Ten transformation trends in digital commerce
Much has changed since the first products were sold online in the 1990s. Not only are features like inventory visibility, product reviews and package tracking, table stakes, retailers are now focused on more strategic initiatives that will give them competitive advantage in the future, such as providing a unified experience throughout the customer’s journey and utilising artificial intelligence to offer personalised experience and streamline operations.
Digital commerce is getting more conversational, visual and intelligent. It is worth remembering the old maxim – a picture paints a thousand words. Conversational interfaces make the shopping experience more intuitive, but incorporating images, video and immersive technologies like augmented reality can make conversational interfaces more powerful for engaging and converting customers.
Artificial intelligence is the technology that will have the most profound impact on all aspects of commerce, according to Gartner. By 2022, at least 5% of digital commerce orders will be predicted and initiated by artificial intelligence.
These ten hot trends will impact the future of digital commerce:
#1 Conversational commerce
Using voice or text, messaging platforms such as Facebook Messenger, WhatsApp and WeChat enable people and machines to discover and purchase goods and services via a dialogue. Although the first wave of conversational commerce bots met with mixed success, improvements are on the way thanks to maturing artificial intelligence and related technologies.
#2 Immersive commerce
Technologies like augmented reality and virtual reality allow customers to project virtual products into the physical environment to configure for fit or function. For example, people can view furniture in 3D then project the selected items into a physical space to check if they fit, or try on clothing and accessories for color and size in virtual fitting rooms.
#3 Unified commerce
Customers use an increasing number of channels throughout both the buying and owning stages. They want to have a seamless experience as they hop across channels at various stages of the journey, and expect organisations to recognise and interact with them in a way that builds on their prior experience and understands their preferences.
#4 Subscription commerce
Everything from socks to video games can be now sold on a recurring and automatically renewing basis. Subscription commerce enables organisations to generate repeatable, predictable revenue; customers also benefit from convenience, cost savings and personalised curation.
#5 Thing commerce
Connected machines such as home appliances and industrial equipment can make purchases on behalf of human customers, either by directly taking requests from the customer or inferring demand based on rules, context and customer preferences. The primary benefit of thing commerce is to reduce customer effort and friction in purchases. For example, industrial equipment manufacturers can offer predictive maintenance to help customers keep a machine in its best working condition while keeping operational costs down.
#6 Enterprise marketplace
This is an emerging business model, as organisations shift from selling only products they own or source, to selling third-party products that are owned, priced and delivered by someone else. Early adopters such as airports, shopping malls, real estate developers and manufacturers already have large numbers of customers and partners.
#7 Application programming interface commerce
Businesses are building modular platforms instead of relying on a single monolithic commerce solution, to support new customer experiences, business models and an increasing number of ecosystem partners. API-based commerce enables organisations to decouple the frontend from the backend and quickly integrate new capabilities or systems without impacting the architecture.
#8 Artificial intelligence
This comprises a group of technologies including natural language processing, machine learning and deep learning that can learn from data and make conclusions without being explicitly programmed. Examples of artificial intelligence in digital commerce range from product recommendation, content personalisation, fraud detection, price optimisation and virtual assistants to image search and categorisation and customer segmentation.
#9 Personalisation
This technology is more mature compared with other technologies in this list. There are many opportunities to personalise throughout the customer journey such as landing page, product page, search, product recommendation, banners and offers. Personalisation can directly contribute to the bottom line by increasing conversion and or order value.
#10 Visual configuration
A visual product configurator presents an accurate depiction of configurable and customisable products, allowing customers to have a compelling experience interacting with the product. Visual configuration includes a combination of technologies such as 2D 3D images and video, floor space planning and computer aided design, and can be used together with AR and VR.
Focus on no more than three items in this list at a time. Do not try to do everything at once. Check out the competition to see which technologies are must have or give you competitive advantages, move those to the top of the list. Prioritise the remaining options based on business value, time and cost to deliver.
Key takeaways
- Digital commerce is getting more conversational, visual and intelligent.
- Conversational interfaces make the shopping experience more intuitive.
- Images, video, augmented reality can make conversational interfaces more powerful for engaging customers.
- Artificial intelligence is the technology that will have the most profound impact on all aspects of commerce.
- By 2022 at least 5% of digital commerce orders will be predicted and initiated by artificial intelligence.
Chat, speech, images, immersive reality, predicted purchases, are all set to enhance the digital commerce journey in the years ahead, explains Sandy Shen at Gartner.
