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05 Mar 2024

Merging and acquisitions: how to create a coherent, high-performance eCommerce ecosystem?

Merging and acquisitions: how to create a coherent, high-performance eCommerce ecosystem?

It’s a well-known fact that online business comes in multiple and varied packages of challenges to overcome. From an organizational point of view, the acquisition of a new company or the merge of two existing entities can be a daunting challenge, giving rise to many questions and concerns. In this article, we’ll share with you the main issues related to brand architecture when acquiring or merging companies, so that you’ll have everything you need to make the best choices for your situation.

Consolidate or divide your eCommerce platforms?

During a merge or acquisition, should you merge your eCommerce platforms? Or keep them separate? Before embarking on either option, there are a number of points to consider.

First, it’s important to carry out a complete analysis and detailed assessment of each brand’s customer base. By taking the time to gather this data, it’s then possible to compare each brand’s target audience. Do they have distinct needs? Do you observe any striking differences in their purchasing behavior? Do the brands speak to a different clientele? If you’ve answered yes to all these questions, you may want to consider separating your eCommerce platforms. If not, it may be worthwhile to group the brands together on the same platform. Before making your decision, however, it’s important to focus on another aspect: your strategic objectives.

Secondly, before going ahead with a merge or acquisition, clear strategic objectives need to be established. Use these objectives to help you make your decision. If one of the companies offers a much better long-term return forecast than the others, it may be worthwhile unifying the customer base. If, on the other hand, the product offerings of the two brands are very different, or if one of the brands has greater brand awareness and recognition than the other, it may be far more advantageous to keep them separate. In the case of Johnson & Johnson, for example, whose product range is excessively varied, we can see the choice of assigning distinctive brands to each product, from Aveeno and Neutrogena for skin care, to Tylenol and Benadryl for skincare products. This choice is ideal in this situation, as these products not only target very different audiences, but also distinct needs.

Marketing can also be an important element to consider when analyzing your situation. Indeed, when one brand is more firmly established in its territory than another, it becomes crucial to assess the risk associated with its closure or relocation. Issues of language, culture and market characteristics must also be taken into account. For example, when a brand performs exceptionally well in a regional territory, it may be wise to keep its identity intact for that specific market, rather than change its banner. By retaining its identity, the company can capitalize on the trust and loyalty already established with local customers. On the other hand, it’s possible to assess the market in a specific region for one of the brands using online ordering. Depending on the data collected, a decision could be taken to open a physical outlet in that locality at a later date, if warranted.

As you can see, data and analysis must be at the heart of your decision. Traffic analysis tools such as Google Analytics can help you collect and analyze the relevant data. These tools provide detailed information on how users interact with the brand on digital, including data such as the number of visitors, their geographic origin, their language, the pages consulted, etc.

When it comes to unifying the platforms of different brands, there’s no magic bullet. The solution that best applies to your context, your clientele and your objectives will always be the best choice.

How can different brands coexist in the shopping experience?

Whether your platforms are single or multiple, brand representation in the shopping experience is crucial. How can we ensure that our different brands are well represented in the user’s buying journey? Here are some ideas you can implement to ensure optimal representation.

Standardizing the interactive experience

It can be effective to visually present the brands with links to their respective sites at the top of the interface, to make it easier for the user to understand the brand architecture. For regular customers, this provides reassurance while clearly informing them of the company’s new structure. It’s also worth noting that by placing the logos on the same line, the most popular brand with the highest brand awareness increases that of the others. We were able to use these examples for the needs of our client Lambert and their various ranges of Lambert and Redefined bags. At the same time, it may be important to consider standardizing navigation menus and product page styles to reinforce customer confidence in the eCommerce site, lower the learning curve for the user interface and thus improve the customer experience.

Offer cross-promotions between brands

Another strategy may be to offer cross-promotions of different brands on product pages to reinforce the link between them. Highlighting brand logos and proposing complementary products broadens the product offer and increases the conversion rate and average sales basket. It also ensures flexibility in terms of promotional strategies and stock clearance.

Unify the checkout basket

Whether your brands are listed under the same eCommerce platform or have their own separate platform, it can be advantageous to offer customers a unified shopping cart, enabling them to combine products from different brands under a single invoice. In this way, the purchasing process is standardized across brands, limiting shipping costs and tempting consumers to store more. This solution is even more effective when the products of your different brands are complementary.

Loyalty at the service of the customer experience

In addition to offering consumers various competitive advantages, loyalty programs are an excellent way for companies to obtain valuable data on the purchasing habits and preferences of their customers. By unifying a loyalty program across several brands, a powerful tool is put in place to ensure a wider purchasing reach for each customer. In terms of customer experience, it also ensures that acquired customers are retained over the long term, thus encouraging repeat business. A joint loyalty program also ensures an increase in the perceived value of the offer by consumers, which in essence encourages more profitable purchasing behavior. Loyalty programs that include several banners can even generate upsell and cross-sell opportunities.

