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Ebook | 17 minute read
A detailed eBook on the future of commerce and how to prepare your business for what's to come.
The Future of Commerce is not a science fiction tome filled with alien beings embarking off UFOs; it’s not stuff of folklore or urban legend. What may be considered alien is how consumers used to transact business. Long gone are the days where you had to push a cart around a brick-and-mortar store to stock the refrigerator once a week (although many still do), or browse a paper catalog and place an order by phone or pay the utility bill in person.
Technology has afforded us the convenience of choice of shopping for and buying goods from wherever we are, on a device of our choosing, provided we have access to the internet. And better yet, technology has shown us how limitless the possibilities truly are.
We’ve come a long way. Now, commerce is about the experience, both physically and virtually. It’s about meeting a consumer where they are; and giving them the right offer, on the right channel, at the right time, in a way that’s meaningful to them.
In this ebook we’ll look at what’s steady state in commerce, what’s on the horizon, and who's doing what in the space.
You’ve heard of the 3 Cs of Commerce: Connection, Content, and Context. And now, Composability.
Commerce is: Content – anything related to how goods and services are transacted: mobile apps, product reviews, digital catalogs, or how-to-videos that facilitate the buying journey from discovery to purchase. Connection – from the social media platforms that bring us together, to the IoT innovations that make our everyday more convenient, commerce connects us to each other, and to goods and services essential to our lifestyles Context – use of consumer data drives the commerce experience through personalization. The consumer stays in the sales cycle with product recommendations and curated content based on shopping behaviors and preferences.
Composable Commerce is an approach that enables marketing, merchandising, and sales teams to bring their brand's unique digital vision to life by launching and continuously optimizing digital commerce experiences that leverage multiple best-of-breed vendors, composed together into a complete, business-ready solution.
While a traditional legacy solution can provide functionality out-of-the-box, the front and back end tied so closely together limits the flexibility to create unique commerce experiences for your customers.
An additional pain point within a more traditional legacy platform is when your business has more complex requirements. You’ll need developer expertise to create a custom workaround, which is expensive and time consuming to build and maintain when the front and back-ends are so tightly coupled.
The evolution of headless commerce brought about a decoupling of the front-end and back-end, therefore putting control back into the hands of developers (and ultimately business users) to create better and faster front-end experiences through APIs and JavaScript framework.
Headless commerce sparked the evolution of composable, MACH-based modular solutions instead of one large head, or a more traditional legacy platform – and just like that the Composable Commerce Movement was born.
Digital commerce footprints of today no longer fit the one-size-fits-all model from one vendor. Back in the first wave of the Commerce revolution, businesses ventured online with standardized platforms and minimal control over outcomes. This worked when there was only one digital channel, now digital is a medium with countless channels, each requiring unique commerce experiences. A Composable Commerce Approach offers incredible benefit to brands embarking on making the most of digital commerce: Control - Launch unique, brand-centric experiences according to your specific requirements. No more one-size-fits-all, out-of-the-box functionality. There isn’t a need for costly solutions requiring specialized skillsets and long timelines. You have more freedom and control to make changes as your business scales and get your product or services out in the market
Simplicity – The Composable Commerce approach allows you to launch specific functionality like subscriptions, catalogs, or unique content based on your requirements with easy vendor integrations for functions like search, personalization, content management, or tax. Moreover, you aren’t locked into vendors within an open ecosystem.
Confidence – No more compromising business continuity and job security for risky, unproven technologies
Take Pella, a leading window and door manufacturer and distributor in the B2C and B2B space. From a traditional commerce perspective, the purchase of windows and doors has been done in-store, as with many highly considered purchases. But what happens when pandemic restrictions limit in-person interactions? For the needs of the business and customers, the model needed to shift to a virtual experience. Taking measurements, choosing styles and treatments, payment, and arranging installation shifted with customer demand.
Pella accomplished this through a custom-built configurator to create a digital shopping experience reflective of the in-store or dealer experience. Residential shoppers are guided through the purchase by choosing from available styles and materials, and for those in the trades there is an option to access special pricing. For those undecided about their purchase, there is plenty of design inspiration content. Pella created a never before digital experience with the help of SaaS vendors and partners, and the speed and flexibility made possible with microservices-based architecture. The approach followed careful consideration of their needs, and the changing demands of their customers.
We’re just scratching the surface on what the future holds for the metaverse. The convergence of the physical and digital worlds is fast becoming more than a buzzword to sell tickets, and more of an experience shoppers seek out and expect.
From a content perspective, we’re already seeing major retailers dive into the metaverse with AR/VR technologies intended to solve for the “sight unseen” aspect of digital commerce. Home furnishings, clothing and accessories, and health and beauty brands are embracing virtual technology trends to broaden customer experience, ensuring complete satisfaction and confidence in a product prior to purchase. Trending now in beauty retailers is the “Virtual Artist” function on a mobile app mirroring the experience with an in-person makeup artist. By downloading the app and with a few simple clicks, shoppers preview any variety of products like lip colors or bronzers with the opportunity to share the results on social media. No more messy testers or setting foot in a store, unless of course you prefer the experience – and that’s what modern commerce is essentially about: meeting the customer where they are. Today’s home furnishings retailers are widely using “View in Room” functionality on their app where shoppers snap photos of their space from a phone and preview how products will appear in the room. The feature gives the customer more control on the path to purchase and reduces instances of product returns and inconvenienced customers who may not return to your brand.
