The Future of Commerce

Putting Customers at the Center of Innovation

21 January 2019
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Reading time: 5 minutes

The world we live in has become faster, more complex, less predictable. Uncertainties increase. Options multiply. Naturally, these developments lead to a shift in how people look at and act within the world. The way consumers interact with companies and brands also changes, of course. Established customer journeys change, touchpoints change. Businesses must react and adapt to this through innovation. They are well-advised to put the customer at the very centre of their efforts.

The retail sector, and generally commerce, is particularly sensitive to changes in customers’ behaviour. If companies don’t keep up, the experience they offer for their customers deteriorates rapidly. The driving force for all of this: digitalization. Especially for the retail sector, technology is the key to the changes in how people interact with companies.

So, what is changing, and what effects can be observed?

Timing becomes more important

Because everything gets relentlessly faster, customers want instant access to products and services, independently of when they look for them or where they are. Some e-commerce platforms in China and the US offer same day deliveries. So do, for instance, Steg Electronics and Brack in Switzerland. Yet, when consumers need something right now, and they are close to a physical store, they still visit the store.

As their lives become less predictable, customers also want the ability to plan availability of the requested goods and foresee delivery times. Surveys show that when making online purchases, 85% of consumers appreciate the timing flexibility it offers. There are strong indications that, at least for Switzerland, enabling people to schedule their day may actually trump simple delivery speed.

Simplicity reigns supreme

Customers don’t think in “channels”. They move between online and the physical world, different outlets of the same company, but also (e-commerce) platforms and even brands. Thus, “multi-channel” or “omni-channel” should really be the standard for every business. In fact, in over 70% of online sales, a physical store is still involved. Consumers neither act along “lifecycles” or “decision making processes”. Companies must give them a multiplicity of options for the right touchpoints at the right time. And they better be seamlessly interconnected. In other words, make it simple for them to interact with you.

Another result of this is that a business must be able to connect – smoothly and easily – with customers across all channels, including social media. For them, there is no relevant difference between, say, a hotline phone number and a Twitter handle. Customers also want to interact with a business with a multitude of devices, sometimes simultaneously. Physical experiences merge with digital ones. From virtual and augmented reality to (artificially intelligent) chatbots: The customer experience is fragmented over an increasingly large number of touchpoints and needs to be consistently coordinated in order to make interaction easy and seamless for clients. They require individually relevant content, including the right incentive or offering at the right time across their entire customer journey.

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Giving control to the consumer is the future

Customers want to pay for exactly what they consume: one song, not the album. One movie, not the 250 TV channels they never watch. A collection of articles based on their interests rather than an entire newspaper. Customers prefer subscription models and service fees – flat rates – to “product” prizes. The mega-trend of “uberization” is a symptom of the same development. We’re turning into a sharing society – which means nothing else than that consumers pay for a service or product only when they actually need it. They expect this, and they are increasingly in control, as most have access to real-time information, and they often go online to compare prices, products, and even companies.

And: no-one buys a pig in a poke anymore. Again, it’s about taking control. Businesses are heavily impacted by the “reviewification” of the decision-making process. Word-of-mouth – i.e. an assessment by a peer, someone I know – and customer reviews are all-important. Good reviews need to be earned, and again, technology paves the way for customers, whether satisfied or not, to write and access reviews and opinions.

Data analytics are the key to a customer experience with added value

What is there to do? Firstly, businesses must fully embrace change and digitalization when they innovate. Do everything you can to see things from a customer perspective. Do not outsource “innovation” or “digitalization” to a single team; propagate this view as a mindset for the entire company.

Secondly, be smart about how you use available data to shape experiences over the entire customer journey. The data are there, particularly in the commerce sector. They help you to understand your customers. A business needs to find clever ways to collect and interpret this wealth of information. It is the key to generate novel, engaging experiences by finding better – simpler – and new ways of interacting with customers. Machine learning or Artificial Intelligence Systems create and present personalized communications, experiences and offerings in the moment and place the customer really wants them. The data and the technologies enable companies to test new offerings and to develop them further, even together with their customers – putting them “in control”.

It is at the intersection of knowhow around customer experiences and the ability to analyse and understand the collected data, where progress happens.

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