What E-Commerce Innovations Will Drive Growth?
It’s a truism that innovation drives growth. This is the engine behind so much of the global digital transformation industries are experiencing today. But what does this look like for an industry that in many ways looks a lot like it did 20 years ago? E-commerce is a staple in consumer focused global markets. Online marketplaces like Amazon and Alibaba are household names and almost every major retail brand has an online store. Yes, e-commerce is utterly familiar but the most successful brands are the most innovative ones. We want to answer the questions: “how does innovation drive bottom line results?” and “what innovations will have the most impact?”
Small Innovations Win Big
Most people don’t realize how difficult selling online can be. Consider how much time is devoted to catalog management, inventory, pricing, promotions, web content, IT, channel alignment, protecting brand erosion, competition, supply chain, shipping, tax, product management and strategy. These tasks can be enough to overtake an organization but from a customer experience standpoint no one cares.
Customers don’t see “channels.” They don’t care how hard it is for you to manage your digital presence and they don’t care about the challenges to creating a consistent online and offline experience. The good news is that every brand faces the same challenges. The ones that succeed are the ones who can make “digital” a way of doing business and not just something you add to your business. In other words, innovation has to be in your DNA.
Amazon is widely considered to be the exemplary model of an innovation driven e-commerce player. But what did they do to get that recognition? What took them from an online bookseller to global marketplace? IT and business innovation like Kindle and AWS aside, Amazon’s success is largely due to a bunch of small changes that each paid huge dividend like 1-click buying, relevant recommendations, product reviews and wish lists. These are now table stakes for brands looking to develop an online presence. So what is the next big e-commerce innovation?
No One Knows So Speed Is Key
The reality is that now one knows what the next big thing in e-commerce will be. Most ideas will have only a marginal impact on conversions and revenue. Innovation isn’t about betting big on a single idea, it’s about getting creative and trying a bunch of new ideas. An iterative approach to innovation is what really moves the needle and companies that are locked into cumbersome technology platforms are the one who are going to get left behind.
Perhaps the biggest enabler of innovation today is the cloud. It provides two main benefits to brands:
- Cost/Performance Alignment – This is the most commonly talked about benefit of the cloud. The benefits of shifting IT costs from major one-time capital expenditures (CAPEX) to on-going monthly operating expenses (OPEX) have been well documented.
- Time to Innovation – By moving e-commerce operations to the cloud you immediately see several benefits. You don’t have to manage infrastructure or applications, you get more frequent and seamless product upgrades, you get budget savings (see #1), and possibly the most compelling is the ability to more quickly develop, test and deploy integrations and extensions. There are some industry specific benefits as well; just look at the benefits utilizing SaaS based excise tax software.
70% of IT leaders believe cloud computing (SaaS) makes them more agile. Given how common it is to hear about IT acting as a hurdle rather than a source of innovation, it’s clear that companies will continue to depend more and more on the SaaS applications. The key for e-commerce brands is to find the SaaS provider who has a vision, roadmap and the ability to help them deliver a compelling customer experience. For this you need a complete platform, not just a shopping cart or a marketing solution. Open, scalable, integrated PaaS and SaaS that work together with an integrated suite of applications is where innovation minded companies should start.
Investing in Innovation
Oracle just finished collecting e-commerce investment data from over 300 companies globally. 37% of the respondents are considered “rapid growth” companies – those companies are the ones who say customer experience is a primary criterion for success. In the same survey respondents were asked to rank the most disruptive industry trends – “rapid growth” companies listed digital customer experience and cloud applications are their top two.
The point here is that innovation doesn’t just happen. It requires a deep and abiding focus on the customer journey and it also requires the right capabilities.
The 2021 sales tax changes report: midyear update
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