It’s not just social media opening new channels and technologies to today’s shoppers. Brands are quickly developing “smart clothes” as we speak to automate processes, create more convenience, and track data.
Bluetooth-enabled clothing such as yoga pants and fitness socks manage exercise progress in an app; you put in the work, and the app tracks your progress and goals. Swimsuits on the market alert the wearer (via smartphone push) when UV rays are climbing and it’s time to reapply sunscreen to avoid a burn.
Retailer Levi’s paired with Google to introduce a commuter jacket outfitted with Bluetooth capability to connect with a smartphone. Manage calls or music hands-free while you enjoy your morning and end of day commutes!
Snap Spectacles allow you to capture the moment in stills or video through sunglasses outfitted with HD cameras that capture 3D photos and videos at 60 fps, and have four built-in microphones. They also offer 100% UVA and UVB protection.
Non-fungible tokens (NFTs) appeared as early as 2014 particularly in gaming, art, and sports memorabilia worlds where digital goods hold unique value and are based on exclusivity. NFTs are a form of cryptocurrency, typically stored in wallets, and are bought, sold, or traded by collectors and investors. NFTs and cryptocurrency are early-stage concepts, however they open next-gen, highly speculative opportunities for investors with the option for fractional ownership rights. As with any new technology, there are risks especially around fraud. Questions remain about NFT regulation, and if their popularity will rise or wane in coming years. Here are a few NFT facts to give you a broader understanding of their significance:
Trends show that some retailers are adopting cryptocurrency as a payment method. Starbucks has partnered with Bakkt to allow customers to pay with cryptocurrency, and Dallas Mavericks fans can now use cryptocurrency to pay for season tickets; however U.S markets have been slower to adopt it. The top five countries of highest adoption are located in Asia.
Discover first-hand how easy it is to build catalogs, enable custom pricing, set up promotions, streamline cart and checkout, and more. Get hands-on experience in product today.
The Internet of Things (IoT) (noun): the interconnection via the internet of computing devices embedded in everyday objects, enabling them to send and receive data
The Internet of Things is a giant network of connected devices (and people) collecting and sharing data about their environment. What might IoT look like in a typical day? Anything from managing your home’s temperature from a smart thermostat app on your phone, to an alert from your wearable fitness device that you need 500 more steps to hit your daily goal – maybe a walk after dinner? Think about the emergence of voice-activated technologies in the home that alert you when you’re low on a particular household item like paper towel or dish soap. With a simple voice command, the items are ordered, paid for, and on their way to you. On a manufacturing floor, IoT connects machines in the cloud to increase efficiencies like predictive maintenance. If you schedule maintenance at predetermined service points by analyzing use, the less instance of costly manual failure versus planned downtime.
Significant IoT investment in the healthcare sector is making headlines and will continue to do so long after pandemic restrictions lift. A Forbes report tells us early-stage pandemic virtual visits in the U.S. were forecasted at 36 million but ended up closer to the 1 billion mark by year’s end. Even as in-person appointments return, watch for IoT developments in healthcare such as wearables and sensors geared for the elderly to minimize viral exposure, and allow for greater at-home independence into advanced age. Out of pandemic-related circumstances hospital equipment manufacturers are looking at IoT technology in the way of Bluetooth-tagged devices like defibrillators, or standard issue equipment such as beds and wheelchairs to allow better management of patients and resources in the wake of labor and budget shortages. What this means for healthcare is a new way of how services are transacted. With the emergence of wearables and monitors, patient information is gathered and stored digitally. Appointments and check-ins can be done virtually, de-risking virus transmission among the most vulnerable. Ambulatory care is also streamlined when a signal alerts EMTs to an emergency situation without the need for the individual in need of help to initiate contact.
5G connectivity represents big changes for commerce in the way of consumer use cases. While most are excited for faster residential streaming and gaming speeds, Gartner tells us in the next three years the U.S. and a handful of other countries are preparing for broader, more reliable machine-type communications on mmWave frequencies. What this means is large scale management of resources with minimal human involvement such as fleet vehicles (rental cars, bikes), parking lot spaces, infrastructure such as roads and ports, and asset tracking in logistics, i.e. supply chain management.
No matter how integrally (or minimally) social media may influence your personal spending habits, it undoubtedly has a place in the hearts and minds of most online shoppers by virtue of its popularity. Community remains a key driver of commerce. Social commerce by definition is the ability to shop and make purchases directly in apps such as Instagram, Pinterest, Snapchat, and most recently, TikTok. Instagram reports 60% of its users discover new products on their platform. When paired with word-of-mouth reviews from people you trust, (or at least share similar tastes) and the ability to tag and highlight products in both Story and Feed, you've got a highly versatile, perpetual sales engine. Your path to purchase is expertly laid out from discovery, research, review, one-click purchase, and delivery. A virtual one-stop shop complete with customized push notifications when the brands you follow have new products or restocked items. For those big brands and local makers alike, social commerce offers the ability to partner with influencers to expand reach. Relationships should maintain a certain level of alignment to brand and niche, and surprisingly do not have to carry significant cost; influencers can operate and be just as effective on a micro-level with less investment yet resonate with target and attract new audiences.
