Operations

Note: Our team released a very cool benchmark report this week that challenges the way you think about loyalty programs. I’m linking here, and suggest taking a look.

What a week.

… And how many times have we said that in the last five years?

Since COVID, we’ve had three, maybe four “black swan” level events (COVID, shipping containers, iOS 14.5, tariffs). That’s one every 18 months or so. There is a lot of discussion about this rapid succession of crisis-level problems, but no one seems to discuss the reason why: Ecommerce exists because of globalization.

And because globalization is the first reason ecommerce exists, that means ecommerce is susceptible to both continued globalization (COVID, shipping containers) and the possibility of globalization retreating (tariffs). Which means ecommerce is harder now than it ever was before.

My takeaway from this (not being an economist, but as someone who has been tied to retail my entire life) is that the ultimate priority for ecommerce is—and will continue to be—operations.

As a CEO, I spend a lot of my time evangelizing our products, explaining their value and figuring out how to make them more of a priority. I don’t think they’ll ever be more of a priority than operations, though, and I don’t think they should be. The entire game flows from figuring out how to be flexible and resilient at an operational level.

But it does have me thinking: Our software isn’t unique in our position; every piece of software is in the same position. And I think that means software will be forced to change.

Software’s job, historically, has been to help people do their jobs better. The best software unlocks some new ability (functionality, really) that reduces the amount of time it takes someone to do something. That new ability, though, unlocks new work.

What’s sort of clicked for me in the last couple of days, though, is that while that new work can create new value (incremental growth), it has the ability to pull attention away from the priority that matters most. I’m not saying this happens in terms of employee-level execution (a marketer using KNO, Stamped or Repeat, for instance, isn’t usually in charge of managing supplier relationships), but it it does have the potential to happen at company-level execution (where do I allocate my resources for full-time employees?).

For current organizations, this might not actually be a problem that is palatable to solve (changing headcount allocation is a very painful process for everyone involved), but it is a problem that small brands without fully built-out teams can solve in a relatively painless way.

The solution, regardless of who adopts it, is probably a change to what software’s main value is. Instead of helping people do their jobs, it’s going to need to do the job.

This isn’t necessarily a new thought (it is the AI agent bull case, really), but the takeaway for me is that it allows for ecommerce to focus on the thing that matters most: operations.