José Carlos Cortizo is CMO of Product Hackers, podcaster at CiFiTec and Mumbler, consultant and speaker. He has written the book PsychoGrowth I: Hacking Your Buyers’ Brains, a manual on human behavior and the digital sales process. With his expertise in eCommerce, he helps companies in digital sales. Also, when they let him, he’s a techno DJ.
The growth of sales in ecommerce has been unstoppable in recent years. Do you think it has been temporary due to the pandemic, or that it will be a trend that is here to stay?
The effect of the pandemic has been clear and we must understand that we are still under the effects of the hangover from the pandemic, so we do not quite understand everything that is happening.
But it is not that the pandemic temporarily changed the rules of the game, what it has meant has been an advance of several years in the development of eCommerce at all levels . It has generated purchasing habits, has forced many eCommerce operations to improve, has opened up new business opportunities, etc.
“What any trend needs is for people to lose fear, try it and then adopt the habit”
Not everything that has happened with the pandemic will stay, but the push of about 5 years in terms of eCommerce penetration will. The pandemic has gone on so long that it has generated many habits.
Is Spanish retail aware of the importance of digital sales? Do we have a competitive digital retail in relation to other countries?
I think we have a very good eCommerce ecosystem . Large independent players such as TradeInn are good proof that we are competitive worldwide and PCComponentes has shown that it is possible to lead a category within eCommerce and be one of the most relevant players competing against many other European alternatives.
Many times we get complex when comparing ourselves against other countries because we make very simple comparisons. If you compare yourself against Germany, which has a GDP 3 times higher than that of Spain, almost double the population, and a greater tradition of distance selling, you are the loser.
“The reality of Spain, in recent years we have been able to catch up in terms of digital initiatives, with many vertical pure players who are a true benchmark and who sell throughout Europe”
Many of these players are leaders or are competing to be leaders in their categories throughout Europe and part of this happens due to the competitive advantages that selling from Spain has and that we must exploit more.
At a more traditional retail level, digitization has been slower but I think we are already at a more than acceptable level.
What are the keys to success of a good online sales strategy?
Business basics always rule. Buy well, sell well and at a good price and have pristine operations.
It’s almost out of the box but we complicate our lives a lot when it comes to creating sales strategies.
If you have a good product, that people want to buy, at a good price and you manage to attract customers with an acquisition cost that fits within the margins you can afford, you have it all done.
The biggest problem starts with the fact that many strategies do not focus their core on understanding the profitability of the business and the products.
D2C is beginning to prevail in online sales along with purchases in marketplaces. Are we heading towards a digital world dominated by these two models?
Totally agree. We are replicating in digital what we have seen for decades in the physical. Large shopping areas that are now marketplaces and brands that create the product. Sometimes cooperating, sometimes keeping distances, depending on the strategies of each one.
“I think it is something that we have already experienced several times in the history of humanity and of commerce, the same cycles always pass, what changes are the media”
And surely we will live within not too long another cycle of change. The metaverse and web3 are coming, this will change the rules of the game and reset the cycle. There will be pure players of this medium that are born and are the “next Amazon” or the “next English Court” and for a few years we will live what we have lived in the digital channel in the last two decades with a change in the balance of power until consolidate this new market.
Do you think that the subscription model will end up being imposed or is it something within the reach of few brands?
It is a model that makes a lot of sense and that consumers increasingly accept more. Now, it doesn’t make sense for all products or all situations.
Creating a meaningful value proposition for the customer around subscription is complex and also takes longer to penetrate the market because the commitment involved curbs impulse buying. To successfully launch a model of this type, you must have that patience, resources and understand what your client needs.
In your experience advising ecommerce, what would you say is the main problem they encounter in developing their business?
They always tell you that the problem is selling. They want to sell more than they are capable of.
“The reality is that their problem is usually a lack of strategy”
Or because they are small and have been able to grow to a certain point without really knowing how they have achieved it. Or because they are very big and have many people deciding and therefore slow and with little definition. The thing is that in many cases there is no clear focus at the strategic level that sets the stage for the teams involved.
And the strategy should never be “we are going to sell X million this year” because there are many less good ways to invoice that amount. The strategy goes through understanding the margins with which we are going to operate, the positioning in the market, if we are going to focus on capturing more or retaining better, if the marketplaces can be our allies… and establish priorities and order of action that allows us to put our teams to work on the right challenges at all times.
Without logistics there is no ecommerce. What factors determine good logistics?
Customers increasingly demand fast shipments and, at the very least, be very clear about when they are going to receive their orders.
For me, good logistics has to meet the client’s needs and, obviously, deliver in perfect conditions.
And from the retailer side, that it is fully integrated with their systems and that the logistics cost is affordable. This has to be very well measured in the financial model. “Free shipping” decisions continue to be made without understanding the impact on the profit and loss account and then what happens happens.
Are ecommerce companies aware of the importance of logistics in the shopping experience?
Today, eCommerce is more than clear about the importance of logistics.
Another thing is that it is difficult to fit the reality of logistics costs into the financial model due to price pressure from the competition, loss-based growth policies, etc.
Do you recommend the use of logistics solutions such as Deliverea for the proper development of an online business?
“Being able to manage the relationship with several logistics operators from a single point and single integration, as well as optimizing costs and operations, is a dream come true. So for any eCommerce with a minimum volume of shipments, these types of solutions, and in particular Deliverea , are a must “
What are the logistics trends in ecommerce?
I have the feeling that we continue with the challenges that we had in the last five years: delivery slots, increasingly faster deliveries… there is still a lot of aspect that is not well resolved and that impacts last mile deliveries.
To this I would add the entire trend of Quick Commerce and ultra-fast deliveries, although it is a model that I find difficult to understand that it can take shape outside of large cities where there may be a large volume.