What’s driving the evolving retail ecommerce landscape?
Kelly Goetsch, CPO, commercetools
Nik Gupta, CTO, The Hut Group
Sue Stephenson, director of ecommerce, Avon
Chanuka Weerasinghe, group CTO, Hawes & Curtis
Karl Wurm, MD EMEA & South America for ecommerce, Beam Suntory
In part due to the curveball thrown to us all in 2020, ecommerce has been going from strength to strength over the last couple of years. According to the 2022 Global Payments Report by Worldpay from FIS, the UK ecommerce market is projected to increase by nearly 26% between 2021 and 2025 to a whopping £260bn. Clearly, if retailers can get their ecommerce offerings right, there are huge gains to be made.
Yet getting it right in this increasingly complex digital world can be a challenge. It may be a cliche but the black swan events of the last couple of years have taught us that the only thing that’s certain is uncertainty. How can retailers navigate this effectively to stay ahead of the curve?
A catalyst for change
For international premium spirits company Beam Suntory, which before 2020 primarily sold products on a large scale to retailers, restaurants, hotels and bars, the pandemic was a catalyst for change. When Covid-19 hit, the company reacted quickly to scale up its relatively small ecommerce channel, developing an entirely new team to tackle the landscape created by the pandemic and meet growing online, including direct-to-consumer (D2C), demand. Seeing ecommerce as the future, Beam Suntory is keeping its foot on the investment pedal.
“We do not only want to fish where the fish are today, but we also want to fish where the fish will be in the future,” says Karl Wurm, MD EMEA and South America for ecommerce at Beam Suntory. “We feel everything is leaning towards ecommerce. Ecommerce is not only where consumers shop, but it’s also how consumers shop. And we want to, through ecommerce, build deep connections with our consumers… we want to learn from our consumers what they think about our brands and what they expect from our brands.”
Avon, a household name in the beauty industry whose reps were perhaps the original beauty influencers, has seen a similarly substantial pivot. Sue Stephenson, director of ecommerce at Avon, explains: “During the pandemic, the shift was quite dramatic in terms of encouraging our face-to-face reps to be active online. Empowering our reps who were used to relationship selling, to embrace digital, sell online and navigate the change of being unable to meet face-to-face with customers was quite a shift.
“It was also about providing access for our consumers; access for them to buy our products however they choose, not just face-to-face through the reps, which is what many were used to. It was really about offering customers a choice in how they wanted to shop.”
The tools for the job
Part of what’s making this all possible are new commerce technologies such as headless commerce. By allowing separation from the front end and back end of an ecommerce application, headless commerce offers a brand the flexibility to build and scale their offering however they want – picking and choosing the APIs (application programming interfaces) they need to create the best offering.
Kelly Goetsch, CPO of commercetools, a commerce platform built on modern MACH (microservice-based, API-first, cloud-native and headless) principles explains: “We’ve been doubling our business year over year. Ecommerce is everywhere, and headless commerce really is the default these days. It allows you to really engage with your end shoppers, and create those emotionally engaging, compelling experiences versus more of the cookie-cutter approach.”
With organisations undergoing such significant shifts, it’s no wonder that tech teams have been feeling the pressure. Not only is there an expectation to deliver but the competition for talent is fierce. Chanuka Weerasinghe, group CTO, Hawes & Curtis explains: “Hiring tech talent is something that has proved to be incredibly difficult, not just because of the flexibility or because companies are spending a lot more money than us. There are tech firms, SaaS firms, who usually attract the best talent out there. For retail, it is incredibly difficult.”
Cloud-based, headless commerce service offerings composed of APIs can be part of the solution here too. “We’ve actually had a lot of our customers get folks out of programming boot camps because the barrier to working with new technology is so low,” Goetsch says. “Anybody can consume an API. Anybody can write cloud function… We think by commoditising this and working with nice, clean APIs, it makes it a lot easier to hire.”
Joining up the dots
Nik Gupta, CTO, The Hut Group, agrees that the digital commerce space presents a huge opportunity, but also notes that traditional channels remain important for many organisations, providing opportunities to innovate and join up experiences. “We have to be mindful of enterprises who want to go digital-first, but also find it difficult to let go of traditional brick and mortar models to say, well, how can we help you go and meet your customers wherever they are? And it’s that which is driving some of the inflections of the challenges of the innovation in the space, which keeps it interesting.”
