How to Adapt to Changing
Consumer Behaviors
Customers have more choices today than ever before. More
information, more touch points, and more options are changing the way they purchase. This puts the customer firmly in
the driver’s seat throughout the shopping process. To remain
competitive in today’s business world, organizations must
adapt to these changing customer behaviors, and deliver an
agile, personalized experience across all channels or touch
points. This includes:
→→ Adding new touch points to your commerce arsenal
→→ Connecting your existing touch points to offer customers
a consistent shopping experience
→→ Keeping the customer dialog alive to influence purchase
behaviors
Today the Internet is everywhere and touches every part of
our lives. And there are more touch points emerging – like
Internet-enabled car computers, TVs and other household
devices. Organizations need to keep pace with these developments and ensure they continually engage and communicate
with customers on all existing and emerging touch points.
However, many companies have concerns about implementing
an agile commerce strategy, such as costs and resources. They
also face challenges in developing an agile commerce environment, including separate and siloed infrastructure and systems
for different sales channels, resistance from business unit leaders to change processes or a lack of understanding customer
buying behaviors.
This white paper explores what agile commerce is all about,
the benefits of an agile commerce strategy, as well as the
steps organizations should take to shape an agile commerce
environment.
How to Adapt to Changing Consumer Behaviors
1
What Agile Commerce
is All About
Agile Commerce is all about engaging with your customers in
a consistent and relevant way, over whatever device or touch
point your customer wants to engage with you.
And where it used to be ‘respectable’ to be available in many
touch points (have an app, be on Facebook), or to even have
linked some of them, for example by offering ‘reserve online,
pick up in store' type services, these days the winners will be
the ones who provide a coherent and relevant story across all
touch points. Converting a consumer from a browser to a buyer no longer happens on a single channel, it happens across a
multi-channel journey. And at each step of the way during this
multi-channel journey organizations will have to make sure
that:
→→ They deliver what their customer is after at that stage of
their user journey, whether this is information or transactional capability.
→→ The touch point is easy to access and easy to use.
→→ The information they provide is accurate, consistent and
relevant.
→→ They provide enough arguments that will make the consumer want to use their touch point next in their multichannel journey.
In the near future, our whole environment and every electronic
device around us will be connected through the Internet, with
the Internet becoming a regular omnipresent commodity just
like electricity is today.
Also, the Internet led to an explosion of customer touch points.
No other channel has created so many different touch points in
such a short time including:
→→ Email
→→ Websites
→→ Mobile apps and mobile web
→→ Call centers
→→ Kiosks
→→ Search engines like Google, Bing or Yahoo
→→ Social networks like Facebook, Twitter or Google+
With the Internet expanding into cars, kitchen appliances, TV
sets and other access points, this number will grow rather
than shrink in the coming years. Yet, none of these new touch
points are a new channel. They are all riding on the back of the
existing Internet channel.
In fact, it would be a fatal mistake for any company to treat
them as new channels or silos. With hind-sight introducing
ecommerce as a new channel or new business unit only caused
the problems many organizations are facing today. These touch
points add a different kind of representation of the very same
data that the website already presents but they don’t add any
new business processes. In fact they are most effective when
they are re-using what the web has already established.
Agile commerce also postulates that companies must tear
down the walls they have built between their channels over
years. Conversion is not a single channel concept anymore and
neither are customer acquisition, retention or satisfaction.
Information and data must flow freely between channels and
business units. Customers don’t care if a product can’t be
ordered in one channel from another channel, just because organization dictates it belongs to another channel and therefore
to another business unit. Customers shop with your brand, not
with your channels.
Each touch point can fulfill certain customer needs as part
of a multi-channel customer journey and as organizations
roll out these touch points they need to be clear about what
these roles are. Channel presence on its own is no longer that
relevant, it is what organizations provide at these touch points
that matters.
The Internet enablement of life is a fact and it is not until this
realization has really sunk into an organization that it can be
truly effective with an agile commerce strategy.
A growing need to enable, support and manage this new agile
commerce experience however will drive a significant change
in the IT landscape of retailers, brands as well as manufacturers, especially where it concerns the customer interaction
elements – the touch points. Consistent delivery of content
gathered from across multiple channels and re-distributed across others and centrally orchestrated and personalized user
experiences, again driven by data gathered from all channels,
are the new standards of the very near future.
→→ Game Consols
→→ Electronic shelf labels
How to Adapt to Changing Consumer Behaviors
2
How Consumer Behaviors
Have Changed
It used to be that the majority of consumers shopped and
purchased products not using more than two or three channels. That behavior has changed.
