Building a Customer-Centric Digital Transformation Strategy in eCommerce

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As the industry rapidly evolves, a customer-centric approach becomes the heart of an e-commerce transformation. Building a customer-centric digital transformation strategy in eCommerce is non-negotiable with the increasing competition and varying customer demands. While steering the business path may seem like the realm of marketing or operations professionals, in the e-commerce realm, it’s the technology team that holds the reins of the virtual domain.

Keep in mind that the following steps shouldn’t always have to be followed in that order. Depending on your business nature, you can adapt them accordingly.

Step 1: Understanding Customer Needs

The first step to perfecting an eCommerce platform is building one that meets the needs of a selected audience. According to the US Bureau of Labour Statistics 20% of new businesses fail during the first two years of being open and 45% during the first five years. eCommerce platforms are no different to regular brick-and-mortar stores, but they cater to vast markets, this is why understanding the market and ensuring product-market fit is equally crucial, Demographically, geographically, behaviourally and psychographically, which require complex strategic development in order to execute a business plan.

Step 2: Establishing an Omni-Channel Experience

Today’s customers expect a seamless, consistent experience across all channels, whether they shop online, in-store or via mobile apps. This omnichannel approach requires businesses to integrate their systems and processes to provide unified access to customers, allowing them to pick up where they left off, regardless of any channel they use. As per a study done by Harvard Business Review, omnichannel shoppers spend 10% more when purchasing online.

By leveraging data and analytics, businesses can gain valuable insights into customer behaviour, allowing them to personalise the shopping experience and anticipate customer needs, in return, this helps them increase Customer Lifetime Value (CLV) of individual shoppers.

While you establish your Omni-channel experience, it’s vital that you know the CLV of your customers too. Finding the exact amount a customer would spend on your store is not a practical task. However, your existing data may be able to set you in the right direction.

Here’s a formula to measure your e-commerce business’s CLV more easily.

Customer Value = Average Purchase Value x Average Number of Purchases

Customer Lifetime Value = Customer Value x Average Customer Lifespan

Step 3: Serving Customers through AI, Chatbots, and Virtual Assistance

No technology navigates the sales funnel better than AI and AI powered Chatbots. The e-commerce industry is one of the largest industries that uses Artificial Intelligence for end-to-end sales automation. Unlike physical selling, e-commerce purchases take place online, making the entire sales funnel complete within the virtual frame. Today, Blockchain technology and Web 3.0 are also set to pave the way for e-commerce, strengthening their security, transparency and efficiency.

AI, chatbots and virtual assistance play a crucial role in enhancing customer service in e-commerce as well. These technologies enable businesses to provide 24/7 support, answer customer inquiries in real time, and make personalised product recommendations. By making use of AI and machine learning, businesses can automate routine tasks, such as tracking orders and processing returns, allowing human employees to focus on complex work and be more strategic.

Major e-commerce giants like AliExpress and Amazon have implemented AI virtual assistants to communicate and carry through refund and return processes.

Here are top use cases of AI in today’s e-commerce industry.

Out of the above, the most prevalent are Lead Generation bots. External Point of Sale bots facilitate the entire customer purchase journey within an external app such as Messenger eliminating the need for customers to exit the app to visit the e-commerce site, thereby ensuring convenience and customer satisfaction.

Using Virtual Assistance, not only improves operational efficiency but also leads to higher customer satisfaction and loyalty.

Step 4: Implement Social Commerce and Multilingual Voice Commerce powered by Machine Learning

The e-commerce industry is becoming increasingly competitive, attracting a large number of buyers every year, with the potential to expand globally through various social media platforms where advertisements and offers are promoted. Social commerce means to be present with customers where they spend most of their time.

In e-commerce, good integration of social channels and touchpoints is crucial. Although automation has boosted the e-commerce industry in recent years, it also has its drawbacks. Automated information systems on the front end lacked personalization, and the inability to customise responses created confusion in serving customers.

This is where NLP and Generative AI come into play, making e-commerce selling more customer-centric and personalised. Nowadays, e-commerce platforms utilise Generative AI to make automated responses more meaningful and effective.

