“It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change” Charles Darwin
We are in the Digital era, whether it be the digitalisation of the watch or the grandeur of the self-drive car, digital is a facet of modern day life, and encompasses our daily routines and habits. This has never been so apt as in the world of Commerce today.
Many businesses are considering the shift to an eCommerce model as a channel for profitability and growth. But there has already been a shift. And in order for us to understand how this shift has driven not only profitability and growth, but ultimately customer success, we need to understand the transition.
Why the move from traditional commerce to eCommerce? Is simple eCommerce enough? Where do we go next? Who is driving the future of commerce? To answer these questions, we need to start at the beginning…
Traditional Commerce
The traditional commerce experience all began in 1846 with Alexander Stewart establishing the Marble Place Department Store in the U.S. With the credit card’s introduction in the early 1900s, cash-based commerce was the only way for a significant number of years. That early method of commerce was so beneficial for retailers, and consumers alike, for a number of reasons:
- Direct interaction: Based around face to face interaction, consumers are given the chance to ask questions, and work directly with sales staff to ensure they purchase the product that is right for them - a personalised choice.
- Low returns rate: Returns are a lot less likely due to the fact that a product can be tested before it is bought.
- Reduced fraud risk: While traditional commerce is by no means full proof, it is a lot easier for in store staff to identify potential fraudulent activity.
Divergence of Commerce
It wasn’t until 1994, with the catalyst of the Internet, that the shift from traditional commerce to eCommerce really kick started. But, given the benefits of traditional commerce, why did we witness such a seismic shift to taking the shopping experience online?
- Convenience. With ever increasing population sizes, and retail space not growing at the same rates, why go to a store and get pushed around by other shoppers when you can sit from the comfort of your sofa and shop? In fact, only 20% of online shoppers say that they use eCommerce due to price - convenience is the main driver.
- Price comparison. However, 34% of shoppers will actively look to compare the prices of a product to other vendors prior to purchase, putting the power firmly in the hands of the consumer.
These factors have forced modern day retailers to drive the value of the commerce experience over the cost of their product. I.e. as a retailer, I’m going to ensure your experience is SO good with us, you will not even consider another retailer.
However, it is worth noting that online sales actually have lower profitability than in store sales due to shipping, handling, and the cost of returned merchandise. And so whilst the shift to eCommerce has resulted in increased sales and a wider customer experience, it has hit the bottom line of overhead expenditure for most retailers.
Omni-Commerce – The future is here
As time has gone on, data has become ever more prevalent in creating a single view of the consumer. With the rise of the social networks like Facebook, Twitter, Pintrest, LinkedIn etc. there are 100s of ways that consumers can now be targeted to raise brand recognition, and ultimately sales. However, with more channels to reach consumers, how do you ensure that the customer experience is at the same level across every touch point?
Omni–Commerce is a buzzword that is flowing through retail. Essentially we are talking about a retailing strategy that delivers a seamless customer experience through all available shopping channels. Why? Because consumers demand it.
Few retailers are actually executing against their Omni-Commerce goals, and that is due to one key reason - retailers are struggling to gather enough information on what consumers actually want. Many retailers have some rudimentary data on how consumers are using their own channels - but note, “omni” as a phrase has Latin roots in the omniscient realm, meaning the ability to perceive all things - which in layman’s terms means, not just what’s going on in your own channel.
The lines between CRM and eCommerce are blurring, and in an Omni–Commerce environment, a payment isn’t simply about securing the funds to pay for your good, it’s about the customer experience, the speed of checkout, the brand loyalty, the convenience, and the personalisation.
And this is why I was personally so delighted about Salesforce’s recent acquisition of Demandware.
The walls between sales, service and marketing have come down and by adding eCommerce into that mix of blending functions, it’s exciting to see how a single CRM platform combined with an eCommerce suite, really will define, and enable a true Omni-Commerce experience - allowing retailers and consumer goods organisations to provide a truly personalised customer experience, anytime, anywhere via any channel.
For more insights into how new technology approaches are disrupting traditional retail business models, read our e-book: Engage With Today’s Customers: 4 Ways Retail Can Reimagine Business.
