Digital Commerce 3.0: Moving from Conversation to Collaboration
There are seismic shifts in our digital commerce ecosystem. They require a new way of thinking about retail, technology and people – and we believe it’s time for transformational, not transactional change.
Digital commerce – especially in high-involvement, considered purchases – requires harmonious, high-touch experiences that are collaborative, rich exchanges between knowledgeable company representatives and consumers.
Our goal as a technology company is to free businesses from failing paradigms including the current “race to the bottom,” a losing game where business outcomes are too often dependent on the randomness of an engaging salesperson swooping in to help customers make considered purchases.
Today’s Digital Commerce Ecosystem: a Race to the Bottom
We last talked about the “Amazon Effect” and how it has transformed consumer shopping and buying habits from experience-driven consumption to one centered around convenience and efficiency. And the Effect is only getting exacerbated as Amazon continues to dominate market share – they currently account for 43% of US online retail sales.
Add to the Amazon Effect the reality of dwindling profit margins, intense customer acquisition costs, the duopoly of Facebook and Google dominating advertising, the costs associated with fulfilling orders, shipping and high volume product returns… and things might seem dim for retailers in today’s digital commerce ecosystem.
Focused Failure: Technology-led Commerce
How did we get here? We’ve been so focused on technology that we’ve forgotten about our people.
As I detailed in my previous post, ‘Digital 1.0’ began with retailers initial move to ecommerce and social selling. After learning that ecommerce transactions were fundamentally profit proof, retailers tried to offset their low-profit online channel investments by investing in the assets they already owned – their physical stores.
The market has tagged today’s omnichannel-emphasized era as ‘Digital 2.0.’ Billions of dollars later, and shoppers were largely apathetic toward novel in-store technologies.
But the gloom and doom of Digital 2.0 can be short lived, as we see a light at the end of the tunnel for businesses.
ERPs, in-store beacons, geofencing, apps – these assets are still critical contributors to the digital commerce ecosystem we all operate in. They are key systems that logistically connect channels and establish a business’s digital footprint. And we can utilize these systems to also connect people.
Goldman Sachs analyst Matthew Fassler, reverberated the same sentiments by stating, “Retail is not dead; it is changing. How brick-and-mortar stores employee new technologies and new models may determine how they survive the relentless shift online.”
A Vision for Success: Adding People Back to the Equation
We believe that the next digital commerce shift will facilitate a framework for thriving businesses by building shopper loyalty and retention through the marriage of technology and people.
We refer to this shift as ‘Digital 3.0,’ and it will leverage the omnichannel technology investments from Digital 2.0 to empower people to better serve businesses’ most profitable relationships: those between a brand and its most loyal shoppers.
We believe the best way to accomplish this is by arming company spokespeople with shopper intelligence to better connect and collaborate with them, forging loyalty both in-store and online. Leveraging the powerful business intelligence gained from ‘Digital 2.0’ systems will elevate the way in which shoppers interact with a brand’s products and people, increasing satisfaction, loyalty, and profitability.
Collaborative Commerce: AI & People Working Together
Artificial Intelligence (AI) and bots are all the rage in digital commerce (and business in general) as we all race to embrace ‘digital transformation.’
For most transactions along a consumer decision journey, AI alone can be enough – a McKinsey article estimates that 53% of retail activities are automatable, depending on the sector, precisely because they are low-involvement, short consideration purchases.
Amazon has nailed these types of purchases that fulfill our basic needs and pose low risks. Because shoppers are likely to purchase these items based on price, shipping, and convenience, AI alone can assist in refining, and fine-tuning these decisions based on the shoppers’ history and behavioral patterns. (That’s exactly what our Cognitive Commerce Engine excels at capturing and reporting for millions of shoppers.)
Contrarians will say that AI is accountable for degrading the shopper experience because of how it systematically solves problems, resulting in mundane and predictable outcomes. We agree that AI can lead to predictable outcomes – because that’s exactly what it’s designed to do.
But – as our customers have proven – it doesn’t necessarily degrade the shopper experience. It puts buyer behavior at the heart of its system to provide every individual with finely structured and intelligent, contextual experiences. The data-based benefits of AI alone can greatly improve the convenience and efficiency of shopping and buying experiences – especially for low-involvement purchases.
If human collaboration were integrated into many low-involvement purchasing scenarios, it could unnecessarily complicate or slow a decision process that can be fulfilled by AI predictability.