Consolidating customer and product data is a fundamental pillar for a consistent and personalized user experience in the eCommerce ecosystem. To achieve this, it is essential to create a centralized repository, such as a Customer Data Platform (CDP), that brings together customer information from multiple sources. This unification enables purchase histories and customer preferences to be combined with detailed product data, such as inventories and descriptions.

By adopting consistent data standards and using advanced data integration tools, companies can ensure a 360-degree view of the customer journey, while optimizing inventory management and sales strategy.

To find out more, listen to the podcast “How to manage product data in eCommerce“.

Data harmonization requires precise mapping, meticulous cleansing and careful integration to establish unified customer profiles. These enriched profiles offer a deep understanding of customer behavior across all brands, which is essential for targeted marketing campaigns and tailored shopping experiences. In addition, the alignment of product attributes and categories ensures the consistency and accuracy of product information across the sales network.

To achieve this goal, it is crucial to identify and create points of correspondence between data sets, such as e-mail addresses or customer identifiers, using advanced matching techniques. Standardizing data formats ensures consistency and comparability. Once data has been cleansed and standardized, it can be merged, giving existing information a complete view of the customer journey. Ongoing data management processes are also vital to maintain data integrity, currency and security.

How can we unify the technology stack?

Unifying the ecosystem or technology stack as part of a merge or acquisition is essential to creating a high-performance, scalable eCommerce ecosystem. This process begins with an in-depth assessment of existing technologies, identifying redundancies and determining which solutions are best suited to the objectives of the unified company. Rationalization of the technology stack is often carried out in stages, with priority given to the integration or migration of critical systems and applications.

The use of integration platforms, APIs and middleware solutions is ideal for ensuring seamless communication between different systems. Standardization of common technologies, such as eCommerce platforms and CRM systems, simplifies maintenance and support. Continuous integration and continuous delivery (CI/CD) practices are also important for accelerating deployment and enhancing operational agility.

The migration of data and applications to a new technology platform must be carefully planned and managed to minimize disruption. Integrating different systems is crucial to improving operational efficiency and ensuring seamless communication within the enterprise.

Finally, effective change management is essential to ensure a smooth transition to the new technology stack. This includes user training and support, which are essential to maximize the adoption of new technologies and minimize resistance to change. The adoption of cloud and microservices technologies offers the flexibility needed to adapt quickly to market changes, stimulating business growth and competitiveness in the dynamic eCommerce landscape.

Discover the benefits of a MACH (Microservices, API, Cloud and Headless) transformation in this free white paper.

Should inventories and stock management be consolidated?

An often overlooked but essential aspect of the merge or acquisition process is the consolidation of inventories and the optimization of stock management. This step is very important to ensure the operational coherence and durability of the new merged entity.

Process and data harmonization

In this context, distinct inventory management processes come together. Each of these processes may have its own accounting methods, classification standards and management software. Without proper consolidation, the differences can lead to operational inefficiencies, financial reporting errors and a loss of visibility over the company’s assets. Often, the union of two companies involves the gradual abandonment of one of the systems in favor of the more efficient one, with the aim of optimizing and standardizing operations.

It’s important to bear in mind that changes in systems and processes also involve human dynamics. They can give rise to apprehension among employees, and affect their day-to-day activities. Transparent communication, appropriate training and support from the employer all help to ensure a smoother transition to the new organizational reality and easier adoption of the new processes.

Inventory optimization and cost reduction

Another reason for consolidating inventories when companies merge is the opportunity to optimize stocks and reduce associated costs. Merged companies may have excessive inventory levels on some products and shortages on others. By consolidating inventories, managers can identify surpluses and shortfalls, and take steps to rationalize purchasing, reduce storage costs and improve stock rotation.

In addition, by consolidating inventories, the company can benefit from better purchasing conditions from suppliers. By combining order volumes, where possible, and streamlining supplier relationships, the merged company can negotiate more advantageous rates and improve overall profitability.

Inventory consolidation also enables more efficient and consistent inventory management practices. By implementing uniform systems and processes for tracking, managing and replenishing inventory, the merged or acquired company can minimize the risk of stock-outs, product obsolescence and excessive carrying costs.

Establishing a good, coherent eCommerce ecosystem when merging or acquiring a company is essential to guarantee long-term success and growth. By combining best practices from both companies where appropriate, harmonizing processes, consolidating technologies and adopting a customer-centric approach, you can maximize synergy and minimize disruption. You need to prioritize transparent communication, cross-team collaboration and goal alignment to create a unified culture. It’s also a good idea to invest in training and development for your team to help build the necessary skills. By following these tips and remaining flexible to adapt to changes, you’ll be able to create a good eCommerce ecosystem.

 

Would you like a Novatize specialist to advise you on a successful merger or acquisition strategy? Contact us.

 

Novatize

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📥 contact@novatize.com

📍330-330 Saint-Vallier Est Street, G1K 9C5, Québec, QC, Canada

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