October 24th, 2012 | 5 MIN READ

Navigating Ecommerce 2.0 and The New Consumer Reality

Written by Lisa Walker

I'm excited to introduce a new contributor to Get Elastic, Lisa Walker. Hailing from Bodog and Electronic Arts, Lisa is an ecommerce strategist focused on emerging business trends and technology. She is currently Product Marketing Manager at ElasticPath. In her free time she can be found studying humpback whales in Alaska. Welcome, Lisa! Industry pundits speak about the rise of a new consumer reality, defined by an anywhere/anytime/any device expectation of accessibility and engagement. Within this new reality, Ecommerce 2.0 strategists speak of the value of customer relationships as enterprises look for new and creative ways to monetize their offerings across an ever increasing number of digital touch-points. The Increasing Value of Customer Relationships But how do customer relationships drive a business? What strategies should be employed to learn more about customers' needs and behaviours in order to develop stronger relationships with them? Driving Business Transformation If traditional ecommerce is about forcing customers to a web store, and then forcing them to buy as much as possible, as quickly as possible, Ecommerce 2.0 is about identifying real customer demands, and then creating products and services that meet them across every touch-point, from websites and mobile apps to social networks, games, cloud services, and every other connected experience. In an environment where the trend is for consumers to increasingly rely on smartphones, buying behavior is informed by broad social circles of trust. The cloud increasingly contains more information and applications, and the explosion of data fueled from new sources is creating a tremendous opportunity for increasing customer interactions and fostering on-going conversations. As enterprises look for new and creative ways to monetize their offerings, this dialogue can be one of the most important sources of product ideas and development but belies the need for a social commerce strategy and a deep understanding of how mobile and web-based social networking systems work. The Rise of Mobile Apps Increasingly, mobile apps are transforming consumers’ expectations of what digital experiences should be. A case in point is evidenced by the rapid rise in popularity of music creation apps, such as Khush Inc’s Songify, which successfully exploits the inherent social nature of the digital world by allowing users to turn spoken word into music and then save their songs in the cloud where they are reviewed by those in the Songify community. As content is shared, individuals with similar interests converse and connect, effectively generating the brand’s ecosystem and social network. Offered as a free download, the app has attracted a loyal customer base of over 12 million people from which sustainable and recurring revenue is generated by offering additional paid content and capabilities via in-app purchases. As the user base increases, so does the opportunity to use the app as an effective cross-selling vehicle for other revenue-generating offerings. Music apps aren’t the only ones adopting this model. As Business Insider states: “Two thirds of the highest grossing iPhone apps — the ones that generate the most money from iTunes — are completely free to download." Beyond freemium, successful paid apps can potentially double their revenue by offering in-app commerce for premium upgrades. Traditional brick-and-mortar companies are also moving into the digital domain to take advantage of communities which can be built around mobile functionality and location based services. Starbucks’ offering of payment via smartphone app means customers will no longer be anonymous coffee drinkers. Starbucks will know their preferences, location and time of visit. Combined with check-in via social gaming app Foursquare, Starbucks can offer even more targeted deals and reward frequent customers with entitlements such as “Barista Badges." “With an arsenal of digital tools to build even more lasting relationships with customers [Digital] has been an essential part of how we build our brand and connect with our customers… there’s been such a seismic shift [in our interactions with customers] that we needed to pull it all together and make it a priority,” says Adam Brotman, chief digital officer for Starbucks Coffee Company “We’re trying to be incredibly good at listening and data mining.” From an Analytics Perspective To be successful in this new digital economy, enterprises need to understand as much about the customer as possible. Whether tracking movements and purchases across the physical and digital world, or guaranteeing seamless entrance into a social based ecosystem, all customer data points should be exploited and explored: from sensors in shoes, geolocation via mobile, to programming choices via digital PVRs. From an analytics perspective, having accurate and timely access to information as a basis for making business decisions is essential. To achieve mastery when devising a big data strategy, enterprises need to architect their back end for maximum flexibility and fluidity so that data can be consumed and interconnected through various systems. This means the content management system needs to talk to the ecommerce platform, which needs to talk to analytics, which also needs to talk to ERP– all in real time. From a Technological Perspective From a technological perspective, back-end platforms will need to support growth and rapidly evolving business models. Developers will need to be able to create new capabilities as new opportunities and commerce touch-points emerge. Today, it’s smartphones and game consoles. Tomorrow, it’s heads-up displays on Google glasses and ski goggles. Existing architecture will need to rapidly scale to meet the explosion of data points and the rise of event driven architecture. Open interfaces, rather than heavy integrations will be essential to handle the complexity of the multiple connections demanded by the digital ecosystem as will strong APIs to handle the increasing push and pull of content from multiple touch-points as new levels of possibilities emerge. Business Perspective From a business process perspective, collaboration is essential. Integrating tasks, activities and processes across marketing, analytics, merchandizing and IT will be essential as will fostering a much closer relationship between business visionaries and technical architects. Enterprises should expect a revolution in internal processes and decision making trees as business users become co-drivers in technology selection and implementation. Enabling Rapid Business Transformation At its core, Ecommerce 2.0 is all about finding people who believe in your products or services and learning to anticipate what they want in an effort to boost customer loyalty and lifetime value. As social networking and mobile applications increasingly becoming a part of daily life, the resulting data gives valuable insight into understanding what drives customers’ buying behavior and what businesses must do to convince them their product solves their needs. As the meteoric rise of music apps and successful transition of Starbucks to the digital world shows, once you know your customer, you can own your customer – and if you architect your technology and processes to scale, true business transformation can take place.

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