Digital commerce leaders - the future consumer challenge
How do you create a market strategy for a generation that has only known disruption?
This is the one of the more challenging questions on the minds of commerce leaders around the world right now. Digital commerce is only growing from strength to strength as the next wave of digital native children mature into shoppers.
And with around four out of five commerce leaders (79%) believing that they’re ready to take advantage of all the opportunities this presents, their optimism is tempered by a sobering reality:
These leaders concede that more than half (54%) of their digital projects have under-performed.
To better understand this paradigm, we got the detail from these digital commerce leaders (503 of them across UK and US) on these failures in our latest survey, ‘Ready or Not? The Digital Commerce Leader’.
We discovered that commerce leaders really, really want to understand the next generation of shoppers. More than a third (34%) of them even attribute their inability to align with their existing customers’ needs as the root cause of their project failure.
Disruptive times breed big winners and countless losers. And an organisation’s ability to unravel our current retail ecosystem will greatly determine their future success – or failure.
The digital struggle is real
In order to understand the true breadth of the problem organisations face, let’s consider some figures.
Based on our survey, the average US company spent $361k (£279,433) on digital commerce projects over the last 12 months. And that’s nothing compared to the UK, spending on average £472k ($609,775).
However, despite the evident enthusiasm being shown by enterprises on both sides of the pond, the results are less comforting.
More than half (55%) of US and 54% of UK digital projects are unsuccessful.
So, if it’s not simply a spending issue, what do commerce leaders believe is behind these unfortunate results?
Pleasingly, commerce leaders were clear and concise in signalling what they thought were the main reasons for the project failure rate.
While a lack of alignment with customer needs was their most cited reason, it was followed by poor logistics to meet demand (29%), a lack of clear objectives (29%) and not enough financial investment (23%).
Furthermore, 28% of commerce leaders also felt projects progressing too quickly without a proper strategy was the biggest issue. And the same number thought the onus lay with their organisation’s failure to acquire the right digital knowledge, talent and skills to make projects succeed.
When we measured how much time organisations spend planning, it seemed to also back these rationales.
On average, US companies are planning 29.7 months ahead. UK companies are spending even less time – planning only 13.5 months into the future.
As a result, it seems that a significant percentage of organisations are launching digital projects:
- Without understanding what customers actually want or need
- Without the proper infrastructure in place to deliver against customer expectations
- Without clarity of what success looks like
- Without enough investment to deliver them
- And without the right people and expertise to ensure their delivery
This is diametrically opposed to what the tech giants are doing – they’re constantly investing in hardware, new interfaces and even looking into space commerce.
Every day that goes by, they’re extending the gap between those that’re defining the future and those that are simply reacting to it.
So, while commerce leaders may put up an optimistic front, they know they have a lot of hurdles to jump before they’re ready for the next generation of shoppers.
What makes the future of commerce so hard to fathom is the breakneck speed of change. Every day, new sales and marketing models are introduced as we rip up more of the old rule book.
This much change can lead to a sense of unease, as the market begins to feel uncontrollable, unlearnable, and as though they’re constantly trying to catch up.
At the moment, commerce leaders are divided – 19% think fast delivery will be the most important factor when it comes to appealing to the next generation of shoppers, 17% think it’s product price, 14% loyalty programmes, 13% free delivery and 11% believe it’s the brand being ordered.
However, companies need to stop guessing or being reactionary and instead begin building a foundation flexible enough to keep up with these evolving changes in demand.
A generation borne of disruption, with retail standards defined by the very best customer service we’ve ever known, has learnt to gauge retailers by the experiences they can offer.
This is why an omnichannel approach that not only engages customers at multiple touch-points, but ties theses interactions together seamlessly, proves to be so effective.
It’ll take regular CX research, mapping, and service blueprinting to ensure that they are clear about their customers’ journeys.
Gradually, they’ll begin to learn what really keeps their customers loyal and anticipate their future needs.
And by engaging with platforms and testing out social commerce strategies, commerce leaders will be able to develop a plan that’s balanced across the four key channels of commerce: marketplaces, retailers, direct to consumer and social.
But it will take a great deal of collaboration, agility and foresight for companies to truly begin to take advantage of these transformative times.
Want to explore this further?
If you’d like to discuss any of the themes raised in this article, connect with our eCommerce experts. Alternatively, for our CX services including journey mapping and service blueprint, visit our Commerce Experience Design page.
A note about our new report
This article is based on findings from our new report “Ready or Not? The Digital Commerce Leader”. Research for this report was conducted by independent research consultancy Censuswide. A total of 503 senior decision-makers (including c-suites) in digital commerce were interviewed in October 2019; 252 in the UK and 251 in the US.