Sitecore CEO Steve Tzikakis believes building trust with customers is essential for brands wanting to take a bigger share of the commerce pie, particularly as the end of the cookie and consumers’ desire for privacy and personalisation make first-party data ever more important
After over a year of change in retail and ecommerce, the Christmas period is fast approaching. Ecommerce is set to play a greater role than it ever has before. But companies need to prepare now in order to meet the demands of the holiday period.
Digital commerce has reached the point of no return, where brands can no longer ignore it, no matter their size or main selling channel. That’s the view of Sitecore CEO Steve Tzikakis, who points to the accelerated growth of ecommerce over the past 18 months as a reason why the balance will have shifted even once physical retail returns in full.
Indeed, for the Christmas shopping period, Sitecore’s research has found that shoppers are already turning to online portals – and will continue to rely on ecommerce – to complete their holiday shopping.
Data from the Office for National Statistics bears out the shift to digital. In 2019, before the pandemic, online accounted for 19.2% of retail sales in the UK; last year it was 27.9%. The proportion has fallen back a little this year as the economy slowly reopens, but McKinsey estimates that the industry’s growth has accelerated ahead by at least five years due to Covid.
“The extended lockdowns and the pandemic really accelerated what’s happening in the marketplace. We feel strongly that we are at a point of no return. Although physical locations are opening as more people are vaccinated and global travel resumes, ecommerce penetration versus physical commerce will continue galloping away,” says Tzikakis.
That has caught many brands by surprise. There are many well-known brands that still do not enable digital commerce, with more still that do not have the capacity to deal with this increased demand. This is a problem because consumers now expect a seamless experience wherever they want to shop, but most brands are not yet set up to meet these expectations.
To do this, they need to own the relationship. Yet the majority still rely on third-party data, despite a rapidly approaching cookie-less world that will make having first-party data of vital importance. A survey of marketers conducted by Sitecore found that just 44% plan to invest in first-party data, while 68% are investing in experience and 87% in artificial intelligence (AI).
Tzikakis suggests that even among those investing in first-party data there is a misunderstanding about why. Rather than doing it simply to conform to legislation such as GDPR in Europe, it is key to building trust among consumers online.
“[In physical retail, building trust] is easier. I turn up on the high street, walk in, buy something and give them my credit card – that’s trust. But can I trust a retailer on a digital platform? And who gains a piece of that trust pie? Is it the established brands, who have a head start but might not yet have a good digital experience?” he asks.
“Our interpretation is that consumer expectations, for the first time, are ahead of what brands can offer. This is the critical gap we try to bridge with our clients. Acquiring customers is expensive, retaining customers is expensive, because you have to build that trust. The trust bucket fills up drop by drop, but you can easily kick the bucket over and then you’ve got to start again. That’s a painful and costly process.”
Sitecore focuses on three areas – content, experience and commerce – that it believes are key to building a best-in-class digital and omnichannel experience. It is aiming to disrupt an industry that remains fragmented, with no one offering an integrated suite that can offer the full range of services marketers and brands need.
“If you look at an X-ray of the companies that dominate the commerce industry, you will see that virtually none of them have the capability to fully understand every dimension of a customer in a modern, integrated platform ‚” says Tzikakis. “We’re a disruptor in this industry. This is an industry with a lot of architecture, and we decided to take it by storm.”
At the start of 2021, Sitecore secured backing for a large-scale growth plan fuelled by $1.2bn (£860m) in investment. It has already made three acquisitions – of marketing automation platform provider Moosend, customer data platform Boxever and Four51, which delivers B2B and B2C commerce experiences for enterprise brands.
It is also “doubling down” on its global presence, investing heavily in key markets including the UK and US, putting money behind its brand and accelerating innovation. “We’re leading the charge from a position of strength,” says Tzikakis.
The opportunity here is to be able to provide customers with a frictionless experience online and offline. However, because customers do not yet fully trust digital commerce and brands have been slow to see the benefits of first-party data, the digital experience is lagging because consumers don’t always want to share their information. Tzikakis says digital experience has provided a window of opportunity for brands wanting to gain a bigger market share.
The upcoming Christmas period will be key for that. Sitecore research found that 83% of UK marketers describe Christmas 2021 as make or break, yet only a quarter are prepared for it, even though 20% of shoppers are already browsing for gifts.
Delivering an excellent customer experience will be critical. Some 71% of marketers say they are trialling subscription-based engagement, 62% are optimising the supply chain through AI, 61% introducing virtual services and 57% improving customer service through tools such as chatbots. Almost a third (29%) plan to start selling to customers via their websites for the first time in a bid to engage with customers directly and build brand loyalty.
For Tzikakis, there are important areas brands need to focus on. First is embracing a real-time customer data platform, second is having a good content foundation, third is making it easy to buy and fourth is experimenting and optimising. But he does not believe there is a one-size-fits-all approach marketers can take, adding that brands that work with Sitecore benefit from tailored strategy and technology.
“Every marketer follows a strategy they believe is right for their business, so we don’t come in like a bulldozer that wants to change everything. We keep what you have that’s good and add in some areas to bridge the gap between you and your consumer,” he says.
Every business approaches its audience’s needs in a different way. Applying universal strategies won’t build an individual company’s brand in a meaningful way. Brands should examine their platforms and optimise them in a way that best suits their corporate objectives. With a tailored approach, they can generate greater customer loyalty in the long term.
Tzikakis adds, “The technology is there as long as marketers, digital officers and CEOs have the appetite and drive, and can see what’s coming. But one thing is for sure, the experience has to be first class because this affects every part of a business.”
If retailers are able to achieve this, they will be able to generate greater customer loyalty and retention throughout the hectic and demanding Christmas shopping period.
For more information please visit www.sitecore.com