Commerce has always been about much more than the moment of purchase in a store. Engagement, brand awareness, customer loyalty and retention are just some of the familiar elements that need to be optimised for an online business to thrive, but too often these elements have been siloed. As ecommerce continues to evolve and new retail environments form, the integration of these myriad touchpoints between business and customer has not only become possible, but essential. We are now in an age of effortless commerce, where consumer choice always follows the path of least resistance.
Commerce is no longer defined by a location or domain and is increasingly conducted by brands that are simultaneously present in the many environments that are relevant to their customers (evidenced by the rise of in-app checkouts, social media shops and increasingly commerce-enabled online media/entertainment channels).
Businesses that will be successful online will be those that make commerce effortless for customers wherever they spend their time – enabling products to be purchased instantly, wherever the consumer sees them. Businesses must win in multiple commerce channels simultaneously so that revenue opportunities are not missed. They must now compete in an age of Total Commerce.
So what is Total Commerce?
For online merchants, it means ensuring a seamless customer journey, regardless of when, where, and how the shopper interacts with your business. The physical store, far from being the focus, may not feature at all. An omnichannel approach, combining both digital and physical touchpoints, has been building for over two decades, but the COVID-19 pandemic has accelerated that trend in favour of digital shopping channels. Both US and UK retail ecommerce rose above 30% of total retail sales in 2020, achieving levels not predicted to be reached until at least 2022.
Businesses that fail to adapt face ever greater challenges, but those agile firms that can innovate are finding the dramatic change in consumer behaviour has created a world of new opportunities. McKinsey reports that over 65% of consumers anticipate they will continue their new online shopping behaviours after the pandemic. Alongside the move to greater levels of digital shopping, what some call the ‘Amazon effect’ has seen consumers increasingly expect endless choice, frictionless purchasing, price competitiveness and rapid delivery as standard.
Commerce needs to meet consumers where they are.
A wider understanding of a customer’s daily internet consumption is vital if a business is to proactively ensure it is visible at these key decision-making moments. Commerce is moving closer to consumers wherever they happen to be. Social platforms such as Facebook, Instagram and Youtube have become commerce enabled, meaning everyday media consumption can become a spark of discovery and influence. Competitors are never far away in such social commerce environments and Total Commerce requires firms to use all the tools at their disposal. For instance, Facebook can identify shoppers who have added items to an online cart without purchasing, providing an opportunity to give an email or remarketing nudge before competitors swoop in.
Direct-to-consumer on the rise.
With customer insight of central importance in the era of Total Commerce, many brands are launching direct-to-consumer propositions alongside their retail distribution network, or bypassing it altogether. For many companies the direct approach gives them greater margins, a higher degree of control over the shopper experience and greater ownership of the overall relationship with the customer. Since 2016, D2C commerce has grown at least three times faster than ecommerce as a whole as brands realise the growth potential of selling directly to their customer base.
While Marketplaces continue to grow.
The growth of D2C has coincided with an exponential rise in the number of marketplaces. Consumers are empowered with greater choice and greater price transparency, which drives traffic, increased sales and more insight through data. This insight can then be used to create yet more personalised experiences for shoppers powering a virtuous circle that is both compelling and compounding. Marketplaces now account for 50% of online sales and consumers are four times more likely to shop in a marketplace than a retailer’s website.
In the face of such change, retail giants like Walmart have already begun to reorganise their business models around this marketplace approach. Amazon, with over 200 million people visiting each month, provides brands with access to a huge, active shopping audience. And as marketplaces continue to grow and evolve, we are seeing the unbundling of the generalist platforms into an ecosystem of specialist marketplaces like Etsy and Zalando, which cater for more defined audiences or specific product categories. Businesses must refine and optimise their marketplace strategy to both their brand and their customer base. Reaching your existing audience, and engaging new ones, begins with knowing where to find them.
Among US consumers, 36% expect personalised product recommendations as they browse a brand or retailer’s website, 32% expect personalised discounts, and 26% expect personalised product categories on the website homepage, according to research from SmarterHQ. Above all, 72% of online shoppers said they would only engage with marketing messages that are customised to their interests. As new services are introduced, shopper expectations continue to evolve and race ever higher. For example, the last year has seen a 200% increase in ‘buy now, pay later’ deals as innovative payment options come to market.
Customer insights essential to maximize engagement.
A challenge for businesses is how to gain the necessary insight into customers to offer a tailored experience. Reflecting an always-on mindset, research by Google found that 84% of Americans are shopping for something at any given time in up to six different categories. Seven in 10 customers shop in micro-moments and each instance is a chance for a business to capture a sale and strengthen a relationship. Yet these moments are scattered across a wide range of channels. Business must strive to connect and engage with customers at multiple touchpoints.
Connecting operations to deliver Total Commerce and control the full spectrum of elements simultaneously are complex, and technically challenging. That includes supply chains through to delivery channels, which have been put under unprecedented strain over the past twelve months. Resilience is as important as reliability, and it’s not just the pandemic lockdowns that have presented logistical obstacles. Many of the 66% of businesses who only use Amazon fulfilment centres to ship products, will have recently encountered the friction of cross-border trade with the UK post-Brexit. Diversified supply chains are a solution to mitigate the impact of such barriers, both anticipated and unexpected.
To thrive in an age of Total Commerce and effortless consumption, businesses must turn data into insight to reach each individual customer wherever they may be, providing a personalised and seamlessly integrated experience from start to finish. Each step with the customer is an opportunity to learn or to lose. In 2021 the competition for those customers will be fiercer than ever, but those that master Total Commerce will ensure they capture every revenue opportunity.