Goetsch adds: “We also see real omnichannel commerce actually happening for the very first time. It used to be that everybody had a digital channel and then a physical channel. And those are two pretty separate channels. Now, we’re seeing them collapse. And folks are using their commerce platform or commerce APIs as the point of sale system. We actually see real omnichannel commerce, which is amazing. So we’ve been talking about it for 20 years, and it’s finally here.”
With so many customer touchpoints – online and offline, on different devices, and across different markets – one of the biggest challenges is providing a consistent and excellent experience across all channels.
Wurm explains the challenge for large, established brands especially: “How, from a consumer perspective, can we make our brand as authentic as it can be? How can we ensure that the consumer always gets the same look and feel at each touchpoint? That is, I think, one of our biggest challenges for right now. And this is a more complex exercise for a company like us, versus those smaller startup companies, which are normally digital-first and are serving only one channel – direct to consumer.”
Stephenson adds: “There’s an authenticity and a need to ensure that, whatever the site is and whatever the platform, everything’s consistent. The customer experience needs to be consistent, however they choose to shop with you and in whichever market they choose to shop with you.”
To bring this all together, flexibility and the ability to adapt are key. Goetsch explains; “I’m a big believer that innovation requires iteration. And in many cases, it takes two, three, four, five iterations on a feature to have it generate revenue… being able to quickly get things out to production into shoppers’ hands is really important these days and allows you to iterate and therefore innovate.”
Facing the future
So where’s that innovation taking us next? While we’re not quite in the metaverse yet, the whole panel agrees that there’s huge potential for ecommerce to integrate with other aspects of the brand and of our lives. Weerasinghe foresees big developments in checkouts and payments: “We’re definitely looking at headless checkout systems where you can pay from the blog page, or some other third party publisher site you read, where one of our suits or dresses is featured. And then customers can buy from there and start their checkout journey from that point, which is just great. I’m excited to see where this is going.”
Gupta agrees, pointing to some of the other innovative integrations we’re now seeing across services, such as apps which act as a one-stop-shop, bringing together your social media, entertainment, online shopping and bookings. “I think commerce starts to become part of a wider value-added service offering, but how can retailers make use of that?”
Really, it’s taking the concept of meeting your customers where they are a step further. Gupta points to the possibilities of future streaming services where you can order an outfit worn by a TV character directly from the retailer. Or where product placement goes a step further, with the coffee brand featured in a show interchangeable depending on the viewer demographics.
Stephenson is seeing exciting changes at Avon, where they’re encouraging reps to be true digital entrepreneurs. “It’s a fantastic opportunity to be able to create content through live shopping. Social selling is really opening up their opportunity to be able to sell to their customers and reach new customers through all digital channels, exactly where the customer is.”
Similarly, Wurm agrees that one of the biggest things going forward is getting creative and harnessing situations where they know consumers are engaged. Beam Suntory’s successful experiential offerings haven’t always been directly linked up to commerce. “Our future direct-to-consumer model will allow us to leverage every interaction with consumers, for example, a highly engaging virtual or live distillery visit, for brand building and direct sales.”
Goetsch says it’s a really exciting time for retailers, who were once stuck with rigid all-in-one suites where it was incredibly difficult for them to integrate anything. With the development of niche APIs that have nailed one little bit of functionality – whether that’s coupons or gift cards – organisations have a real pick-and-mix. “As a business [you can now] go out and pick and build this catalogue of APIs from different vendors. And that never used to be possible. And that’s all because of modern technology.”
Stephenson agrees: “The whole headless commerce concept is brilliant in the fact that it allows you to pivot depending on what your customer is demanding, and depending on what life throws at you. Who knows if we’re going to be faced with another pandemic or anything as dramatic as that in the next five years! Things keep on changing, so flexibility and adaptability are key, as well as testing and learning on a continual basis. That’s the way forward, because you’re never going to get it right the first time.”
To learn more about driving the future of ecommerce, visit commercetools.com