Additionally, voice commerce, powered by virtual assistants like Alexa and Amazon’s Google Assistant, allows customers to make purchases using voice commands.

According to Forbes, 57% of online shoppers say they shop internationally. If your e-commerce platform can support native-speaking foreign customers with multilingual voice commerce, it will provide a significant advantage.

By embracing these emerging channels, businesses can create more convenient and personalised shopping experiences, ultimately driving higher conversion rates and revenue.

Step 5: Secure your Platforms

ECommerce businesses collect and store large amounts of customer data, which is why it is important to ensure data security and privacy. Data breaches and privacy violations can have serious consequences. To stay safe, businesses must implement strong data security measures.

Apart from this, compliance with data protection regulations, such as GDPR and CCPA, is quite crucial too. By prioritising security and data privacy, businesses can build trust with customers and reduce the risk of data breaches.

Here are a few things you can look into;

  • Use Secure Protocols such as HTTPS to encrypt data in transit between the user’s browser and the server. This ensures that sensitive information, such as credit card details, is protected from interception by cybercriminals.
  • Regularly Update Software operating systems and web servers. This ensures that any security vulnerabilities are patched, reducing the risk of cyber attacks.
  • Use Strong Passwords that are difficult to guess. This helps prevent brute-force attacks.
  • Implement Firewall Protection to block unauthorised access. Every e-commerce site should implement firewall protection to secure its platform.
  • Backup Data Frequently so in case of a worst-case scenario, you can quickly restore the platform to its previous state. Backups should be stored securely in an offsite location or in the cloud.
  • Monitor for Suspicious Activity such as multiple failed login attempts. This helps detect potential cyber-attacks and allows you to take necessary action.
  • Conduct Regular Security Audits either internally or through third-party firms to identify potential vulnerabilities and ensure that their platform is secure.

Additionally, you can;

  • Encourage customers to implement Two-Factor Authentication to add an extra layer of security to the login process by requiring users to provide a second form of authentication. This helps prevent unauthorised access to their accounts.

Case Studies: Contingency Planning and Smart Technology Innovation

Learnings from Harvey Norman Black Friday

Forbes says, “If you’re an online retailer, it’s important to step up your game on Black Friday. In 2022, $9.12 billion was spent on Black Friday in 2022—more than the $5.3 billion that customers spent on Thanksgiving and $3.14 billion they spent on Veterans Day that same year.”

The Harvey Norman Black Friday Sale in 2023 crashed suddenly at its highest peak of traffic, leaving visitors stranded on the site. They were asked to ‘Keep this page open and it will automatically refresh when your turn comes’.

But there were thousands of potential shoppers in the queue and most of these shoppers instantly switched to other Black Friday Sale platforms including JB Hi Fi, Bing Lee, The Good Guys, AliExpress and Amazon. Why? Because they are all offering Black Friday deals.

And if a visitor does manage to get in, they are being told that “Once you’re in, you’ll have 10 minutes to access the website”.

The eCommerce industry has seen its fair share of disasters, where technical issues led to a significant disruption in the customer experience. This is why prioritising contingency planning and smart technology innovation is important. In the case of Harvey Norman’s sale, the lack of infrastructure of the platform couldn’t endure the sudden heavy traffic. This is quite common in e-commerce software, but not having a contingency plan may have caused the biggest loss of revenue. Contingency planning involves preparing for potential disruptions, such as increased website traffic during peak shopping seasons, and having backup systems in place to minimise the impact of any issues that may arise.

In order to ensure breakdowns happen less frequently, Smart technology innovation, including the use of AI and machine learning, can help businesses predict and prevent potential issues that would cause scenarios such as the Harvey Norman Black Friday Sale.

In conclusion

Building a customer-centric digital transformation strategy in e-commerce requires a holistic approach that prioritises customer needs, leverages emerging technologies, and ensures data security and privacy. By embracing these key elements and learning from past e-commerce disasters, businesses can create more engaging and personalised shopping experiences, ultimately driving higher customer satisfaction and loyalty.

By drawing insights from industry resources and real-world examples, businesses can gain a competitive edge and position themselves for long-term success in the ever-evolving e-commerce landscape.

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