For better or worse, I’m what’s colloquially known as an elder millennial. I’m not part of the oft derided group that grew up staring at screens. I’m the part of the generation that came just before. My coming of age straddled the cusp of technology’s proliferation to the extent that we experienced the before and after effects rather uniquely.
For example, before college, I had computer classes, but not computers in class. And when students started to use laptops as their personal computers in college, many educators resisted their use in the classroom due to uncertainty about how this emerging technology fit into the existing experience.
Determining guiding principles such as recommendations, resources, and roadmaps should have been the responsibility of the institution, yet all too often individual teachers were left to fend for themselves. But, once more cohesive strategies finally emerged, the collegiate experience evolved quickly. The inclusion of technology shifted the use from supplemental resource to a requirement for homework, classroom activities, and even exams. By the time I graduated, some courses were held entirely online. What was once a siloed, variable mess, matured into something intentionally integrated and consistent, allowing students, educators, and institutions to benefit.
This is one example of this shift, but it isn’t unique in the modern human experience. The continuous push to integrate technology holistically over the last few decades has helped mitigate the impact of unpredictable disruption, such as the current health crisis. This pull—or the abrupt shift to new instruction models—has been far less disruptive than it could have been had the necessary tools not already existed and been implemented. It’s more evident than ever that every type of organization must adopt new strategies as quickly as possible to continue to deliver consistent value to their stakeholders.
The Evolution of Digital Commerce
Digital commerce implementations have been on a similar three-decade long arc—some piecemeal, some strategic. While B2C organizations have dominated digital commerce growth and learned to develop it as a primary revenue generating channel, B2B organizations have been akin to the educators who were uncertain about how it fit into their existing experience.
Without a unified vision for an enterprise-wide strategy, many B2B companies have generally tinkered around the edges of their digital experience without fully addressing their underlying challenges. The result is that their customers—B2B buyers—are increasingly frustrated with friction they view as unnecessary in the purchasing experience. They crave the familiarity and buyer-centric usability they are used to as consumers. This is forcing B2B organizations to adopt digital transformation quickly despite any entrenched complexity that makes it difficult to sell digitally. Looking forward, as B2B organizations catch up to their B2C counterparts, capabilities, maturity, and even customers for both business models will begin to converge.
As part of our series on The Path to CX Excellence, we’re digging into each of the pillars of modern CX to examine how businesses that push to integrate technology more holistically across the customer experience are more prepared to adapt to unpredictability that would otherwise catch them on their heels.
We’ve covered B2B Marketing, B2C Marketing, Sales, Service and Field Service. In this blog, we’ll lay out the Path to Commerce Excellence as it applies to any business model, whether B2C, B2B, or B2B2C.
#1 Foundational Commerce is the most important stage to ensure sustainable future success. While short-term fixes may address immediate needs, intentionally or not, those once quick fixes frequently become deeply embedded over time. The long-term result is a complex, cobbled-together legacy technology stack that hinder a business’ ability to adapt to change in real time.
Just as a unified approach to technology has supported the successes of modern higher education, companies must similarly move beyond siloed, use-case-specific solutions. Otherwise, the cost to customers is similar to that of the student experience mentioned—inconsistent, disconnected, and often unpleasant. The difference is that customers can go elsewhere easily.
Many companies face an internal struggle that leaves them unable or unwilling to change. This stalemate is most clearly represented by the fact that 70% of CIOs want to keep existing solutions in place as long as possible, but 75% of C-suite executives understand the dire consequences of failing to update their technology. But without the appropriate foundation, the ability to adapt and keep pace with competitors is limited, and the cost of future changes will only increase.
As the most interconnected element of the customer experience, addressing commerce technology may sound daunting, but the solution doesn’t need to be. Companies need two key elements to build the foundation that will enable future success:
#2 Transactional Commerce shifts from technology capabilities to generating revenues from a new digital channel. At this stage, companies must strive to build trust and minimize friction in the customer experience to improve conversion rates and decrease customer acquisition costs (CAC).
For a customer, efficiency starts from the moment their search begins helps determine whether or not customers can find your products. Once they land on your site, how do they move around? How do they find similar or complimentary products, or even different categories altogether? Robust search and navigation tools and product recommendations are critical capabilities for success.
For complex products with variable selections like size, colors, or materials, customers should be guided through an intuitive flow to make those selections easily. Inventory should clearly indicate product availability and out-of-stocks to the customer, so they don’t make purchases that can’t be fulfilled.
Friction is the enemy of conversion, so companies must root it out everywhere. A/B testing helps identify where customers fall off in the process and provides valuable insight to address it. Some customers get all the way to the end of an experience with a full shopping cart and then click away, making reengagement strategies vitally important. When 70% of carts are abandoned before a purchase is completed, a lot of investment is wasted if left unaddressed.
Companies that view every click as an opportunity to gain or lose a customer will be better prepared to create value and build loyalty with each customer. As the transactional stage becomes more operationalized, companies can start optimizing their investments.
#3 Optimized Commerce is where digital channels start to pay dividends. The site experience gets continuously better, and all the pieces align to move faster. But, the work isn’t over. When optimizing, companies are doing more with their existing investments to provide enhanced capabilities and expand into new markets and product categories, reaching more customers as a result.
It’s important to note that any point solutions still being utilized are likely providing diminishing returns as a result of siloed data. Many companies that successfully navigate the first two stages with point solutions may suddenly find their growth limited. Optimization can only be achieved with fully integrated data across the front and back office applications, which enables companies to build more personalized experiences around the customer.
For successful optimization, companies must evolve digital commerce beyond single transactions to a complete resource where customers come to research, purchase, subscribe, and manage their orders and accounts. This is how they build lasting mutual relationships that create more value for their customers and capture the returns as revenue.
In the optimization stage, the scalability and agility of the foundational architecture becomes an undeniable competitive advantage as companies can launch new brand or country sites with ease using existing resources. Additionally, with a vast trove of connected customer and purchasing data, companies can identify other products and categories that may fulfill unmet customer needs.
If the foundational stage is building the right machine, the transactional stage is putting it to work, and the optimization stage is getting the most value from those resources. As that value climbs, the door opens to innovation.
#4 Innovative Commerce is when companies shift from standard value creation to highly differentiated customer experiences to tap into new growth opportunities and business models. Market leaders and disruptive trend setters are positioned to grab greater market share as 60% of those under 40 are more likely to buy from companies that invest in unique experiences.
By its nature, innovative commerce is far less defined than previous stages, instead allowing for experimentation to surface new opportunities. Key KPIs at this level should be around the customer – recurring relationships, interconnected personalization that extends across the lifecycle, and commerce experiences on emerging channels.
Like the education example at the top, innovation is where companies push the boundaries of their existing dynamic. By taking a proactive approach to identify how customer expectations are evolving, these companies spend far less time trying to catch up when it matters most.
Making the Path Your Own
At Oracle, we know that the Path to Commerce Excellence isn’t linear. Many of our customers experience different levels of success and maturity at each stage of this path all at the same time. But we use this progression as a framework to help our customers understand how to look at the opportunities ahead of them and what to prioritize.
There’s never been a better time to ensure that your company is prepared to quickly adapt to the evolving ways that goods and services are bought and sold.
Click here to find out more about how Oracle can help you leverage digital commerce to your advantage.