Introducing Marketing-Led Digital Commerce

March 17, 2016
Contributor: Chris Pemberton

Understand the pros and cons of the marketing-led commerce model.

Accountability and results through e-commerce were clearly a priority for the head of flower delivery service Teleflora, based on the job posting for a new CMO:

“The position drives all online commerce and will have P&L responsibility.”

The rest of the posting outlines an organization designed to enable delivery of digital commerce and other marketing results. Marketing leaders are increasingly responsible for commerce results, but many organizations struggle with how to organize cross-functionally. Teleflora exemplifies a marketing-led commerce structure in which the P&L and most functions like merchandising, commerce marketing and commerce technology are driven by marketing.

It makes sense to select a marketing-led commerce organization when both commerce and alignment of online and offline customer experiences are strategic, noted Kirsten Newbold-Knipp, research director, Gartner for Marketing Leaders.

While there are four organizational models common for enterprises that generate digital commerce revenue (sales-led, marketing-led, distributed and IT-led), the marketing-led structure will play an important role in a world where customer experience is the new battleground.


An emerging structure

The marketing-led commerce organization is an emerging structure that is common in younger brands founded after 2000, more established brands that only recently moved into digital commerce or companies that heavily invested in digital commerce before creating additional distribution channels. However, even long-standing brands such as Teleflora, which has no brand-owned stores and fulfills solely through affiliates, can adopt this structure when it makes strategic sense.


Increasingly common

The marketing-led commerce organization is more common than some might assume. Based on a Gartner survey of 173 organizations in the U.S. and Canada with over $500 million in annual revenue, 54% of brands took increased responsibility for digital commerce (up to full P&L responsibility). The fashion brand Alice and Olivia started in wholesale, then added digital sales and now has a VP of Global Digital Commerce who leads the P&L for the commerce business.


Strengths

Because this archetype excels at analytics across brands and business units and has visibility across the entire organization, it is well suited to optimizing for revenue opportunities across the full customer life cycle. Specific strengths of the marketing-led model include:

  • Ability to align online and offline business unit efforts
  • Access to customer data insights
  • Ability to coordinate with corporate and brand stakeholders

Address challenges

Be mindful that because it has broad marketing responsibilities and relative inexperience with revenue targets, marketing-led commerce could “soften focus and reduce speed of execution,” noted Ms. Newbold-Knipp.

As with adopting any organizational structure, seek out the weaknesses and “soft spots” in this model to identify potential shortcomings within your commerce execution, and take steps to strengthen those areas. Address cultural change, ensure all team members are comfortable with a revenue target and support talent that has strong operational skills geared toward execution.

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