Individuals increasingly use the Internet – both on their PCs
and mobile devices – to research product information, make
purchases, and rate their experiences.
For example:
→→ They conduct product searches using engines like Google,
Bing or Yahoo.
→→ Consumers watch product tutorials or see demonstrations
embedded in videos on sites such as YouTube and Hulu.
→→ They visit retailers’ sites to read product reviews and
compare prices.
→→ They turn to online social networks – Facebook, Twitter,
and blogs – to gather product information and rate their
shopping experiences.
In addition, consumers interchangeably use a variety of devices
– such as PCs, smartphones, and tablets – to interact. One day
they may connect to a website via their PC, the next via their
smartphone or iPad. The range of devices is expected to grow
as individuals increasingly turn to tablet and notebook devices,
as well as stream the Internet through their TVs, cars, and
home appliances.
Consumers also interchangeably use different channels to
make purchases. “They might conduct research online before
going into the store, or stand in the store reading online
reviews through their smartphones. They might come into the
store to see a product in person, but then go home and order
it online. Or they might place an in-store order against an extended assortment, but have it delivered at home. They might
even place an online order with you while standing inside a
competitor’s store,” writes Kasey Lobaugh, principal, Deloitte
Consulting.1
As the pace of technology has increased, so have consumers’ expectations for a fast, seamless experience, whether
they’re in a store, dialing into a call center, or interacting at a
company’s website. In addition, they expect a similar brand
experience as they jump from one channel to the next. For
example, if one sales promotion is shown at the company’s
website, consumers presume that same promotion will be
available in the store.
→→ They visit a store to evaluate products and then in the
comfort of their home, place the order from their PC or
mobile phone.
Print
POS
Website
Social Media
Customer
Mobile
Call Center
TV
How to Adapt to Changing Consumer Behaviors
3
The Benefits of an Agile
Commerce Strategy
The primary goal of implementing a true cross-channel strategy is
to increase revenue and customer loyalty. And when organizations
do it right, they’ll see a fast return on their investments.
A cross-channel commerce platform can affect sales and profitability, as well decrease expenditures.
Increasing Sales and Profitability
Improved customer satisfaction leads to greater retention and
sales. By offering multiple touch points, customers are more likely
to re-engage with the brand. In terms of revenue, a recent study
by Forrester Research reveals that multi-channel customers are
worth five to six times more than single-channel customers.5
Retailers can create customized shopping experiences in their
stores. For example, they can enable customers to read product
reviews and information right at a POS online terminal or through
their mobile devices. Retailers can also guide them through the
shopping experience, offering customer reviews, recommendations
and customer service.
In addition, a single commerce platform enables businesses to
identify new sales opportunities. Being able to see customer behaviors across all touch points allows the organization to identify gaps
or areas for improvement, emerging revenue areas, and cross-sell
and up-sell opportunities.
Decreasing Expenditures
Inventory is another area that benefits by having a cross-channel
strategy. When enterprises can view stock levels across all channels, they are able to improve churn, reduce waste and better control the supply chain. In addition, businesses can optimize inventory
and merchandising decisions based on cross-channel demand.
Moving to a single commerce platform across all channels also
reduces technology and IT support costs. By integrating call center,
mobile, Internet and in-store customer touch points, a unified
e-commerce platform lowers the overall cost of ownership versus
single application deployments for each channel.
Furthermore, satisfied customers are loyal customers. A superior
experience across multiple channels – including personalization
and advanced service options – will not only improve communications with customers, it will also enhance their perception of the
brand and its offerings, increasing the likelihood of repeat business.
In addition to the benefits of improving sales and decreasing costs,
there is a significant “soft” or less tangible advantage: agility. Having insights across the organization allows the business to flexibly
respond to changes in the market, and improve its own time to
market with new products or at emerging touch points.
Some possibilities to realize an agile commerce strategy
Implementing a single commerce platform across all channels
opens the door to new interactions and experiences for your
customers. Here are some possibilities:
▪▪ When scanned, a mobile barcode on a print catalog
takes the customer to a special product landing page for
additional information or to buy the product.
▪▪ Consumers can make their purchases using any type of
payment, whether they’re buying online or in the store,
and they can make returns or exchanges either at the
store or via an online form.
▪▪ A consumer can click a personalized text message on
her smartphone to digitally redeem a promotional offer
online or at the POS terminal.
▪▪ They can see if the item is in stock at their nearest
store, then use “click and collect” options—buy online
and pick up at the store.
