The Future of eCommerce

Jeroen van den Nieuwenhof leads the Marketing & Commerce practice of Deloitte Digital since 2018. Deloitte Digital’s Marketing & Commerce practice creates modern human-centric experiences from vision to execution. “Our mission as a practice is to connect with our clients and help them innovate, at the right pace, with a focus on the customer,” Jeroen says. Sudev Nath leads the eCommerce practice in the Netherlands since 2020 and has close to two decades of experience in digital transformation and eCommerce. “eCommerce has taken center stage across industries, but there is still an outstanding imperative to organize the right capabilities and customer experience to ensure profitable success“, Sudev says.

The current state of eCommerce: experience is everywhere

In 2021, B2C eCommerce revenue in the Netherlands crossed the 30 billion euros mark. To put that in perspective, that number is close to half the GDP of Luxembourg, even without considering B2B eCommerce. “There is a proliferation of digital touchpoints and eCommerce models”, Sudev explains. “From new social channels, AR, voice assistants, and Metaverse to marketplaces. Organizing your capabilities to experiment across evolving touchpoints requires time, attention and deliberate investment. Some new touchpoints are transient hypes, others can redefine the way you do business in the near future. Influencer marketing and live commerce, for example, are now key for activation and conversion in sectors like fashion, travel, and lifestyle.”
“Customers are also asking for greater transparency across the eCommerce value chain”, Sudev notes. From packaging to supply chain, there is a greater need for brands to be sustainable and bring together the ecosystem to achieve this goal. Through their Econnections platform in the Netherlands, Deloitte and key eCommerce players like Bol.com and PostNL encourage and support scale-ups that specifically solve such challenges. “When you consider the state of eCommerce today, the sheer number of challenges can be staggering. The challenge lies in matching the customer needs with the right vision, strategy, and digital execution”, Jeroen says.

The challenge of differentiating

“Ten years ago, only a few companies could do eCommerce well. Today, every company can easily put some SaaS tools together to create a solid shopping experience”, Jeroen outlines. “Technology is advancing, but you still need the right people to envision, build and grow your eCommerce infrastructure. The IT landscape changes rapidly, which means you can’t rely on five-year plans anymore. The business needs agility and flexibility to shift channels and create new business models and propositions. With all the tools available through the cloud, this has become much easier, but also more difficult to differentiate from competitors. That’s the challenge of going online: more opportunities, but more competition.”
With the upcoming death of third-party cookies in 2023, companies need to reevaluate their customer strategy and move towards first-party data to create personalized customer experiences. Where eCommerce used to be about driving traffic through targeted digital advertising based on 3rd party data, this is no longer possible. Companies need to learn how to build their own communities and revisit their brand and loyalty strategies to replace targeted digital advertising.

              Brands need to offer a consistently superior customer experience                     that captures a short attention span, differentiates from competitors,
         and keeps customers coming back for more.

         Sudev Nath, Practice Lead eCommerce

Staying focused on the future

One of the pitfalls observed is brands using their online success during COVID-19 as a given for the future. “We have seen several COVID-19 false positive indicators shaping key decisions around channel strategy and product market mixes.”, Sudev states. “It’s critical to understand and differentiate long term behavioral changes versus short term adaptations in your industry. With that as a starting point, you need to assess if your current infrastructure and capabilities meet the demands of tomorrow. Equally, do you have the right eCommerce strategy to drive profitable growth?”.

“This is why it is important to solve these challenges from different angles”, Jeroen says. “The CFO, for example, is best at considering new business models, like D2C and marketplaces. The CIO should align with the CMO to bring customer data together with marketing tooling to create an ecosystem that enables differentiating customer experiences. The overarching goal should be serving the customer, now and in the future. Without the regular, drastic shifts, even large enterprises can run out of momentum.”

The next steps in eCommerce

“Successful eCommerce is always about offering the best customer experience possible to your customers. You must be relentless in your mission to keep improving the customer experience. That’s what leads to connections, loyalty, and business results,” Jeroen says. “As said before, eCommerce is becoming increasingly difficult to master.”.
Disrupters like Picnic and Tesla saw opportunities around new digital business models where incumbents did not. “You can see this difference in speed also in the way companies picked up digital transformation in response to the COVID-19 pandemic,” Jeroen outlines. “For most companies, eCommerce revenues grew, but only some managed to accelerate their digital transformation and become fully digital”. “That success requires agility”, Sudev adds. “You need to be able to shift your business operations and flex your technology infrastructure to embrace change and enable business agility.”

On the technology front, the answer is increasingly to embrace MACH architecture. As a principle, MACH stands for Microservices, API-first, Cloud, and Headless. It characterizes modern, best-of-breed technology systems that offer maximal flexibility and business agility. The MACH approach lets you cherry-pick the best-of-breed solutions for your specific need as you go. Every component can operate independently and updated without impacting customer experience. “MACH brings agility, consistency, and simplicity. This enables your teams to effectively create differentiating eCommerce experiences,” Sudev continues. It does come with a fundamentally different approach, he warns: “It fails when you see this only as an IT change. A shift to MACH requires business and technology teams to organize differently around scaled business agility.”

           Cutting costs is much easier than working on new revenues
           in the future. But for long-term success and relevance, a significant
           part of your focus should be kept on the customer and required                            investments to improve experiences.

           Jeroen van den Nieuwenhof, Offering Lead Marketing & Commerce

 

Organizing for success

From orientation to loyalty, experience is at the heart of it all. Consumer behavior and perception are defined by experiences. “As a company, you need to have a strong vision on how your organization creates and improves the experiences you offer your customers”, Jeroen says. “The only sure way to grow and thrive, is to test and learn. How can we provide reliable financial advice on TikTok? Can we make the webshop faster by going headless? What first-party data can we use to personalize the shopping experience? Whatever your next step will be, if it improves the customer experience it is a step in the right direction.”
Companies should learn to embrace constant change, Jeroen remarks: “Companies that want to stay in business in the future, need to understand how consumers and companies adapt to new technologies and ways of doing business. That means shifting the organizational mindset and skillset to the digital future. You need vision and strategy, not only around the customer but also the internal organization. Everything must be balanced. The crux lies in realizing that this is not a sprint, but a never-ending marathon.”

“It’s not easy, but it’s necessary,” Sudev adds. “There is a growing mandate for the C-level to shape a digital-first mindset within their organization and deliver unified experiences across all interactions with their customers. That requires mastering multiple disciplines to build and sustain a competitive eCommerce experience.”.

Deloitte Digital combines business strategy, design, and technology to build the optimal customer experience for their clients. Curious to find out how we can help? Get in touch with Jeroen van den Nieuwenhof and Sudev Nath.