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Digital Transformation! A word that we have been hearing a lot in recent times across various sectors and categories. While it might seem like just another buzzword, digital transformation is our reality. From devices like Alexa and Google Home to help you with basic functions like switching on the TV or lights to playing a recipe for you to cook along with, to being able to book an appointment online with a few clicks, rather than calling someone and waiting for hours, Digital Transformation is everywhere.
E-commerce is one sector where digital transformation has made a huge impact and how! Rewind to 2019, when the COVID-19 pandemic and everyone hit us turned to digital shopping or e-commerce to sell and buy things and services online. This has led to a big shift in consumers shopping online in higher volumes rather than visiting physical stores. Even after the ease of restrictions, customers continue to shop or even window shop online and will continue to do so in the foreseeable future.
The On-Going Shift in Commerce
What is causing this ongoing shift? According to a study by Deloitte, various reasons are contributing to this shift:
- Consumers with e-commerce have options to shop across various categories and from various brands across the world at the convenience of their homes. Online grocery sales—where offline stores held the advantage—saw enormous growth in the US and many other countries. By 2025, it is anticipated that they will account for 20% of all grocery sales worldwide.
- Access to various product lines through e-commerce has enabled customers to start their buying or customer journey online.
- The limited supply of stocks in physical stores and unlimited choices that is made available to customers online, despite the price differences or delay in shipment, also contributed to the boom of e-commerce through digital transformation. Studies have suggested that over 42% of consumers are willing to pay for convenience.
While we almost always relate concepts like eCommerce and digital transformation to B2C companies or retail, to be more specific, it has a huge impact on B2B businesses as well. Research has shown that over 72% of B2B companies selling or marketing through seven or more channels saw significant growth in their market share. A study by Gartner’s Future of Sales states that 80% of B2B businesses will enable interactions between suppliers and buyers through digital channels by 2025.
“In 2019, when I started it, see even pre-pandemic, I saw that e-commerce was continuing to transform, not just the normal consumable categories, like general merchandise, but they were starting to sweep across everything, even lesser known categories like in B2B industry-specific verticals, we’re starting to see the beginnings of that transformation as well.”
– Rick Watson, CEO & Co-Founder of RMW Commerce.
Benefits of Digital Transformation
While we have established a strong connection between e-commerce and digital transformation, it is also vital to understand the several benefits this synergy brings.
- Businesses, especially in e-commerce, through digital transformation, are empowered to enhance the customer experience, innovate faster and collect customer insights to better understand the customer and their decisions.
- E-commerce companies can use digital assets and technologies to provide value to the customers for which they would even be prepared to pay a premium price. Digital transformation helps companies achieve a competitive advantage and provide value to their customers.
- Through automation, e-commerce companies are able to automate important operations, which leads to an increase in productivity and revenue while saving them time to focus on other critical areas. With AI, data collection and analysis are made easier, resulting in better decision-making and more accurate forecasts. In the future, automation will make E-commerce a more hands-off procedure for entrepreneurs in many aspects of running a firm.
Common Struggles Faced By eCommerce Companies
While keeping up with the latest digital trends might seem obvious, there are a lot of areas where eCommerce companies struggle with respect to digital transformation. There are two most common struggles that companies face while adopting digital transformation:
4. Lack of expertise at leadership levels: Digital transformation starts from the top. It is more of a lifestyle than a mere concept that companies need to adapt to stay relevant and grow in the current ecosystem. When leadership lacks clarity and knowledge of digital transformation, it becomes a struggle. Leadership in firms that are struggling to transform digitally have not “been there, done that”.
“The leaders weren’t at one of those companies that made this transformation from a traditional wholesale model to a more, a newer direct consumer.” – Rick Watson, CEO & Co-founder of RMWCommerce.
5. Investment dilemma: While talent is highly important to successfully implement a digital transformation strategy, investments are equally important. Even if the companies have the talent to make these transformations happen, they don’t know how much they need to invest and in what order. Vision and planning in the right direction can help in streamlining investment decisions and successfully implement the digital transformation plan.
“Having a guide to help them would help them make those investments more confidently, more quickly and with fewer mistakes.” – Rick Watson, Co-founder and CEO of RMW Commerce.
Companies need to think about: a) what consumer experience they’re trying to enable, b) how they make money and how they create change in their organization. The intersection of consumer experience, revenue and change in the organization and the alignment of these three basic factors with digital transformation would help companies overcome their struggle.
E-commerce companies have to keep transforming themselves digitally to reach more potential customers, gain a competitive advantage and provide value to the customers as well as increase their revenue. Customers want to be able to interact and buy from brands online, anywhere, anytime when they see value and convenience. How people connect with the world, other people and brands have drastically changed, thanks to the digital revolution. Future technologies like artificial intelligence (AI), machine learning, and virtual reality are moving from niche items to the mainstream at a rapid pace. Businesses need to be agile and adapt to these changes to be relevant and useful to the customers.
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If you are stuck with implementing the right digital transformation plan for your eCommerce company, FIQ can help you! Check out our FIQ Consult service for a cohesive digital transformation roadmap and strategy.
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