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Digital Commerce Transformation: Why the Time is Now

by Nortal Cloud team, June 11, 2020

  • E-commerce sales jumped 49% in April
  • Adopting a “unified commerce” concept supports growth, flexibility, and visibility in an unstable market
  • Adopt microservices-style software development patterns to provide rapid-response to customer changes and to meet the consumer where they are at
  • Using Software as a Service (SaaS) platforms helps to eliminate cost-intensive implementations of a legacy solution

Organizations are prioritizing technology that makes them more resilient and adaptable to an unpredictable future. Digital transformation centers itself around improving business processes, customer experiences, and company culture through the implementation of relevant technologies.

Digital transformation is executed to meet the needs of evolving markets and goes beyond siloed teams or projects. It’s the opportunity to take your business to the next level in terms of how you engage with your customers, using technology that streamlines processes. According to new data from Adobe’s Digital Economy Index, U.S. e-commerce sales jumped 49% in April. Established companies are moving forward with a digital transformation plan to ensure they can remain competitive now and in the future. Plus, they have to compete with technology-first companies who have disrupted entire industries such as Amazon Prime and Netflix.

The right digital transformation strategy can positively impact every customer experience with your brand. It can facilitate better decision-making and improve overall productivity and efficiency. Being that we are living in the digital era, digital transformation simply makes sense. Nonetheless, there isn’t a one-size-fits-all solution. It isn’t something that comes in a nicely-packaged box and all of a sudden, all of your business issues are solved. What’s important is to sift through the hype, and choose the digital strategy that makes the most sense for your company. Additionally, you can decide whether incremental changes will work, or if you want to revamp your business from top to bottom.

As everyone was sheltering in place and their time at home increased, many have flocked to online stores to take on home projects and wish lists that had been left undone. Despite the fact that cities looked like ghost towns, head to any Home Depot or Lowe’s, and it was like a community hangout. During the first quarter, Lowe’s same-store sales rose 11.2%. Did people spruce up their gardens and living space to survive? No, but these types of activities bring with them a sense of accomplishment, and pleasure.

At the same time, consumers are not just buying your products and services, they’re buying into the value your business provides. Digital transformation empowers companies to stand out and deliver a personalized experience. With the right tools in place, you can understand what your customers want and how you can effectively offer relevant experiences.

For retailers, this means having agility while retaining the authenticity of their roots and why customers consume their brand in the first place.

Where does unified commerce come into play?

Unified commerce is a fully integrated digital platform that offers one interface connecting to multiple business systems. It elevates, and streamlines, the omni-channel experience by connecting business systems and components. Unified commerce is one of the most important tools for effective digital transformation. Other tools can include machine learning, predictive analytics, artificial intelligence, and even chatbots.

Retailers can determine patterns in customer shopping behavior that power more personalized offerings with machine learning. Machine learning can also help a retailer become more precise in terms of offering different products and promotional items so that they are aligned with what the customer wants, and when their customer wants them. Retailers can then predict what products or brands consumers are interested in so they can handle warehouse supplies ahead of demand. How else does Amazon know exactly what their customers want after browsing their site for hours?

With artificial intelligence (AI), retailers are now able to provide a 24/7 experience with instant responses via chatbots and texts. According to Retail Touchpoint, a recent study shows nearly half (44%) of online consumers prefer using chatbots for customer service if brands get the experience right. Moreover, chatbots can be designed to upsell and cross-sell in a way that conveys the brand’s voice and desired messaging. The future of retail centers around a seamless customer experience and innovation.

How can microservices help?

Microservices are components of a business that offer functionality such as shopping carts, search, pricing, promotions, and more. Each microservice carries its own data and interacts via well-defined application programming interfaces (APIs) – which are a set of tools, protocols, and rules that defines how software components interface. You can deploy a new microservice at any time without disruption to the other microservices already in place.

Microservices are crucial for the digital transformation process since they are lightweight, making the setup and deployment faster. Each service can deploy independently, and as a result, new services can be deployed more often. Microservices are scalable, even if one microservice goes down, the rest of the application can still function. Since microservices are portable enough for almost any organization and create resilience, they can help to ensure large-scale automation thereby augmenting the digital transformation journey. Microservices also provide the ability for rapid responses to fast-shifting demands that occur at different market levels and can be disposed of after the demand dies, removing the need to maintain software that becomes technical debt.

