Infosys has released a new report, Digital Commerce Radar 2023: Capabilities and practices of the future. According to the report, Digital commerce is showing no signs of losing steam. After booming in 2020-2022, growth returned to near pre-pandemic levels.
Now, though, with, global inflation reaching a 15-year high of 8.8% in 2022, digital commerce growth is in peril. Infosys Knowledge Institute research found that to retain and increase customers, companies need to go beyond high-quality products at competitive prices and back them with superior digital experiences.
Infosys undertook a global survey of 2,500 companies across 12 industries and analysed the practices behind exceptional digital commerce outcomes. The study considered 38 digital commerce capabilities across five stages of the customer journey. Areas covered included discovery, evaluation, purchase, after-sales, and continuous engagement.
Infosys also examined critical aspects of digital commerce operations. Organisation structure, technology architecture, analytics, payments, system integration, and desired goals or outcomes.
The research found the necessary ingredients for optimal digital commerce are personalisation, a flexible foundational architecture, and leadership involving sales and technology teams.
Get personalisation right
Infosys analysis indicates that the more digital capabilities a company implements, the better it performs on strategic, operational, customer, and financial outcomes. However, each capability impacts only a few specific business outcomes. This makes it critical to understand what capabilities actually help them fulfil their goals.
Two personalisation initiatives greatly improve performance:
(a) personalised offers and pricing
(b) personalised customer service and context persistence across channels.
These capabilities increase a company’s likelihood of reaching the top-performing quartile performance by 13%. However, only a minority have implemented them — 18% have personalised offers and pricing, and 39% have personalized customer service.
For personalization to succeed, companies need to build a strategy for personalization, implement the technical pathways, and establish KPIs for success. Personalization requires both tech- and business-centric leadership.
Rethink eCommerce leadership
Infosys data indicates that companies where digital commerce sits under chief revenue officers (CROs) or sales officers (CSOs) perform better. However, just 5% of surveyed companies have this organizational structure, while 38% have technology leaders driving digital commerce.
Currently, customer-facing leaders do not determine the vision for digital commerce capabilities like personalisation. However, the research found that leaders such as chief marketing officers (CMOs), CSOs, and CROs, who focus on delivering value to customers, should help drive digital commerce strategies. As customer-centric capabilities increase in importance, this misalignment in leadership will create a bigger deficit in digital commerce performance.
Shift to microservices and API-first
The research also found a shift toward microservices-based and Application Programming Interface (API)-first architectures. The shift facilitates third-party integrations and provides the flexibility to handle continuously evolving technology and customer preferences. 51% of the companies surveyed have already adopted microservices-based and API-first architecture in some form. Around 95% plan to do so by the end of 2024.
Monolithic digital commerce platforms continue to be effective. Fewer companies, however, consider them because they are less adaptable to new capabilities. These traditional platforms include fully customised all-in-one solutions and monolithic systems with predesigned features. In contrast, microservices and API-first capabilities give companies the flexibility they’re looking for. Open stack enables businesses to build their own microservices or integrate third-party microservices through APIs.
Practical recommendations
The report provides practical recommendations for enterprises to adopt, including:
- Evaluate your digital commerce organisation and initiatives to align with best technology and practices.
- Companies need to rebuild their digital commerce initiatives to align with their goals. This requires a holistic review of six aspects — organizational structure, technology architecture, digital capabilities, system integration, payments, and analytics.
To effectively sail through the ongoing wave of digitization, Infosys recommend businesses take the following actions:
- Implement more capabilities.
- Prioritise personalisation experiences.
- Integrate sales and technology leaders.
- Adopt microservices and API-first architecture with open-stack integrations
Enterprise Times: What this means for business
eCommerce priorities are shifting. Infosys research reveals that financial prudence will overtake customer-focused outcomes this year. With the backdrop of the Russia-Ukraine war, disrupting supply chains, and weak economic growth, companies are prioritising reducing costs.
Enterprises are looking to reduce the costs of customer acquisition, delivery, fulfilment, returns, and other digital commerce operations. This shift toward financial outcomes may make sense when you consider that companies face record inflation.
However, remaining customer-focus and having a finger on the pulse of customer needs should remain paramount. Enterprises in sync with their customers traditionally have lower customer acquisition. Customers are less likely to return products or add fulfilment wastage if product content and data are clear and concise.
Technology is clearly the foundation of digital commerce. Infosys says its research shows that technology is more effective with business vision and customer insight. Businesses must bring sales, marketing, and technology leaders together to drive the best outcomes.
As Marc Cohen Chief Strategy Officer at Blue Acorn iCi said, “The customer-facing sales and marketing teams are responsible for brand and experience. They must know the difference between how customers are expected to feel and how they actually feel. Successful commerce programmes require a strong collaboration between these sales and marketing, and IT functions, with a higher ownership of the former in some better optimised scenarios.”
