t to succeed and be profitable, they must be able to scale in a way that accommodates new customer demand, generates new revenue, and balances costs.  To achieve this, retailers should focus on these four pillars of e-commerce profitability. Pillar 1: Customer acquisition and retention Just as product pricing may differ from channel to channel, so does customer marketing. The costs associated with drawing customers into stores vs onto mobile sites are markedly different. However, data can help find the answers. By analysing sales figures against all marketing efforts, it is possible to understand the types of offers to which consumers are most responsive. The most expensive advertising options are not always the most effective.  Retailers should also consider the differences between new and existing customers and shape retention strategies accordingly. Pillar 2: Product selection, pricing, and promotions E-commerce marketplaces have more flexibility to offer a wide range of products with minimal inventory and warehouse costs. Brand partnerships also allow expanded product selection to a larger network of consumers. Retailers should view marketplaces as a way to enrich their product offerings and become a destination where people can find everything they need. For example, Vicinity Centres, which has 61 physical retail destinations in Victoria, has partnered with Click Frenzy owner Global Marketplace to expand its omnichannel retail presence. Additionally, many retailers continue to push e-commerce offers and promotions, despite thin profit margins. Instead, retailers should consider robust dynamic price-matching algorithms that can not only scrape data and analyse the best price from competitors, but also identify the right source for comparison. Pillar 3: Supply chain optimisation As shopping continues to shift to digital channels, many retailers find their fulfilment costs are rising.  While retailers struggle with fulfilment, Australia Post research shows that fast and free shipping are key drivers of sales.  Monash Business School found that consumers prioritise free shipping over fast shipping even more than their global counterparts, and that a lack of free returns was a top turn-off for half of Australian consumers. Fortunately, nearly all retailers can generate significant efficiency gains in the area of both fulfilment and returns by refining their supply chain. In many cases, making small changes can generate significant returns. Pillar 4: IT modernisation and big data It’s not surprising that e-commerce profitability is tied closely to technology. Data analysis, AI, and machine learning are increasingly being adopted across the retail sector. With enough high-quality data, retailers can identify trends that can help anticipate buying patterns, optimise inventory levels, right-size the workforce, and set prices and promotions that maximise revenue. AI can also be used to power solutions – from 24/7 customer service chatbots to customised product recommendations – thus helping retailers increase their profitability in the burgeoning digital world. Robotic processing automation is another powerful opportunity. Many warehouses are woefully out of date, relying on humans to collect items for digital orders. Through the smart use of technology, the time spent at every stage of the fulfilment process can be significantly reduced. Although virtually all organisations recognise the value of technology, many stop short of implementation due to cost concerns. However, technology infrastructure investments are increasingly not just enablers of growth but the key to viability. Our research has shown that IT infrastructure investments can pay for themselves in two to three years, due to increased conversion, reduced operating costs, and increased productivity and quality. Currently, many retailers are experiencing e-commerce profitability challenges due to the huge surge in online retail the pandemic has driven. But few are taking a holistic approach to maintaining sustainable growth and retention over time. Retailers need to ask themselves serious questions around customer acquisition and retention, look at ways to optimise catalogue and supply chain, and figure out how they can leverage data and analytics if they are to survive and thrive through the next decade.