The bar has been raised for online commerce: what initially was a convenient channel for transactions, is now a full-fledged driver of the consumer experience. Deloitte sees five trends that illustrate how digitisation is transforming the customer relationship.
Five trends
The Covid-19 crisis has caused an enormous acceleration in the field of digitisation, raising the bar for all companies. People now expect more from online shopping: they expect brands and companies to understand and anticipate their needs, offering them products and services that match their personal lifestyle or the needs of their organisation.
Deloitte has identified five trends that are moving digital commerce from a transactional model to something much more powerful: a catalyst that grows customer numbers, loyalty and revenue, and creates new business models.
1. Personalisation with AI
80 % of consumers say they are more likely to buy from companies that offer personalised experiences, but for many brands this still feels like science fiction. How can you use customer data to create hyper-segmented – and ever smaller – cohorts of people with similar preferences and patterns?
Machine learning and AI are helping to deliver the same personalised response as yesteryear’s corner shop, but on a massive scale. These decision technologies recognise patterns and know, for example, when a 10 % discount makes a difference to a customer who has returned three times to view a product.
It is recommended to start with low hanging fruits: custom landing pages for different customer groups, pre-filled fields with what you already know about a customer (size, delivery address, payment method…).
Smart segmentation can help build relationships that feel one-to-one, without infringing on individual privacy, says Deloitte. But we still have a long way to go: only 17 % of brands are very effective at segmenting and targeting customers with the greatest long-term potential.
2. The flywheel effect of marketplaces
The pandemic has boosted the entire e-commerce industry, but one segment of the market grew twice as fast, with an increase of up to 81 % in gross sales volume: the online marketplaces. It is a business model that offers many advantages: you can increase profitability without taking on additional inventory, customers spend more time on your platform, you can align your brand with like-minded brands, and you get access to data that helps to further personalise buying experiences and sharpen your own offering. It can create a flywheel effect.
But it is also a very distinct business model that requires a specific approach. Which brands or products are complementary to your own brand? What is the risk of cannibalisation of your other channels? Do you want to be a broad marketplace across more product categories, or rather a niche marketplace?
With more and more companies launching their own marketplaces, the next trend could well be consolidation, with the winning marketplaces eliminating the weaker ones. The winners do not necessarily have the largest offer, but they do offer the most coherent customer experience.
3. Liking becomes buying
People spend about two hours every day on social media, and for the younger generations, even more. It is therefore the perfect place for brands to meet their consumers. Several social media platforms have developed selling tools that make it easy for users to seamlessly place a purchase without leaving the channel. ‘Commerce is content’ applies: brands connect with influencers, make the products in their photos and videos clickable, detect trends to link their products to. Liking becomes buying.
It comes down to making the right choices: which channels are your customers active on, which influencers do they follow? Sometimes niche influencers have more credibility than more prominent and expensive names. Livestreams feel personal and interactive: young consumers often prefer them to static content.
Social commerce not only brings in more sales, it is also a powerful tool to get to know your customers better. On their favourite social media, people are willing to share a lot of information, because they can see the benefits right away.
4. Build block by block
Technology is evolving at an ever-increasing pace: the brand new web shop you build today may already be out of date tomorrow. And this while consumer expectations are ever higher. More and more companies are therefore opting for a composite IT architecture that allows them to build their commerce functions block by block, so that they can quickly adapt and scale tools to meet changing trends and needs.
Traditional shopping platforms are often conceived as ‘all-in-one’: they contain all functions, from search engine to check-out, and if you want to scale up or fine-tune one function you have to upgrade the whole platform. Deloitte recommends a modular approach: that way, you can select the best tool for each application from a range of technology providers, rather than looking to a single provider for everything. As an interior retailer you want the very best 3D display for your sofas or tables, as a supplier of technology products you may need a more sophisticated search engine.
5. B2b goes digital too
Until the pandemic, business-to-business companies saw digital as a separate channel that threatened to cannibalise the sales figures of their representatives. Only corona forced them to invest fully in digital solutions. In the process, they discovered that digital did not compete with other sales efforts; on the contrary, it supports, helps strengthen relationships and stimulates growth.
Digital tools provide better data insights, better informed buyers and more efficient service. They free salespeople from routine tasks so they can focus on higher-value interactions.
The question, then, is no longer “Can you use digital to support B2B sales?”, but rather “In how many ways can digital redefine B2B commerce to boost sales and trading relationships?”
One food distributor, for example, saw a 40 % year-on-year increase in revenue from its online customers, compared to around 9 % for its customers in general.
From buying to experience
Conclusion? Not every one of these five trends is as urgent or relevant to every brand or company.
But if you are looking for new growth and new ways to engage with customers (and who is not?), you should first look at your digital commerce platforms and strategies.
Because what your customers once saw as just a convenient way to buy is now a key driver of their experience with your business.