Aside from Headless Commerce, you’ve heard the terms API-first and Composable Commerce as the future of commerce. We’ve addressed composability and Composable Commerce in the first chapter of this ebook, and we’ll now take a look at the meanings around API-First and API-Secondary when it comes to commerce platforms. Bryan House, SVP of Product and Customer Success at Elastic Path differentiates the two terms in this way:
A classic tale of a wolf in sheep’s clothing; or the adage that things aren’t exactly what they seem. APIs by nature are lightweight and can extend to many different use cases. When the requirements call for something more complex, developers design APIs to talk with each other and streamline requests for data, simplifying some of that complexity. A monolith system on other hand has many APIs to support many use cases – at first glance it may seem like a value-added solution, but in reality it is creating more complexity and workarounds by creating more interfaces. Kind of like the terms retrofitted or aftermarket, or what Bryan refers to as “middleware” – it may seem like you’re saving time, budget, or hassle with an API-secondary approach, but, you are creating more work for DevOps teams in the end.
APIs are the heroes of the story. They’ve simplified and accelerated commerce by integrating and connecting people, systems, data, and new user experiences. They’ve opened up the flood gates to new products, services, and ways of transacting business. What this means for the future of Commerce is an API Economy. What some are calling the fourth industrial revolution, or a digital revolution. Kristin R. Moyer, vice president and Gartner analyst stated in the 2016 report Welcome to the API Economy, “The API economy is an enabler for turning a business or organization into a platform. Platforms multiply value creation because they enable business ecosystems inside and outside of the enterprise to consummate matches among users and facilitate the creation and/or exchange of goods, services, and social currency so that all participants are able to capture value.”What does this mean for commerce? Everyone is all in. You not only face competition from your sector or industry, but you are also up against the world – anyone who can start up a business and sell goods and services. The challenge arises in how you will bring those APIs together to improve and reiterate the experience. And if you don’t do it, someone else will.
We’ve come a long way in payment and bookkeeping standards in a short time. Credit and debit cards were once on the cutting edge of transactions, and in the next wave of payment technology even greater conveniences abound, eliminating the need to carry anything in a wallet or bag to make a purchase.
The digitization of B2B payments– Most B2B transactions are done manually which creates inefficiencies and more room for error. Examples include Accounts Payable and Receivable, and employee reimbursement. More B2B roles are going remote so going digital makes sense in the absence of a physical office space. Contactless payment – Greater adoption of digital wallets (especially in U.S. markets) and QR codes as accepted methods of payments is on the horizon. We’ve seen the emergence of QR codes in restaurants and in hospitality as a way of menu selection and payment for convenience sake, and as a way to keep distance during the pandemic and reduce virus transmission. Broader cryptocurrency adoption – We’ve touched on cryptocurrency in an earlier chapter and the retailers who are testing the waters with its adoption as an accepted payment method. Aside from its convenience, there are more advantages to retailers considering adoption: 1) Retailers can avoid foreign exchange fees and transact more international business. 2) Crypto is decentralized and permission-free; users don’t go through a financial institution for funds, opening up the possibilities to people who don’t have access to traditional banking systems. Invisible payments - Larger retailers gave shoppers the option to “Scan and Go” with a smartphone, app, and a payment method attached. Simply grab a cart, scan your items, and you’re on your way, paid in full. Amazon Go first rolled out this practice with their app and Amazon Go storefronts controlled by access gates. Once you’re ready to shop, a QR code is generated on demand for entry. The store interior features cameras and shelf sensors deterring theft, and ensuring accuracy in the shopper’s virtual cart and final amount charged.
Less noise, more speed and agilityTraditional RFPs look more like a series of boxes to check; from the must haves to the nice to haves, peppered with timelines, the players involved for approval, pricing, and demos/free trial availability. When choosing an eCommerce partner, this static approach may not be as effective or accurate in evaluating your business needs.A prolonged process without context around the future needs of your business is antithetical to choosing a good partner (or partners) who play well in the digital commerce sandbox, and who meet your needs, today and as you scale. When we talk about future proofing your Commerce platform, it’s essential to talk about where you are and where you’re going, without the pressure and noise of a traditional pitch. While it’s impossible to have a finite level of certainty from an environment so heavily rooted in change, the conversations are vital towards solutions versus outcomes.We understand commerce technology moves quickly; you hardly have time to ask questions and talk through the needs of your business and budget restraints before the next new thing is launched. That’s where good partners are key. You don’t need another sales pitch on a product or service that won’t meet your needs, and wastes more time you don’t have. So now what? That’s a great question. Thanks for reading. Reach out. We’d love to talk about what’s next.
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