Since the first online shopping transaction took place in England in 1984, electronic commerce (aka e-commerce) has grown remarkably and evolved into multiple dimensions over the last three decades. Digital commerce, the new face of electronic commerce, is going to be touching everyone’s life in the times to come.
THE EVOLVING DYNAMICS: FROM E-COMMERCE TO DIGITAL AND MOBILE COMMERCE
According to the World Payments Report
, global e-payments are expected to double by next year while m-payments are expected to grow threefold in the same period. M-commerce started as a simple concept, where consumers could, for example, use the mobile phone enabled Coca-Cola vending machines and make payment through text messages. With the speedy rise of smart phones and tablets, a new dimension of m-commerce has evolved where the mobile phone works like a credit card, allowing users to carry out cashless transactions.
|Digital Commerce: The new Face of E-commerce!
Last year, a major South Korean retailer opened a virtual store in a busy Seoul subway station that allows smartphone users to make purchases by taking photos of the barcodes of relevant items. Digital commerce is much more than e-commerce, far beyond Internet portals—it offers creative ways of placing orders, and is all set to change the way commerce happens.
E-COMMERCE: CHALLENGES AND OPPORTUNITIES
Success of digital commerce is powered by the advancement of technology and computing, providing users a real-life shopping experience in a virtual environment. This brings in a number of technological challenges:
- Enabling better customer engagement and experience
Engaging with the customers, understanding their interests and bringing in experience that is fascinating and useful for shopping is a major challenge facing organizations today. A successful e-commerce retailer knows how to offer a personalized experience and engage customers using information from all potential sources including social networking sites and customer analytics.
- Data mining and storage
Success of an e-commerce site primarily depends on the experience it offers to its users, based on the consumers' habits, preferences and buying history. Analytical techniques like “Business Intelligence” and “Data Mining” can help retailers determine the relationship among internal factors such as price, brand positioning etc., and external factors such as customer demographics. (My next blog post “Personalization with Business Analytics is the Key for E-Commerce” will explore this subject in greater detail).
- Effective promotions and cross selling
On a Sunday morning, you find a variety of promotional material and discount coupons lying at your door step, most of which usually end up in the waste bin. If you don’t want your marketing efforts to end up there, you need to adopt smarter multi-channel marketing strategies.
Affinity selling is an interesting concept based on conventional market basket analysis, where a retailer keeps track of all the products that a customer buys and analyzes the correlation between them. Cross selling is done based on this correlation (e.g., if one is buying bread, butter is shown next to it so the buyer does not need to separately search for it). This provides a better user experience and promotes more effective cross selling. (I plan to bring more information on this topic in a future post Digital Commerce: Cross Selling and Smart Offers Through Rule Engines”).
- Ensuring security and privacy
In a virtual shopping environment, ensuring secure and fast payments while maintaining consumer privacy is a major challenge. Online retailers are standardizing their transaction processes by implementing security standards like PCIDSS (Payment Card Industry Data Security Standard) that offer better control around the cardholder’s data and reduce the risk of cyber fraud. Outsourcing service providers specializing in risk management can also help retailers analyze potential loopholes in their payment systems (for example, chargebacks recovery), and adopt the best practices for risk management and regulatory compliance.
- Providing seamless logistics and supply chain solutions
The last decade has seen massive supply chain automation through ERPs, largely because of the pricing pressure. In fact, now it has moved beyond the organizational level where platforms like Bolero can directly connect the corporate account to the bank,enabling electronic collaboration of trade documents.
DIGITAL COMMERCE: THE CHANGE IS HERE
With digital commerce, the business of selling has become a lot more interesting and exciting. New business opportunities are getting created with technology trends like business virtualization, Big Data
, and software such as personalization tools, rules engines, etc. These on one end would help predict consumer behavior, and on the other end support seamless processing of data, creating a holistic shopping experience.
To ensure seamless transition and to leverage the opportunities offered by digital commerce, retailers must look at partnering with an outsourcing service provider with the right technical expertise and capabilities. A business solutions provider offering a one-stop solution for domain development, platform integration
and implementation of technical support
and customer service
, can help you implement innovative and sophisticated processes, achieve operational excellence, and create a holistic customer experience.
What has been your experience with e-commerce? Do you find the transition from a paper-based transaction mode to an electronic medium challenging? What are the risks and opportunities you foresee in this transformation?