4 minute read 9 Nov 2022
woman using a digital tablet and credit card on sofa at home

Prioritize commerce transformation to drive long-term gains

Authors
Warren Tomlin

Partner, Digital and Innovation, Ernst & Young LLP

Digital leader. Innovative thinker. Culture builder.

Brian Peterson

Associate Partner, Consumer Industries, EY Canada LP

Innovative thinker. Transformational consultant.

Annie Murphy

Partner, Consulting, Ernst & Young LLP

Strategist. Storyteller. Skeptical of the status quo.

4 minute read 9 Nov 2022

Keeping pace with evolving customer expectations requires retailers to re-evaluate e-commerce strategies with tomorrow in mind.

In brief
  • Stand-out e-commerce experiences are table stakes in today’s fast-changing consumer world.
  • Fueling commerce transformations with a strategic mix of insight and SaaS capability can help set retailers apart.
  • Striking that balance empowers retailers to meet consumer demands today, while building in enough flexibility to continuously adapt. 

By the end of 2022, e-commerce is projected to represent 20% of all retail sales on the planet — an increase of 10% from five years ago. But it is not only the volume of online purchases that has changed. Consumers have also become increasingly more nuanced in their buying behaviors. 

Why is now the time for a commerce transformation? 

Online shoppers now expect more from brands as they engage with them online. People are embracing social selling, learning about products and then making purchases at the point of influence (for example, when an item pops up in their social feed). Functionality like this will only continue to be more impactful as platforms develop and evolve over time. 

To compete effectively for wallet share and consumer loyalty, retailers need to remain one step ahead of the ways consumers want to learn, engage and buy online. While baseline digital capabilities have gotten many retailers this far, yesterday’s platforms are not likely to keep consumers engaged today. 

Retailers need robust, reliable and effective digital channels to deliver noteworthy commerce experiences capable of fostering lasting consumer relationships. Getting there will require many retailers to plan and execute focused commerce-transformation programs.

How can retailers successfully transform commerce today?

E-commerce is nothing new. What has changed is the degree of sophistication that the consumers have come to expect from the online shopping channels that they use. This means it is increasingly important for retailers to strike the right mix of platforms and partnerships in their commerce-transformation approach. Doing so can create agility and enhance ecosystems, in line with new customer preferences and behaviors. 

What makes a good commerce transformation great? Building your program around these three key actions can be a meaningful step in the right direction:

  1. Realize cost efficiencies: Leveraging the right commerce technology platforms can help free up capital to reinvest in other areas of the business. This enables retailers with the flexibility, scalability, and security to redeploy dollars and resources to other priorities. 
  2. Build communities of value: Customer insights fuel customer innovation. But stronger data regulation and increasing consumer pressure have effectively limited the way consumer data is tracked and used. Many apps and browsers now offer consumers the option of blocking third-party tracking themselves, while search engine giants have announced that they will eliminate third-party cookies as soon as next year. So, first-party data is now increasingly important to the future success of retail brands. The associated intel will represent a critical community of data and value that can be channelled into personalized customer experiences and greater satisfaction. In turn, this can translate into loyalty and retention. By working across retailers and brands, commerce platforms, such as Shopify, offer businesses a broader data set than they could otherwise access on their own. Leading commerce platforms also empower retailers with the ability to unify in-store and online sales data, offering a clearer picture of customer behavior — all while fuelling primary functions, such as easy payment, omnichannel commerce or simple-and-speedy order processing. 
  3. Transact at the point of influence: Friction holds brands back. Social selling reduces friction points in the customer journey by offering customers the ability to transact and make purchases without leaving the social media platform where they discovered the product. Beginning with Facebook and now commonplace across every major social media platform, social selling offers retailers and brands the chance to connect with customers where buying intent is at its peak, reducing steps to checkout. Additionally, social selling is expected to triple by 2025. By implementing a commerce platform with deep social integrations now, retailers can jump on that trend, providing more consistent customer experiences that reduce pain points, foster relationships and increase sales conversion. Doing so also allows retailers to target potential buyers, expand online presence and “listen first-sell later” by using built-in or third-party tools.  

What is the bottom line on e-commerce transformation? 

Retailers have no time to waste. Increasingly sophisticated customer and market demands require a thoughtful cross commerce approach today. Prioritizing stand-alone commerce transformation with the right platforms and solutions can empower retailers to deliver best on customer expectations — no matter what comes next.

Summary

Increasing customer and market demands require a thoughtful e-commerce approach. Prioritizing stand-alone commerce transformation can empower retailers.

About this article

Authors
Warren Tomlin

Partner, Digital and Innovation, Ernst & Young LLP

Digital leader. Innovative thinker. Culture builder.

Brian Peterson

Associate Partner, Consumer Industries, EY Canada LP

Innovative thinker. Transformational consultant.

Annie Murphy

Partner, Consulting, Ernst & Young LLP

Strategist. Storyteller. Skeptical of the status quo.