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Four Ways to Drive Digital Commerce Innovation

By Jennifer Polk | July 14, 2016 | 0 Comments

digital marketing

Digital commerce exemplars don’t merely convert their product catalogues into ecommerce sites and mobile commerce applications. Leaders in commerce achieve success by disrupting the customer buying journey itself, starting with understanding that journey.

Digital commerce interactions that stand out employ four critical capabilities—automation, personalization, contextualization and innovation—to create “sticky” experiences that keep customers coming back. Sometimes the creation of a new experience requires or results in development of an entirely new digital commerce business model.

Use these four techniques to innovate your commerce experience
Use these four techniques to innovate your commerce experience

Digital Commerce Journey Automation

Digital technology can be used to deploy novel ideas, but truly successful commerce business models are nothing if not utilitarian. Consider how mobile banking applications automated steps in the buying journey, like loan applications, and led to new business models like banks that exclusively operate online. This type of automation helps customers get thing faster, cheaper or better . Another example of digital commerce journey automation is Kroger, who added online ordering and in-store pickup, thereby saving shoppers time during their weekly grocery trips. Analyze the customer journey. Identify obstacles or pain points. Use automation to alleviate barriers to purchase, making it easier for customers to buy more products and services, more often. In an industry like grocery, where most sales still occur in a physical store, this could be the beginning of a new business model that helps the organization remain relevant as consumer behaviors shift.

Proactive Personalization in Digital Commerce

Customer retention is the new acquisition. Proactive personalization involves using what you know about your customers, and in some cases your prospects, to deliver a bespoke commerce experience. Ecommerce sites, like Amazon, deliver personalized product recommendations based on past purchases and real-time site behavior. In fact, this is fast becoming table stakes. Emerging technology like machine learning and the Internet of Things enables brands to tailor the complete commerce experience, all the way through product ownership and service experience, which can improve customer retention and increase lifetime customer value. Can sensors in a car proactively alert a driver to an automotive issue, provide a list of nearby service shops based on location, ratings and reviews and schedule an appointment? If not now, certainly in the not too distant future.

Contextualized Interactions Across Online and Offline Channels

For many industries that still rely on in-person interactions to drive sales, digital commerce once posed a threat to their established business model. Now, even established brands are investing in emerging technology that allows them to modernize physical environments by connecting physical and digital channels, recognizing where customers are and using that contextual awareness to alter the experience across channels.  Take Macy’s, for instance, which recently added an in-store mode to its mobile application, effectively turning shoppers’ mobile devices into  shopping assistants capable of price-scanning and delivering real-time alerts. Another example is Starwood which uses it’s mobile application, geo-location and contextual awareness to recognize when a guest has checked in and allow the guest to use their smartwatch as a room key. These features bring the speed, ease and convenience of digital commerce into physical locations and interactions.

Digital Commerce Journey Innovation

Breakthrough business models do more than fix what’s broken, they innovate beyond the current offering. From voice-activated digital commerce supported by Amazon’s Alexa to virtual reality applications from Moosejaw, from drone delivery designed to eliminate shipping delays to image recognition enabling visual search, leaders in commerce push the boundaries by investing in bleeding edge capabilities that allow customers to browse, shop and receive products and services in new ways. And, these innovations are being adopted by both emerging and established organizations. Kraft, for instance, partners with Peapod to enable customers to move seamlessly from looking at recipes on Kraft’s site to putting ingredients in their Peapod grocery cart. Some innovations ignite a change in how customers behave (a difficult feat), sparking new business models and new entrants. Others fizzle and fade for lack of adoption. But you have to play to win.

This week’s Analyst Picks includes research that shows the intersection of digital commerce and innovation and highlights cool vendors with groundbreaking commerce capabilities. They also point out new digital commerce business models worth watching (or emulating) and helps you make the case to your CMO to invest in a specific innovative technology—IoT.  Whether you’re running an innovation lab or placing smaller bets on a few pieces of emerging technology, if you have digital commerce responsibility, aim your innovation efforts at ideas to enhance the commerce experience in order to fuel business growth and possibly fund future endeavors.

The Gartner Blog Network provides an opportunity for Gartner analysts to test ideas and move research forward. Because the content posted by Gartner analysts on this site does not undergo our standard editorial review, all comments or opinions expressed hereunder are those of the individual contributors and do not represent the views of Gartner, Inc. or its management.

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