Somdutta Singh, Serial Entrepreneur | Founder and CEO, Assidus Global | Investor | Bestselling author | Consultant – Govt of India.
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Recent years have led to a glut of e-commerce suffixes, creating an information overload in the minds of consumers and businesses alike. One of these new terms is an e-commerce accelerator. In such an environment, you might ask, “What does e-commerce accelerator mean, and why should I care?”
The current state of e-commerce
To answer that question, you need to understand the current state of e-commerce and then the “e-commerce marketplaces.” Gone are the days when it took multiple (and often excessive) channels to reach the end customer. Customers (and more importantly, their data) are now increasingly within reach of brands, enabling them to connect with their end consumers like never before. It has been said that data is the oil of the 21st century, and brands need to recognize this before they become increasingly disconnected from their audience.
With the growth and success of direct-to-consumer (D2C) brands, traditional brands need to completely rethink their strategy, which is where an e-commerce accelerator comes in.
Ecommerce accelerators play a role in an ecommerce strategy
Traditionally, an ecommerce accelerator was a brand support system designed to help established businesses embrace ecommerce. On a program scale, the accelerator typically provided access to resources, mentorship, and networking opportunities for brands. As a result, an accelerator program usually lasted only a few months, after which the brands were left to fend for themselves, navigating a constantly evolving digital landscape.
However, e-commerce accelerators have evolved from just a consultant to hands-on business partners. They now offer comprehensive solutions for brands interested in strengthening their e-commerce sales engine, while simultaneously having a presence in different marketplaces and regions to ensure optimal performance. For example, in recent years, some e-commerce accelerators have evolved to offer:
1. Expertise: Ecommerce accelerators give businesses access to thought leaders who provide insights and best practices for success in the ecommerce market.
2. Data: They provide data on inventory, product, competition, sales and marketing data insights, which can help improve data-driven decision-making.
3. Logistics: They can help solve logistics challenges, allow companies to focus on core business and improve product development and marketing.
4. Operational Support: Some offer a global presence and website management, helping companies maximize product visibility and increase brand awareness. This could be critical as Grand View Research expects the global cross-border B2C e-commerce market size to reach $5.58 trillion by 2030growing at a CAGR of 25.8% from 2022 to 2030.
5. Technology: Some e-commerce accelerators offer technology solutions such as apps or dashboards to make data, logistics and fulfillment work better.
Three considerations when working with an e-commerce accelerator
That said, there are some important considerations companies should be aware of before working with an accelerator:
1. Some accelerators prefer to do business based on sales or return models, which means that a partner must trust the accelerator to sell the product.
2. Since a standard part of increasing sales is related to advertising, companies with strict advertising budgets may not scale effectively with accelerators as accelerators require a minimum of advertising budget.
3. When hiring an e-commerce acceleration partner, the day-to-day e-commerce activities are outsourced. Just as companies can let employees go because of improved AI solutions, larger e-commerce teams may become expendable and cost-efficient companies should think about reorganization.
Businesses should consider these challenges as they explore whether an e-commerce accelerator would be a good partner for their business. However, the next few years are crucial to establish an informed domain in the e-commerce market as the adoption of online shopping, the emergence of new D2C brands, improved delivery options, mobile shopping and technological advancements (such as virtual reality and increased consumer confidence ) continue to reshape the landscape.
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