Marketers are beginning to realize that digital commerce is an essential, not an ancillary, part of doing modern business. Growth and retention in the modern business landscape both require a sophisticated commercial infrastructure, and Gartner reported that marketers are spending more on that than on digital advertising for the first time ever.
The 2019 Digital Commerce Trends for Marketing Leaders report found that marketing decision makers now spend 9.2% of their total budgets to digital commerce. This is 1.1% higher than 2017, and digital commerce is now the number one marketing investment, beating out digital advertising.
This increase corresponds with another report from Gartner showcasing that 62% of marketing decision makers are actively creating digital transformation programs for their companies. In order for the investment to work, however, businesses must have the appropriate capabilities and tools to “activate” the transformation.
The Stats to Know
Entrepreneur found that the online market, which has experienced 300% expansion over the past few years, still has plenty of room to grow. Gen X and Millennials are the groups who are most likely to shop online (56% and 67%, respectively), but this is far from a saturated market. In 2021, online sales will only make up 17.5% of sales in retail around the globe (10.1% higher than 2015). Total sales will grow from $700 billion this year to $4.8 trillion over the next few years.
Brick and mortar companies must center themselves where they are, limiting their abilities to sell in other locations. More people than ever are finding the advantage in virtual retail, a practice that expands the ability to sell along with an opportunity to reduce costs in the supply chain. A digital transformation means that a company no longer has to pay the rent, insurance, taxes and other operational costs that are associated with real property.
Even for brick and mortar stores, eCommerce enhancements help a company tap into the growing digital market. This is particularly true of service based companies that do not necessarily have to deliver inventory in order to fulfill an order.
The digital transformation that comes from virtualization creates more opportunity for customization as well. When you outsource certain aspects of your manufacturing and processing into the “sales cloud” so to speak, you gain the ability to create hypercustomized products that would not be available with a physical inventory.
Even if a company doesn’t outsource its production to a customization house, taking customized orders from an expanded digital infrastructure gives your business the advantage of knowing exactly what your customers want. Savvy companies can then produce it using a just in time model.
Putting a retail store online is also a great way to gather and analyze data. Retention activities and customer tracking is done automatically in many cases. This gives your business a leg up on future campaigns – you will know more about how your customers buy, what they buy for and how you can keep them engaged over time.
Cross selling and upselling become easier the more data you have from a digital infrastructure. This is information that you would have to take time to get in a traditional setup.
Basically, no one likes hard sell advertising. Investing in eCommerce enhancements allows you to work with what you have and provide services that your prospects will appreciate. In short, they’ll come back for more on their own!