Digitalization still presents companies with increasingly greater technological challenges. Simultaneously, technology-driven approaches open up unimagined opportunities for companies in all sectors. Only companies that recognize the potential on time and adapt their technical infrastructure will be prepared for the future; decisions will be based primarily on data about customers, competitors, trends, and the company itself.
Along with the pandemic came changes affecting many online shop operators. Businesses were forced to optimize their digital offer to remain competitive. Meanwhile, it is becoming increasingly clear that you cannot manage e-commerce passively. Instead, consider it a relevant turnover booster that can make a huge difference. Standard solutions are no longer effective; companies must take e-commerce seriously if they want to generate more online sales.
Over the past two years, customers have been forced to buy more goods and services online. While brick-and-mortar shops remained closed, online retailers enjoyed unanticipated growth. E-commerce has become an integral part of retail that can no longer be ignored and will remain so after the pandemic.
However, not all e-commerce is the same. If you want to remain relevant in the future, you should focus on the adaptability and flexibility of the technologies you use. Headless solutions are particularly advantageous because you can expand and adapt them quickly and easily. With headless, you will be ready for the trends that we will discuss in detail below.
Trend #1: Unified Customer Experience
Besides devices such as smartphones, tablets, PCs/laptops, Smartwatches, and Smart TVs, online platforms such as self-hosted online shops (on-premise or cloud-hosted), Social Commerce, and Mobile Commerce will play a central role in the Unified Customer Experience.
The goal is to offer the customer a consistent experience across all these touchpoints. To achieve this goal, you should combine consumers' expectations and needs with the brand and the company's content in a data-driven manner.
To meet the needs of online customers, individual consultation is essential. Customers should feel particularly well taken care of online, but without recognizing the use of technology. To optimize the customer experience, you can use both simple Chatbots and fully-automated AI-based interactions with a transition to the personal advisor. Advisory solutions such as Cognigy are the norm in online shops, and customers regard them as a standard service.
Trend #2: Customer Data Platform
Another approach to optimizing the shopping experience is using customer data platforms (CDP). They combine information about customers and their buying behavior from various sources in a centralized database. Business users can access this data quickly and easily. CDPs are comparable to DAMs (Digital Asset Management) and PIMs (Product Information Management): they centrally manage specific data categories and ensure that employees and customers receive the latest versions of the respective data.
However, many companies are still using isolated solutions that are inadequately linked with each other. As a result, they are prone to errors and frequently do not evaluate data correctly. They are also time-consuming to maintain, making it difficult to comply with regulations such as the GDPR. Yet, it has never been more important to collect, store and manage personal data in a legally compliant manner than it is today. This data should be collected alongside other information about customers and their purchasing behavior, and used as a "single point of truth." Therefore, consent management should be an essential component and prerequisite of customer data platforms.
Trend #3: Direct2Consumer
Direct to the customer without detours - this approach promises companies a more flexible and customized analysis of the customer needs. If you want to sell directly to end customers online without wholesalers or sales representatives, you have to re-think the customer approach, delivery, and storage processes. Larger quantities are no longer purchased, but individual products are shipped, and these are also adapted to the customer's requirements as much as possible. Generally, this will mean a reorganization of the entire marketing and sales process.
One example of the optimal use of Direct2Consumer is the approach taken by Glossier Cosmetic Company. The focus, on one hand, is on individualized products (for example, make-up adapted to complexion), and on the other hand, is on strong customer orientation and customer satisfaction.
With Direct2Consumer several unique advantages will emerge:
When a manufacturer sells directly to the end consumer, without agents and wholesalers, they can achieve better prices for the customer. Furthermore, they can optimally adjust product margins. By optimizing the price the producing company gains more control over the market and buying behavior.
A further advantage is a direct communication line to the customer. General online surveys and individual surveys provide more knowledge about the customer's needs and buying behavior. This information leads to a significant competitive advantage.
Direct communication makes it easy to test new products and introduce them to the target market. The more information available, the easier it is to personalize the products and adapt them to the customer requirements.
Trend #4: Customer Centricity
Another upcoming trend is Customer Centricity. It is a holistic corporate philosophy instead of a simple strategy. The focus is entirely on the customers' needs, not the product or the price. This approach requires the entire company - from top management to warehouse staff - to have a unified view of the customer. The saying "the customer is king" is once again gaining importance. Here, using data that has been collected in compliance with data protection regulations plays an important role. The more you work with this data, the more likely this will lead to an enormous competitive advantage.
Based on customer data, their purchasing behavior, and a holistic customer-oriented approach, products can be produced in a highly customized manner. Concepts such as IoT or Industry 4.0 make this possible, as they can reduce batch sizes to a single piece. As a result, customer wishes can be fed directly into the production process. The prerequisite, however, is a precise and regular market analysis and the appropriate segmentation. When you manufacture and sell personalized products, the return rate for online orders goes down while margins and profits go up.
The company ADIDAS is an impressive example. Until recently, it was unthinkable to personalize shoes according to customer specifications, but now customers of the sporting goods manufacturer can expect their personalized sneakers to be shipped within 24 hours. Using artificial intelligence, they could reduce production and supply times from an average of 18 months to the bare minimum.
Customer Centricity changes how you as a business tell the customer your story. With your websites, social media presence, and direct contact, you can awaken emotions in the customer through skillful storytelling. In addition, you can provide deep insights into your business practices, and the customer gets the feeling of being part of your company. You can ideally market topical subjects such as ethical and ecological production because consumers are increasingly insisting on the sustainability of products. A recent survey by Statista found that around 40 percent of Germans already feel companies should be held responsible for solving environmental problems. Corporate social responsibility requires sustainable product design, energy efficiency, and respectful treatment of employees, and transparent storytelling allows you to communicate these values to your customers.
Most companies are presumably aware of some of the trends we have just described. However, it remains clear that implementation is not particularly easy. Especially with topics such as Customer Centricity or Unified Customer Experience, aspects such as rapid data management and adapting the corporate philosophy will play an essential role. Nevertheless, companies need to consider and address the above trends, especially in the current global situation. Furthermore, collecting data about customers, competitors, and your own company (while respecting data protection, fair competition, and privacy regulations) is essential to informing better decisions in the digital area and retaining relevance as a provider.
With the right tech stack, you can create the base needed to take all these trends into account. At P8 Marketing, we recommend solutions that are based on microservices, an API-First-approach, and have a modular structure. These solutions enable companies to respond quickly and easily to new trends and as a result, they are promising upgrades for any online business.