▪▪ Order and delivery status alerts are sent automatically
to the customer’s mobile phone after an order is placed.
▪▪ In the store, shoppers use point-of-sale (POS) terminals
to order items and have them sent to their homes. They
can even buy products that are out of stock at the store,
but available online.
▪▪ When the consumer reviews a product online (it doesn’t
have to be in his shopping cart), he gets a personalized
recommendation for other complementary products.
▪▪ A call center agent can see a customer’s entire shopping and communications history to quickly resolve
problems or offer suggestions for other products.
▪▪ At the store, an individual can use her mobile phone to
scan a near-field communications (NFC) tag on an item
that she might want to buy and, for example, get laundry
instructions for clothing or product recommendations.
▪▪ Fans of the company’s Facebook page can receive a
special offer for a newly launched product, which can be
redeemed in the stores or online. Or they might automatically be offered a product from the brand they like
on Facebook when visiting an online marketplace.
How to Adapt to Changing Consumer Behaviors
4
Concerns and Challenges
of Implementing an Agile
Commerce Strategy
It’s critical for businesses to not only recognize these shifting
consumer behaviors, but also adapt their commerce strategies
to meet new customer expectations. Not doing so runs the risk
of losing customers or missing new revenue opportunities.
Many organizations have developed strategies that address
mobile, social, online, and in-store customer experiences.
However, they are often disjointed and separate efforts. For
example, individual business units often conceptualize and
create a customer touch point or channel – such as a Facebook
Fan page – and as an afterthought, integrate it into the enterprise technology environment, rather than using a common
commerce platform across all touch points.
Also, there are often different approaches to front- and backend business processes and technologies, including supply
chain, inventory management, customer engagement, and
sales. It can be difficult to integrate all these processes across
the enterprise, let alone try to glean accurate customer insights from them.
Companies that forget to consider their customers’ needs,
or that don’t have the ability to track, measure, and analyze
customer behaviors across touch points, will lose significant
business opportunities like:
→→ Increasing brand loyalty and sales. With an agile commerce strategy organizations could influence customers
in their buying journey on every touch point, keep the customer dialog alive and enable individuals to easily move
among touch points, staying with their brand regardless
of the channel. A consistent experience across multiple
touch points—including personalization, advanced service
options, integrated call centers, and interaction via new
touch points such as smartphones, iPads or any other
Internet-enabled device—would improve communications
with customers and lead to additional sales.
→→ Enhancing the shopping experience. Consumers today
have many choices. A company that offers a superior
customer experience across relevant touch points, empowers store personnel and leads with innovative Point of
Sale concepts like click&collect, POS terminals or mobile
shopping assistants is most likely to win the business.
Despite knowing these business opportunities, many organizations have concerns about implementing an agile commerce
strategy. At the top of their list are disparate systems, lack of
time and resources as well as lack of optimized content.
However, there are agile commerce solutions available today
that minimize operational expenditures and that can be easily
implemented across the enterprise.
Another source of anxiety is around the allocation of staff
resources. The implementation of any new technology requires
staff restructuring. But in the case of an agile commerce strategy, there are many opportunities for greater efficiencies. By
implementing a single commerce platform across the organization, IT departments can streamline processes and tasks,
freeing IT employees to focus on further process and system
optimization.
Business executives may also fear that a move to an agile commerce strategy will sacrifice in-store sales to online and other
channels. However, the risks of store sales being cannibalized
by other channel efforts are quite low and outweighed by the
positive multiplication effects of an agile commerce strategy.
Cross-promotion across touch points can actually increase revenue opportunities. In fact, consumers may be more inclined
to make in-store purchases of products they have reviewed
online first. A January 2011 study by ECC Commerce has found
that 33.5% of retail store sales are first based on information
searches on retailers’ websites – meaning that the Internet is
complementing and encouraging traditional store sales.2
Some organizations have expressed a concern that crosschannel commerce is overhyped, and are uncertain whether
there will be an ongoing need for such a strategy. Brian Walker,
principal analyst at Forrester Research, Inc., puts this concern
to rest. He writes: “In the near future, we won't be surprised
to find customers waving [near field communications]-enabled
smartphones across interactive display ads and products so
they can transact immediately on their mobile phones, add an
item to their online cart or walk into a store or branch with the
resulting offer – following a map on their phone.”3 This is just
one example of how a successful connection of touch points
might look.
