To innovate a business model and create better customer experiences, a retailer has to invest in digital commerce capabilities. Much has changed in the way retailers conducted their business in the past. Past innovations and digital commerce trends do offer better visibility throughout the supply chain.
However, considering the complexities of omnichannel, little emphasis was given to core elements responsible for improving the customer experience, such as fulfillment and building a relationship with customers with trust. Recent innovations in digital commerce enable a retailer to enter the next phase of selling online with artificial intelligence (AI), Internet of Things (IoT), and more capabilities at the center.
In this blog post on digital commerce, we look at five trends, such as conversational, immersive, thing (IoT), subscription, and unified.
Along the way, we will also explain the pain points which a retailer has to address before investing in such digital commerce capabilities.
Conversational Commerce Trend in Digital
Artificial intelligence and machine learning-powered conversational bots are being used for unique use cases to improve productivity, customer engagement, streamline activities, and more. As the liquid expectations continue to evolve, just embracing digital is not enough. Leaders in digital commerce need to understand that conversational commerce is here to stay.
There are four main types of conversational bots – informational, transactional, productivity, and device control. For retailers who are thinking of how to make use of conversational bots, it is essential to set realistic expectations. Retailers can use conversational bots with a company representative or as a stand-alone solution. The image above elaborates on the 3 cases using company representative, conversational bot, and conversational bot along with company representative.
Multinational Supermarket Chain and Premium Vodka Company Leveraging Conversational Commerce
Whole Foods – Jeff Jenkins, who was VP – Digital Strategy and Marketing back in 2016 at Whole Foods, launched a recipe chat-bot on Facebook messenger, enabling consumers to discover new recipes.
Absolut – Absolut launched a conversational bot on Facebook Messenger in 2016. The bot shared information on where to go for a free drink. The conversational bot showed notification on available Lyft rides back to home.
According to a press release by The Boston Consulting Group, consumer-facing brands that invest in digital technologies see an increase in revenue by 6% to 10%. As technology continues to evolve, the primary focus shifts to invest in a scalable digital commerce platform. One such area is immersive or visual commerce, which emphasizes the use of Augmented Reality (AR) and Virtual Reality (VR).
A question may arise – how can a retailer provide an extraordinary ecommerce experience? Using AR and VR with digital commerce can improve areas such as virtual merchandising and unlocks business value through the use of a new type of content and experience. To gain an edge in competition, retailers must focus on leveraging 5G and understand the benefits.
Jewelry, Luxury Fashion, and Furniture Retail Company Leveraging Immersive Commerce
Swarovski – In a news article published by Mastercard, the viewer can see the craftsmanship, learn about stories, and read descriptions behind the Atelier Swarovski home decor line.
Ralph Lauren – Ralph Lauren, the mid-segment and luxury fashion brand, unveiled interactive mirror in 2016. The immersive commerce experience is backed by a well-crafted marketing strategy, which includes sending a reminder with a link to buy other products the user might want.
IKEA – The company first launched a Virtual Reality app, followed by the Augmented Reality mobile app. Using the AR app it enables potential buyers to see how furniture product might look by placing the product virtually using the smartphone camera.
Connected devices offer convenience and lessen the effort required from the consumer’s end as such devices can place an order on behalf of consumers. Other actions are issue reporting, sending a service request, and more. According to Gartner, 5% of all digital commerce transactions will come from smart machines.
Retailers have to realize this digital opportunity and make significant changes in marketing strategy to sell to things based on context and preferences.
Two Chinese eCommerce giants using the Internet of Thing (IoT) in Retail Industry
Alibaba – The Chinese eCommerce giant partnered with Siemens to create a digital mirror to capture and broadcast important information. The company also aims to use the insights in smart cities.
JD – JD started measuring key performance metrics (KPIs) such as consumer behavior, purchase habits, and more. It partnered with Intel to innovate next-generation retail tech.
Adding subscriptions to the retail business model can enable a retailer to increase return on investment. Deloitte foretells that by the end of 2020, a fifth of adults in developed nations will have subscribed to a minimum of five services.
Ecommerce giants such as Amazon are already using the subscription feature. The subscription commerce has also given rise to a new age of startups based on the subscription box business model. Consumers can subscribe to different types of boxes depending on their needs, such as clothing, groceries, pharmaceutical, and more.
Clothing Retail Company and eCommerce Giant Leveraging Subscription Commerce
Amazon – This is perhaps the biggest brand name in the eCommerce ecosystem, which has initiated the use of subscription features on a global scale.
GAP – To boost its subscription service, GAP, launched BedtimeBox, which focuses on sleepwear for kids. According to the analysis, the subscription box has resulted in a high retention rate and low return rates.
Achieving perfection in unified commerce can be considered as retail’s next frontier after omnichannel. Leveraging unified commerce can increase revenue growth and margins in the hyper-connected world.
A retailer planning to connect the physical with digital can consider investing in a unified commerce platform as it offers several advantages, such as agility to add business value through marketing initiatives, real-time sync between data using customer journey analytics, and more.
Digital Commerce Trends are Evolving
A retailer needs to observe which technologies and changes in the business model; competitors are leveraging. From brick and mortar chain of stores, legacy retail solutions to omnichannel and unified commerce platforms, the retail ecosystem is continually evolving. A smart retailer would pivot wisely after carefully analyzing the above-mentioned digital commerce trends.