For example, companies are creating new microservices quickly to extend their e-commerce platforms to support “ordering online, or curbside pickup, a feature that was only marginally implemented before the pandemic. According to divante, this trend of more flexible microservice solutions will continue as the crisis lessens.

Elastic Path, Nortal’s go-to partner for API-first headless commerce, gave insight into how microservices can differentiate your business.

“Many companies today are restricted by legacy solutions and aging technologies. It makes it hard to react to market trends and changes.

To stand out, businesses need an agile platform to innovate quickly, and test and experiment with different forms of customer engagement. Cloud-native microservices provide you the flexibility and scalability to grow your business with confidence and quickly respond to changing requirements.” 

– Andrej Maihorn, Vice President of Industry Solutions at Elastic Path 

What about SaaS and cloud migration?

Many retailers have already shifted many of their workloads to the cloud for complete scalability. Additionally, they are using Software as a Service (SaaS) platforms to eliminate cost-intensive implementations of a legacy solution. Retailers can also scale their applications in a way that meets their budgets. It makes sense for companies who don’t have the available resources to house and manage complex software applications. Paying for what you use, SaaS can reduce the overall impact of OpEx and CapEx expenditures. In terms of unified commerce, you can add new functionalities as needed.

With the current state of business, SaaS is an alternative that many enterprises are embracing to support new channels, providing team members access to data when they need it, on the go, while delivering new features and business value daily. Plus, you can scale your business easily during spikes in business, such as holidays promotions or new product launches. You can also build a global presence without having to open up new offices. With that said, SaaS e-commerce storefronts should only be one part of your solution. Physical stores need to connect to the rest of the e-commerce suites to provide customers a 360 degree experience including inventory, order, shipping, and many other critical data services.

Leveraging data to stay agile  

Data powers decision-making but the customer experience brings in revenue. Retailers have to remain agile to meet customers’ changing needs, and the shifting demands on their businesses, such as the increase or decrease of product demand from the COVID-19 pandemic. How can you maintain flexibility in a world of unknowns? How can you understand your customer’s preferences on whether they want contactless payment, contactless delivery, ship to home, or prefer to pick-up in store?

Another aspect is understanding why a customer visits your website, what are they interested in, and making the right recommendations. As you can see, data is crucial.

There isn’t any company who could have adequately prepared for a disruption of this magnitude, but ensuring business continuity in a nebulous time is the biggest priority. Now, it’s up to retail leaders to forge ahead in what will be the new normal. Yet, one thing is sure: The ability to use data to respond quickly, address unforeseen issues, and to recover requires the right tools.

Get ahead of the curve

Life after the pandemic will not be the same. An emphasis on health and safety will continue to dominate. Economies have shrunk, spending styles have changed, as well as shopping habits. The future of retail will see skyrocketing online interactions and digital purchases as customers want to maintain their social distancing protocols.

Subscription service companies like Butcherbox, HelloFresh, Chewy.com, and Home Chef who deliver to your doorstep are experiencing tremendous growth while many retailers rush to innovate. The rest of the world is already adopting a more robust digital transformation process, so stay up to date with industry trends to keep pace.

Retail recovery is dependent on making profits, and right now, the digital experience is the dominant channel. Now is the time to connect the data dots, establish pandemic business continuity plans, fortify your supply chains, and enable remote employees. Retailers will need to overcome challenges in supply chain and inventory to meet these new demands.

Retailers who have undergone, or plan on improving their digital experience and presence will have the best opportunity to thrive. Many well-known retailers have filed for bankruptcy and struggled to stay current with market and consumer trends only to be exposed by the pandemic, including J. Crew. Implementing the right digital transformation strategy will encourage customers to remain loyal to your brand with an improved user experience. Data can be used for further innovation and more personalized online experiences.

Implementing change will require some risk-taking and leadership buy-in. It is necessary to succeed in uncertain times. If you are interested in reading more about creating a unified commerce strategy check out our previous blog.

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