The covid-19 epidemic has really changed the thinking of both businesses and consumers. Such drastic impact has never ever been experienced by millennials. And, eCommerce industry is no different. The impact can be observed post Covid-19. Given the safety concerns and social distancing, digital commerce selling has made great strides in the market share as compared to offline markets. The extent of this growth continues to mark an upward trajectory. As a result, eCommerce players now yield a positive response when it comes to accelerating the digital transformation of their eCommerce platform. It looks like an excellent strategy from a long-term perspective.
Now eCommerce players are executing digital transformation initiatives more seriously and consciously with a defined timeline. Though it is not an easy feat still eCommerce growth during the pandemic is keeping everyone excited. Organizations are keen to place greater importance on all aspects of digital commerce, including:
- Enhance integrated capabilities of eCommerce such as multichannel marketing, sales, and delivery
- Implement the right mix of channels to reach out to more targetted prospects
- Build a more user-friendly UIs for different customer touchpoints
- Improve virtual interaction with customers across channels and devices
- Integrate customer experience web analytics, and social media analytics tools
- Enhance personalization and behavior-targeting capabilities
- Automate processing using AI and ML for operational excellency
- Bring into practice end-to-end omnichannel experience across the buying journey
The first quarter of 2020, as the pandemic spread around the world, saw global trade contract by 3.5 per cent and global manufacturing output by 6 percent. This was followed by a drop of almost 18 percent in global trade in goods in May 2020 (compared with the previous May). UPU reported a 21 per cent fall in cross-border postal exchanges between 23 January and 14 May 2020 (compared with the same period in 2019), with lengthened delivery and customs clearance times. Industry-wide cargo tonnage dropped by 9.1 percent in February 2020 in seasonally adjusted terms, while world merchandise trade is predicted to fall by between 13 and 32 percent in 2020.
Post covid-19, customer expectations, and their behavior have tremendously transformed. Click and collect, contactless delivery, digital payments along with new digital channels are more and more in demand. Today, customers demand a seamless shopping experience whenever and wherever they shop. To meet this demand, eCommerce players are automating their operations with the latest technology and reinventing their capabilities to quickly build and acclimatize any new channel, tool, or process. Digital and technology are now becoming key enablers to bring more agility and robustness to the eCommerce ecosystem.
According to Mckinsey, channels and customer expectations and behaviors are shifting and eCommerce platforms are riding on technology to meet these demands.
Forty-six percent of US consumers have switched brands or retailers recently. New digital channels and e-commerce activities have surged during the pandemic, and their popularity will likely endure. For example, we observed ten years’ worth of growth in US e-commerce penetration during the first 90 days of the COVID-19 pandemic. New entrants with the best digital offers and those retailers that provide an integrated customer experience are capturing the majority of growth, putting pressure on incumbent retailers in terms of profitability and customer service.
Technology is mighty powerful and E-commerce platforms have to ride on its power if they wish to have a tight grip on customer preferences, their behavior, and purchasing trends and to design the most effective strategy based on this intelligence. For this very purpose, there are plenty of tools for betterment in search, customization, and personalization which are rapidly becoming imperative capabilities for E-commerce success.
As e-commerce will remain the center of the retail experience, the demand for digital payment solutions will also increase. Now more than ever, digital payment solutions are being adopted at the local level. As a result, this has certainly given a boost to digital payment solutions and services providers. For local consumers, local digital payment methods are addressing the needs of consumers other than just making payments for buying products and goods. E-commerce players recognize the value of offering localized experiences to consumers. And, they are transforming their platform to address consumers’ preferred payment experience. This way, they can further solidify the trust of consumers and add more loyal customers.
Jonathan Kriegel, Chief Executive Officer of DOCOMO Digital, has mentioned in Forbes that digital payments have gone mainstream.
Juniper Research forecasts that the value of global e-wallet transactions will exceed $10 trillion by 2025, up from $5.5 trillion in 2020. E-wallet providers, both original equipment manufacturers such as Apple Pay, Starbucks, Google Pay and Samsung Pay and mobile money wallets such as M-Pesa in Africa are seeing growth.
While digital and mobile wallets accounted for 44.5% of e-commerce payment transactions in 2020, buy-now-pay-later (BNPL) took just a 2.1% share, according to FT Partners Fintech Industry Research. The report predicts that that figure will double to 4.2% by 2024, even as the share of transactions funded by digital and mobile wallets will grow to 51.7% during the same period.
As more and more the population is going digital, eCommerce players are certainly building new capabilities such as omnichannel selling, AR/VR experience, more ways to pay, mobile shopping, voice search, individualized experience, and same-day delivery. But it also comes with its share of challenges such as scalability, multiple markets, culture changes, and willingness to adopt the latest technology. All in all, one thing is for sure, you cannot lag in delivering next-generation experience in digital commerce. You must start right away.
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Why eCommerce transformation?
eCommerce has transformed the way we shop. Post Covid-19, consumers’ behavior towards physical stores has changed. In 2020, retail e-commerce sales worldwide amounted to 4.28 trillion US dollars, and e-retail revenues are projected to grow to 5.4 trillion US dollars in 2022. eCommerce is now becoming the preferred choice for buying goods. Now, brands are focusing on transforming eCommerce platforms to improve operational excellence, bring in unified customer experience, and reduce delivery time.
What are the driving forces behind eCommerce transformation?
Brands are accelerating their eCommerce transformation strategy to meet and exceed rising customer expectations. What’s driving them is to implement new technologies like cloud computing and data analytics, unify online and in-store picks, click and pick, and drive customer engagement. Another critical factor is leveraging data to infuse omnichannel selling to amplify sales and boost customer loyalty.
How to set your eCommerce transformation strategy?
When brands initiate their eCommerce transformation strategy, they need first to identify and set their digital transformation goals. A brand's eCommerce strategy should comprehensively address platform strategy, channel strategy, back-end integrations, marketing technology, fulfillment strategy, and overall customer experience strategy. In addition, your eCommerce transformation strategy must include both short-term goals and long-term goals.