The story of ‘Digital India’ has been in the making for a few years now. This, largely on the back of the mobile revolution through the last decade, and the democratization of mobile internet since 2017.
According to a recent Kantar report, India had an estimated 622 million active internet users. Of these, 45 percent conducted online transactions, and 28 percent shopped online. These absolute numbers make India among the largest markets and a hotspot for digital commerce. But the year 2020 had more in store.
As the COVID-19 pandemic took over the world, life as we knew it has changed. A combination of curtailed physical movement and behavioral shifts thrust us well and truly into a digital-first orbit. This point is evidenced by the findings of a recent BCG report which revealed that 54 percent of consumers switched from in-store to online shopping because of the pandemic. The pace and scale of change have disrupted businesses across the board - from consumer-packaged goods to groceries, and from financial services to healthcare. What does this mean for the digital commerce strategy of these enterprises and what does the future hold?
Digital Commerce has Moved from Transactions to Experience
The evolution of digital commerce can be understood in two phases. In the pre-COVID age, digital commerce was about traditional retailers offering an online storefront, and consumer interest was largely restricted to low-involvement categories. However, as the pandemic took effect, consumers turned to the internet for all their needs through the entire purchase journey - from awareness and discovery to price comparison and the transaction takes place online across all categories of products.
Businesses now need to deliver an end-to-end user experience across all customer touch-points - be it on their website or mobile apps, and at the top of the funnel as well as after-sales service and customer care. For retailers, this has brought to focus aspects that were earlier peripheral. As a result, we are seeing an increased rethinking of the entire customer experience layer from UX to hyper-personalization with the democratization of information and data across all touch-points. In a hypercompetitive marketplace like today’s, the ability of companies to deliver a superior experience must form the core of digital commerce strategy.
Knowing Your Customer Can Tell You What They Want
Understanding what the customers want has been a conundrum for sellers ever since commerce and trade first began. It is a concept around which businesses pivot, and which informs their overall strategy as well as operational aspects such as procurement and production. However, in a post-pandemic age, the situation is further exacerbated by changing consumer tastes, preferences, reprioritization of buying decisions, and constantly shifting loyalties. And of course, there is the uberization of the marketplace where customers expect to be served when, where, and how they define has led to a spike in demand for hyper-personalization.
The key to addressing this conundrum is data, and fortunately, a digital-first landscape lends itself well to gathering data. With advances in data visualization and analytics, brands can now map their customers’ past interactions and track their online engagements to understand what they are looking for. However, in an era of heightened personal privacy, data security, and regulation, this can be a double-edged sword. So, as brands integrate data-driven decision-making into their digital commerce strategy, it is imperative to do it through the lens of prevalent data privacy laws and best practices.
Let Business Objectives Inform Your Digital Commerce Strategy
Digital commerce is a broad topic by itself with multiple moving parts. Add to it market uncertainty and competition, and we are left with a complex landscape. As businesses chart the way forward in a new normal, one way to navigate the situation is by defining their digital commerce objective. Understanding the desired outcomes provides clarity and helps enterprises prioritize their investments.
For instance, if the objective is to increase the top line, the strategy would center around increasing the GMV. This would inform the creation of the top funnel as well as ensure an effective performance-oriented marketing function that converts digital advertising dollars into revenues. On the other hand, if the objective is to increase net promoter score (NPS), the digital commerce strategy needs to relook at customer experience across the entire value chain.
From a tactical perspective, this would mean delivering a superior engagement across all customer touch-points to reduce friction and to gain valuable insights for course correction.
For a market poised to be home to over 900 million active internet users by 2025, digital commerce is no longer optional for brands. Neither is it sufficient to have a faux storefront that is an online version of a brick-and-mortar store, enterprises must invest in a robust digital commerce strategy. The success or failure of a digital commerce strategy could very well decide the survival or extinction of consumer-facing companies.