doubt that the future is mobile and full of commercial possibilities.