The last eighteen months have seen major shifts in the retail market driven by the economy shaking impacts of the pandemic. One of the most significant shifts though has been the role of digital, not just in terms of buying and selling, but also in terms of customer service and management, logistics, supply chain and more. eCommerce became no longer an optional route to market but a fundamental requirement for modern commerce.
In July 2021, Greenlight Commerce, BigCommerce and Attraqt sponsored a Mixing Digital roundtable event on how to stay relevant and manage growth, bringing together a group of eCommerce specialists to explore the impact of the last few months on the ever-evolving commerce landscape. That means not only a sudden shift to online and direct to consumer for many B2B businesses, but an emergent necessity to integrate digital channels and refocus business around not only the purpose of physical stores but around the importance of agility and adaptability in commerce overall.
Until the last decade or so, success in commerce for the most part was built on optimising physical stores and sales, focusing their expertise to optimise sourcing, shipping and selling what customers wanted in physical locations. Competitive pressures from start-ups and online retailers prompted an overall expansion of digital presence, and conversations about the importance, and potential of, omnichannel. What is clear from the roundtable is that this is no longer about future potential but about customer expectations today.
Future-proofing: New ways, new channels for success
Lockdown demanded that retailers found new ways to connect with the customer. Whether that was expanding delivery, curbside pickups, third party deliveries (a big bonanza for Amazon, Deliveroo and Uber Eats), new processes needed to be put in place. While for many this proved a success, long term use of third-party deliveries once again raises the question of who owns the customer.
The pandemic forced years of potentially slow transformation into a short period of rapid change necessary for survival. When shoppers could no longer physically shop, an effective online presence, digital shopping and a multitude of delivery and pickup options became a requirement for many. Not only that, but it made clear that adaptability and flexibility are no longer ‘nice to have’ for the commerce industry. As one of the delegates said, “We all need to be ready with ideas for the next Covid. We need a better handle on controlling costs, the agility to do more – it’s about future-proofing.”
Technology responsiveness to keep up with change
What has emerged from the process is the understanding that where eCommerce excels is in the customer relationship, building responsiveness and agility into commerce systems, and an ability to provide customers with what they want. That recognition has spread across sectors and industries, and many companies are waking up to the idea that failure to integrate that learning across all its sales channels is a route to failure in the long run. Most companies now understand that you need the ability to plug in new technology enabling new options and have it work immediately. Another delegate pointed out that, “Change is going to happen and we need to be the first responders.”
Going where the customer is, is going where the money is
While the importance of social has been growing for some time, the amount of time that people have spent at home and the increase in time on social media has seen remarkable transformation – the rise of TikTok for the fashion industry is just one example. It’s changing the dynamics of the ad market as well because the money is where the customer is. Today, that’s mostly on social whether it’s brand association, influencer partnership or old-fashioned advertising. The rise of social has seen new channels come into play, and that itself plays into the importance of data. Apps continue to be popular because it means data ownership by the brand, but the key questions remain the same. Who is buying – do you know your customer; what are you to that customer, do they care if they’re buying from you?
Interconnectedness, not just eCommerce
Another emergent lockdown shift has been the awareness of the interconnection of different elements of the economy, and commerce overall. There has been significant discussion of the changing social contract, which has resulted in a huge upswing in interest in sustainability. This hits different segments of the market in different ways – whether it’s fast-fashion getting attacked, luxury goods being returned because a vintage alternative has been found, interest in food sources and manufacturing processes, brands face both risk and opportunity as they position themselves for this new focus.
Customer-tailored options make more sales
There have been major behavioural shifts in consumer and business behaviour. Demographics that used to be reluctant to shop online have shifted, especially for those in their forties and fifties. Another significant challenge was the need to shift from B2B to D2C without cannibalising existing client relationships. For some, like LG Electronics, that shift took place without too much trouble as sales across the board soared under lockdown. But, as another delegate pointed out, “It’ll be interesting to see what’s going to stick and what’s going to change… You have to offer the consumer the choice – the biggest challenge is going to be volatility.” That’s much more of a problem for mid-market brands. The reality is that with routes to market disrupted, retailers are going to need to evolve. While for many that may mean rapid growth and evolution to wider commerce platforms, really omnichannel business, while for others it may mean a focus on a specialist niche.
eCommerce and beyond: The Future
Overall, there are a few trends that became clear during the discussions which will also have a longer-term impact on retail overall:
- Omnichannel is finally a reality – there is still a role for physical stores but most customers want cross channel options today. Brands need to provide a seamless service across customer-driven demand in order to stay competitive. And for those using third party deliveries – think about bringing it in-house.
- Direction of travel – whether you’re direct to consumer or B2B there has been huge growth in direct sales at every level. Brands need to decide on their growth path.
- Shift away from the physical – as more people at every age get comfortable with multiple sales channels, physical spaces are now being repurposed with the growth of the social hub.
- Data analytics – sophisticated data analytics, both of customer data and internal operations, is already impacting commerce. As data analytics tools and approaches evolve to meet the needs of the industry this is likely to continue.
- Focus on the bigger picture – brands need to understand sustainability and the social contract, what their customers, employees and even shareholders want to see. Concrete action, not future pledges, is the 2021 call.
One of the biggest shifts in the overall eCommerce market has come in the understanding of levels of knowledge. A start-up with a focused and experienced eCommerce team can build a robust commerce platform and process fairly effectively and rapidly. The challenge has come for many larger businesses, where senior management may have a very different understanding of the potential for eCommerce, especially in B2B businesses. They can have a very different attitude to investment and the allocation of resources for digital commerce.
What everyone has learned is that, in the end, the customer is king. And that means commerce must provide all customers with what they want, when and how they want it, in a transparent way that speaks to those customers values. In that way, digital or eCommerce becomes a facilitator. Brands have to be ready for what comes next, the next political, environmental or health shock.
The learning from the last couple of decades in eCommerce is now underpinning transformations in businesses around the world. eCommerce isn’t an industry anymore, it has grown up and become embedded in the wider economy. Issues that affect its success are the same, from supply chain concerns to climate risk or sustainability, online retail today has become fundamental to success in business.