Don’t let talent wars and delivery logistics hold e-commerce back
If e-commerce is to enjoy continued growth, the performance marketing sector must prepare for an increased strain on skills and last-mile logistics, warns the CEO of specialist agency Labelium.
Expanded advertiser volume was contributing to a “war” for performance marketing talent, while the burden on delivery logistics risks “collapse” in some markets, Sylvain Bonnevide tells Performance Marketing World.
As businesses shifted their models to cope with the pressures of the pandemic, the online ad market experienced a surge in volume, impacting the full digital supply chain.
“Advertisers and companies, with no other option, had to look at digital from a strategic perspective because of lockdown,” Bonnevide says.
In particular, product manufacturers were forced to reevaluate their approach to sell online, with some moving from a wholesale business-to-business model, to a business-to-consumer model.
“This is a complete shift,” Bonnevide says. “And this trend is impacting the whole performance arena. You have a lot more advertisers bidding on performance spaces online, you have a lot more data, and a lot more interaction with the value chain and its different actors.”
Buried within these shifts is a talent acquisition and retention challenge, Bonnevide says.
“Advertisers, agencies and technology platforms such as Google and Facebook are all trying to hire, but there is a limited number of hands and brains. There is a competition for the online digital advertising space, a war for talent.”
The issue is made more complex by a market requirement for people with a mix of complementary skills, built around the pillars of data science, creativity, business strategy, and marketing.
Applying local knowledge
To deal with the challenge, Bonnevide says Labelium, an independent performance marketing shop headquartered in Paris, was looking internally to train staff on specific skills, while ensuring talent retention strategies were culturally tailored to each of the 15 markets in which the agency operates.
For example, in the US and Canada, people tended to be motivated by strong CSR and philanthropy credentials, while in many European countries, training was more important to staff.
Bonnevide is also taking a longer-term approach to skills investment by partnering with universities, engineering and business schools.
“The intention is to build our next generation for the next five years; this is a strategic challenge for us to build those partnerships with educational organisations and ensure they train people with the skills we need,” he says.
Logistics under strain
Bonnevide also warns that without adequate investment and preparation, the delivery mechanisms that underpin e-commerce faced future strains.
From concerns around sustainability, ecological legislation, increased traffic congestion, warehouse capacity, the building of new logistics centres, Brexit in the UK, and the potential for further Covid-19 restrictions, the logistics supply chain faces multiple risks.
“At some point, if we keep increasing the volume of operations online, especially on product delivery, we are eventually going to see a collapse of the logistics systems,” Bonnevide says.
“We are going to have more ecological constraints, and the logistics value chain is not ready yet to support the increase in deliveries. I have a feeling that it's going to be very complex from a logistical perspective in the coming years, with a lot of different impacts on the way we live and the way we consume.”
Although Bonnevide stressed he was only reading the early warning signs, and these were his personal views, he warned the sector should prepare as the performance market matures and takes on more sophisticated techniques and strategies, better creative opportunities, and further platform support.
Even before lockdown, order fulfilment, logistics, and shipping were already a complex and expensive landscape, and a study from delivery data company Convey noted last year that more than half of retailers found it “significantly” challenging.
With manufacturers now adopting direct-to-consumer models, and a change in consumer shopping habits more broadly, supply chains face more complexity.
Despite the challenges, Bonnevide was optimistic that Labelium could deliver. Over the past year it has diversified from media performance to e-commerce performance, utilising platforms and tools and media activation to increase retail sales with a focus on the fashion, beauty and travel industries.
Bonnevide, who was named CEO of the wider group in 2018, and launched the agency’s first international office in Madrid in 2007 following stints at Accenture and Greenwich Consulting, has also overseen the launch of a new unit to diversify into high impact media, such as gaming, video and audio.
“My challenge is to make this company five times bigger over the next five years,” he says.
“If we can adapt correctly as an agency to client needs, then we can grow this company. What's really exciting is that we're going to need new skills in 24 months that we don't even know about right now.
“That means we need to either develop those new skills ourselves, very quickly, before our competition, and before our clients ask for them - or we acquire those skills through the acquisitions of new companies.”
Labelium currently employs more than 400 staff, with clients including Viceland, Lacoste, Jimmy Choo and Dior.