Finally, there are businesses that would prefer to take a
“wait and see” approach before adopting an agile commerce
strategy. But as Walker explains, agile commerce strategies
are a reality: “It’s time for organizations to leave their channeloriented ways behind, and enter the era of agile commerce
– optimizing their people, processes and technology to serve
today’s empowered, ever-connected customers across this
rapidly evolving set of customer touch points.”4
How to Adapt to Changing Consumer Behaviors
5
How to Prepare for Agile Commerce
It’s critical to move forward now. New customer touch points,
such as shopping via TV, will be realized in the next few years.
The first step: Organizations must understand their customers
and how they use different touch points. Armed with an integrated view of customers, companies can personalize promotions,
pricing, merchandising, and engagement programs, which will
drive up customer loyalty and satisfaction.
Other actions that should be kept in mind when considering a
cross-channel strategy include:
Organizations that deploy a cross-channel commerce platform
can take advantage of all its benefits – including increased
revenue opportunities, lower operational costs, availability on
all existing and emerging touch points and, the most critical, an
optimized customer experience.
As Walker explains, “The customer is now at the center, and
delivering relevant content, commerce and service are the keys
to delivering on the new reality.”7
→→ Be able to support unified business processes and data
management.
→→ Sync business and customer intelligence (CRM, Web analytics, business intelligence applications, data warehouses) to
drive relevant customer interactions.
→→ Ensure that front- and back-end systems talk to each other
across all channels.
→→ View the customer relationship across all touch points, including Web, mobile apps, email, call center, stores, tablets,
social media, and interactive advertising.
→→ Review and potentially restructure team models and consider new job roles.
→→ Use point-of-sale data for demand planning.
→→ Use assortment goals and merchandise planning across all
channels.
→→ Give customers choices to make purchases, exchanges, and
returns via the channel of their choice.
→→ Deploy buy-anywhere, fulfill-anywhere methods for uniform
customer fulfillment.
To tie all this together, organizations should implement a crosschannel platform to create a true agile commerce environment.
“e-Business executives will need to invest in systems that can
deliver highly dynamic, personalized content to customers, such
as leading e-commerce platforms,” writes Walker.6
Kasey Lobaugh, “The Future of Retail: Cross-Channel Retail Transformation,”
Deloitte Debates, 2010. www.deloitte.com/view/en_US/us/Insights/Browse-by-Content-Type/deloitte-debates/fe02eee937bf7210VgnVCM200000bb42f00aRCRD.htm
2
Adrian Hotz and Sonja Strothmann, “Multi-Channel for Cross-Channel: Consumer
Behavior in Transition,” ECC Commerce, in cooperation with hybris GmbH, Jan 2011.
3
Brian Walker, “Why Multichannel Retail is Obsolete,” Forbes.com, March 14, 2011.
www.forbes.com/2011/03/11/multi-channel-touchpoint-leadership-sales-leadership-obsolete.html
4
Brian Walker, “Why Multichannel Retail is Obsolete.”
5
Brian Walker, “Welcome to the Era of Agile Commerce,” Forrester Research, Inc.
report, March 11, 2011.
6
Brian Walker, “Welcome to the Era of Agile Commerce.”
7
Brian Walker, “Why Multichannel Retail is Obsolete.”
1
An effective platform will unify efforts across all channels. The
right solution is flexible, expanding to fit the organization’s needs
and market changes. It should easily adapt to business processes, and integrate seamlessly into existing IT infrastructure.
About hybris, an SAP Company
hybris helps businesses around the globe sell more goods, services and digital content through everytouchpoint, channel and device. hybris delivers
OmniCommerce™: state-of-the-art master data management for commerce and unified commerce processes that give a business a single view of its
customers, products and orders, and its customers a single view of the business. hybris' omni-channel software is built on a single platform, based on open
standards, that is agile to support limitless innovation, efficient to drive the best TCO, and scalable and extensible to be the last commerce platform companies
will ever need. Both principal industry analyst firms rank hybris as a “leader” and list its commerce platform among the top two or three in the market.
The same software is available on-premise, on-demand and managed hosted, giving merchants of all sizes maximum flexibility. Over 500 companies have
chosen hybris, including global B2B sites W.W.Grainger, Rexel, General Electric, Thomson Reuters and 3M as well as consumer brands Toys“R”Us, Metro,
Bridgestone, Levi's, Nikon, Galeries Lafayette, Migros, Nespresso and Lufthansa. hybris is the future of commerce™. www.hybris.com | [email protected]
Version: October 2013 Subject to change without prior notice © hybris
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Changing
Consumer
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