The key to success in e-commerce: online platforms

In the realm of modern retail, e-commerce has come to the fore as an essential alternative sales channel, one that is rewriting the rules on sales strategies for reaching and engaging a vast global customer base. Beyond transactions, e-commerce has given rise to an ecosystem where a continual flow of unique experiences fosters customer loyalty and drives long-term growth. Successful e-commerce platforms are refined tools that reflect a deep understanding of every aspect of operations, from customer management to product delivery. These platforms nimbly navigate complex networks of buyers and sellers, leveraging on the integration of physical and digital channels.

This said, to get ahead in today’s global economy, retailers must be proactive in tackling risk management, both to keep their business models intact and to ensure an exceptional customer experience. When we think about risks in the context of e-commerce, we focus mainly on buyers and sellers.  For consumers, risk means credit card fraud or delivery failures; for retailers, logistical snarls or cybersecurity breaches, among other things. But to do an accurate risk analysis, we also need to factor in platform operators who connect consumers and retailers in the digital marketplace. After all, without online platforms, e-commerce wouldn’t exist.

At the Sustainable Operations and Supply Chain Monitor at SDA Bocconi School of Management, we conducted research that shines a light on how modern digital supply chains have evolved.  E-commerce platforms play a crucial role in this digital world, acting as indispensable intermediaries linking buyers and sellers. In fact, neither one can take full advantage of the tremendous opportunities offered by e-commerce if platform performance is sub-optimal.  This means that the first step in launching a successful online business is to lock in stable, reliable e-commerce platforms, built not only on the fulfillment of single transactions, but the prosperity of the entire e-ecosystem, which runs parallel to our physical ecosystem.

Beyond these findings, our results show that platforms have to contend with a series challenges to guarantee a safe, seamless shopping experience. One of the main concerns is the lack of operations integration among all the players involved, resulting in inefficiencies, delayed order fulfillment and missed sales targets. For example, when there’s a mismatch between virtual and physical inventory, a product that’s listed as available online may actually be out of stock at the warehouse. This leads to delivery delays and dissatisfied customers.

Along with operations issues come other criticalities linked to the risk of unauthorized access to platform systems, which can compromise the security of sensitive customer data. The fact is that e-commerce platform managers are under constant cyberattack which varies in nature and intensity. Only robust, impenetrable systems can prevent sensitive data from being corrupted or destroyed, an eventuality which would jeopardize customer trust and the integrity not only of the platforms but also of the brands showcased in these digital storefronts.

In addition to the issues we’ve just described, there is another much more serious one: the lack of qualified, expert personnel. In the digital world, proliferating AI systems and chatbots are on track to replace humans, especially in online service management.  So, one of the most worrying weaknesses in the system is the shortage of specialized staff to handle operations and coordinate the digital supply chain more effectively by managing online platforms. But the reality is that recruiting and retaining personnel with the right skill sets can be hard to do, seeing as the job market is constantly evolving and the demand for qualified professionals often outpaces the supply.

The scarcity of experienced personnel can have major repercussions for e-commerce platforms and online buyers and sellers, compromising service quality and operational efficiency. For that reason, moving forward, companies will have to invest in training, upskilling, and attracting new talent by offering competitive incentives and a stimulating, innovative work environment. This will give online platforms the life force they need to face the ever-evolving challenges of the digital marketplace.