However, as a CNBC article states, “There has been so much talk of robots replacing workers, but human interaction – especially for the physical retail experience – still holds value”
Today’s AI fails shoppers when it seeks to respond to complex questions that require human feedback and in high-involvement purchases where collaborative commerce becomes essential. We define collaborative commerce as people and omnichannel technologies centered around the customer, or Digital Commerce 3.0.
High-involvement purchases are complex, emotional, or expensive purchases that pose a high risk to businesses and buyers if they fail. Because these purchases often require the knowledge of an industry expert, shoppers are likely to want to rely on smart associates for help and seek out information before purchasing. Examples include luxury apparel, automotive, insurance, home goods, and more.
For high-involvement purchases, people must be brought into the equation – along with technology – to elevate the shopping experience. Consumers often need inspirational, intuitive and creative suggestions that can only be gained from knowledgeable and informed salespeople who are able to recognize the nuances of an individual’s needs and personality and give meaningful feedback accordingly.
The desire for collaboration is even more pronounced when we look at highly active shoppers who are often more brand loyal, frequently purchase both in-store and online, and are likely more emotionally involved in specific product categories while having the highest service expectations.
This is the brand loyal cohort that every business seeks. We must serve them with a level of personalization and professionalism that goes far beyond standard expectations and in doing so to ensure your brand is considered first and your share of wallet maximized.
It’s in the consideration and deliberation of high-involvement purchases where the process, not the product, need to be changed to capture shoppers’ loyalty.
A collaborative commerce process takes shopper signals and purchase history to inform sales recommendations, improving customer experience, driving loyalty, repeat purchases, satisfaction and business results.
Building Digital Commerce Competence Collaboratively
People simply aren’t connected effectively with the right technology to allow them to collaborate intelligently. Yet.
We are all operating in a digital commerce ecosystem, whether we actively take advantage of it or not. Most – if not all – of the buyer activities that lead to an in-person interaction are tracked digitally on omnichannel technologies that businesses have worked so hard to improve in ‘Digital 2.0.’
Shoppers often begin their journey online, leveraging user-centric, AI-powered technology that tracks their behavior and personalizes their results, only to come into a store and be served by a salesperson who is generally unaware of the shopper’s identity and the context they are operating in. And we have the technology to fix that.
Salespeople often lack understanding of how to move the shopper along in their journey because they don’t have a complete picture of the buyer – the digital signals and purchase history that we track and use, online and off. And without any executable, customer-specific knowledge, the retail sales floor is too often filled with low-wage positions that spend “down” time stocking shelves and folding clothes.
Imagine: a Future for Digital Commerce
In ‘Digital 3.0’ we will have a world where advocacy activities are informed by data from omnichannel technology. A world where brand representatives, too, will have a complete, customer-centric view of products, purchases and signals.
We believe sales should have the necessary tools – and training – to be transported into the digital world. The result will generate opportunities to connect with buyers and build more engaging and sustainable relationships that are facilitated by technology as a means, not an end.
These enablement tools exist today. We have developed an accessible use-case for this partnership where – by putting tablets in the hands of in-store salespeople, and giving them access to unique shopper profiles and detailed shopper history and preferences – salespeople are able to guide shoppers to products that are aligned with their needs, their history, and inspiring them with suggestions based on empathetic, knowledgeable understanding.
Turning Shoppers into Clients
And instead of spending non-customer-facing time tidying up the floor and restocking inventory, these empowered salespeople have the power and processes at their fingertips for digital follow-up, sustaining customer relationships and forging the loyalty of high-value clients even more.
Whether it’s updating a client on the arrival of a new shirt that is aligned with her preferences; curating new product line extensions based on a business’ buying behavior; or simply following-up with a client to fulfill a routine purchase – the empowered salesperson can confidently add their intuitive, personal feedback – with the aid of AI – into the digital commerce experience.
Your teams are now enabled to truly understand customer-centric, omnichannel behavior and generate more relevant recommendations and results. They can be a part of the digital experience and that is Collaborative Commerce.
We are actively deploying this fully collaborative, engaged, and channel-agnostic interaction between people and technology within our client base in our Collaborative Commerce Platform.
The outcome will not only help drive customer loyalty and increase your most valuable customers’ satisfaction levels and completely alter the unit economics of retail by empowering salespeople to build strong relationships and revenue streams.
Interested? Join us in revolutionizing Commerce 3.0! Connect with us now.