Commerce is getting the red carpet treatment. Gone are the days where commerce was just the unassuming back office system which kept records on customers and products. Recent events such as the acquisition of eCommerce provider Hybris by SAP and UK software juggernaut Sage’s new focus on driving online sales illustrate the commerce boom in this brave new world.
To explain the latest e-commerce market moves we need to explain the changing behaviour of the consumer and businesses alike. Today, software is bought on the customers’ own terms and individual customers have the ability to buy with just one click.
Contracts are dependent on the wishes of the buyer too, whether it be on a trial then subscribe basis or through 12 month rolling contracts. The behemoth contracts of yesteryear, where the biggest tech companies made a lot of money because customer were scared to use anything else, are no more.
Where customers learn about new products and buy from has changed too. Platforms such as social media, blogs and mobile provide new ways for consumers to interact with software providers. Before a purchasing choice is made, the buyer learns about a business indirectly through mediums like peer reviews and social media at least 10 times and this thirst for knowledge turns customers into savvy empowered pro-sumers.
The fact is, software providers are not selling to markets as a collective anymore, they are selling to the individual. We call this concept ‘B2i’, (Business to Individual).
Essentially the hype of ‘Big Data’, coupled with nascent technology such as cloud and mobile is forcing businesses to rethink their Commerce offering. These innovations give businesses the precise knowledge about the individual customer they sell to and they would be foolish if they do not use this.
The buyout and integration of Lexity by Yahoo recently showed the rapid growing need to combine the expertise of B2B and B2C markets and be able to turn Big Data into ‘Smart Data’. Global businesses are in a race to gain better insight into their markets than that of their rivals.
Transforming commerce platforms is not as easy as it seems and businesses are under time pressure to execute this. With tighter budgets, these businesses are asking themselves which platform will deliver the best ROI?
To date, software vendors rely on a plethora of technology to manage the Commerce process – from processing orders, direct online or via partners managing transactions or billing, all the way to linking front and back office systems.
According the Constellation Research, on average, a company uses 33 systems to process one order; a hindrance which explains why businesses are slow to catch on to a customer’s needs. Many do not know where to start when rebuilding their commerce program.
Within commerce, payment methods are increasing by the week. In the UK, we are even witnessing payment by face. PayPal app users can walk into shops and pay for products using their smartphones, facial features is used to authorise the payments so businesses can check if the buyer is really who they say they are. This is an interesting trial and I am eager to see if it catches on in the software world, but it does show innovation within commerce.
Looking at the future of commerce, security will be a key an issue platforms need to address. Data is virtually everywhere, businesses must promise to customers that their data is safe and cannot be accessed by other parties. Payment by face increases the risk of identity theft if hackers get through PayPal’s security. So have a policy and be transparent to customers about how you are going to use the data and do not compromise on safety.
Today, the power lies with the customer. They can chop and change contracts, buy from anywhere and businesses need to be aware and act on this. New ways of consuming through smartphones and facial payments will only increase. To move forward, businesses must find a way to get rid of the information silos and focus on the customer as an individual.