The commerce landscape has been shifting and there’s no sign of it slowing — that’s true globally as well as here in Australia and New Zealand.
To understand what this rapidly changing landscape could look like for the remainder of 2022, Salesforce analysed shopping behaviour from websites that use Commerce Cloud platform and also conducted a survey of over 4,000 global commerce professionals for our second edition of the State of Commerce report.
These findings are an important window into where commerce is headed and how businesses should be rethinking strategies in this space. And three major takeaways show why those strategies will likely depend on greater visibility and flexibility, the kind that facilitates a single view of your customer and creates unified experiences across channels.
1. Digital commerce channels are expanding — and complexity is increasing
The pandemic didn’t create the shift toward digital-first commerce, but it certainly accelerated it. In Australia, the share of B2C revenue from digital channels rose from 34% to 45% within two years — a number that the report projects will rise to 54% over the next two years. And in B2B commerce, percentages are similar, with 48% of revenue originating from digital channels and expected to rise to 66% in two years.
This heightened need can create new challenges. In Australia, respondents ranked channel conflicts as their fourth biggest challenge. After all, buying journeys are becoming more complex, with B2C consumers engaging across an average of nine touchpoints when interacting with a company.
Expanding digital channels is critical for meeting customer expectations, which span every pre-sale to post-sale interaction. Globally, 69% of digital leaders say they’ve invested in new digital channels over the last two years. They’re also more likely than digital laggards or digital moderates to say they feel prepared to handle challenges like supply chain disruptions and inflation.
And, in the B2B space, demand for online sales is growing. Global respondents say the biggest benefits of digital channels include improved customer satisfaction, expanding into new regional markets and growing their customer bases.
In my view, this proliferation of digital channels creates two major challenges that businesses need to keep front-of-mind. First, it heightens the need for brands to bridge gaps between the digital and physical. After all, most of us have felt the confusion of getting one experience online and a totally different one in store, whether it’s because we’re only recognised in only one database or we aren’t able to access the same products or services in both spaces. No brand wants its customers to feel like they’re shopping with two completely different organisations, but that’s the impact that disconnected digital and physical channels can have on customer experiences.
Second, it’s not enough to expand your digital channels — and it’s not even enough to stitch them together for seamless customer experiences, either. Brands will also need to evolve how they capture and track data in these channels, especially as they start mapping which types of customers and channels tend to yield the highest ROI.
And that connects nicely to the next takeaway.
2. Smart use of data correlates to higher performance
Across all commerce organisations, both locally and globally, the report reveals a massive focus on data. In Australia, a majority of respondents agreed or strongly agreed with the idea that their organisations were effective at using data to acquire new customers, automate processes and connect commerce with other parts of the business.
However, there are plenty of challenges, especially as commerce becomes more digitised, more complex and more distributed. Worldwide, the internet continues to evolve as privacy regulations tighten, including the waning use of third-party cookies. Over one-third (36%) of global respondents say they’re investing in first-party data strategies to address some of these challenges.
It’s not enough to simply collect data, though. Especially as buying journeys spread across a variety of new channels, businesses need to be able to thread together different sources of data and employees need to be able to make data-informed decisions quickly.
This is another area where digital leaders have a big advantage. Professionals at these organisations are more likely to say they’re effective at using data to understand customer behaviour and to inform marketing or business strategies. Again, improved performance relates back to greater visibility of your customers and how they interact with you, a 360-degree view of each individual.
3. There’s a renewed focus on flexibility, from architecture to payment options
Many of the challenges mentioned so far demand a single view of your customer — but they also require agility and flexibility.
This applies to both internal and external experiences. Customers expect more options and seamless experiences, and employees need simplified experiences of their own in order to deliver those outcomes for customers.
This is playing out in a range of priorities and choices, including payment options. About two-thirds (66%) of Australian respondents say they accept Apple Pay and buy-now-pay-later instalment plans (60%), with roughly one-third of other respondents planning to offer these options within the next two years. And 34% are already accepting cryptocurrency, though only 38% have plans to offer it as a payment option in the next two years.
Companies are also looking for ways to empower employees with greater flexibility — in Australia, respondents list technological constraints as their number one challenge. Globally, one of these constraints includes slow, cumbersome back-end experiences, with 34% of organisations saying that changes to their digital storefronts can take weeks or months.
It’s probably one reason why headless commerce is on the rise. This type of architecture — where the digital front end is decoupled from the back end — allows businesses to make faster changes to their digital storefront. A majority of Australian respondents plan to implement headless architecture, or are already using it now (55% and 26%, respectively).
Those who have already implemented headless architecture report a range of benefits. Along with 89% of respondents saying it improves flexibility and agility, 80% say they’re better able to add new sales channels like social or virtual reality. And 62% say it has improved integration between systems.
But it’s critical to remember that greater flexibility and expanded options tends to create a greater variety of interactions and revenue streams. To stay in front of customer expectations, brands will need to build central sources of information that ensure cohesive experiences and outcomes.
Are you keeping up with ongoing shifts in commerce?
Rising customer expectations, expanding sales channels and evolving data challenges — the research clearly shows that commerce organisations face greater complexity than ever. As a result, the research also reflects the need for centralised data, a 360-degree view of each customer, and fast, flexible responses.
To see a full breakdown of challenges, how organisations are managing them, and which factors are driving success, be sure to check out the Tableau highlights or read the full report.
