How to help your e-commerce business survive the cost-of-living crisis
As inflation continues to rise across Europe, the cost-of-living crisis, caused by soaring energy costs, is a growing concern for both households and businesses. However, despite this challenge, e-commerce sales are still rising.
This wave of consumer pessimism, highlighted in a survey carried out by McKinsey, in October 2022 in France, Germany, Italy, Spain, and the United Kingdom, shows that for 58% of European consumers increasing prices are their number one concern.
However, despite this challenge, e-commerce sales are still rising – although slowly - and according to a study by the German market research institution Opinium this year, 25% of the respondents intend to continue buying more online over the next few years.
The key challenges facing digital commerce
New criteria, such as product availability, cheaper delivery costs, competitive pricing and discount campaigns are now starting to play a major role in e-commerce. In addition, logistics chains, formerly taken for granted, are no longer reliable. Therefore, alternatives need to be found to ensure goods can be delivered on a continuous basis.
Imagine a digital commerce business that deals in electronic components in the B2B space. The criterion for success here is the “findability” of components on the brand’s website together with the availability of components within a short delivery time. If a business like this can meet such a requirement successfully, it will be able to stay one step ahead of the competition.
Many components today are delivered from China or somewhere else in Asia, and Russia played an important role in the logistics and delivery chain for many businesses up until the conflict in Ukraine broke out in February 2022. But this has all gone now and reliable alternatives must be established.
Furthermore, dynamic pricing, which involves setting flexible prices for goods or services based on the demands of the market at the time, is also facing challenges as it depends on the availability of raw materials and energy prices. Pricing is also proving to be difficult due to different inflation rates in different countries. As a result, brands are under pressure. Apple for example has dramatically increased prices for their newest hardware in Europe compared to the U.S. market.
User Experience is more important than ever
User Experience (UX) is key to serving your customers according to their needs during these challenging times. Therefore, it is important to prioritize their needs.
With prices, availability and sustainability becoming key concerns, it is crucial that users find exactly what they are looking for in the most convenient and fastest way
Direct access to products and associated information is therefore a must. This involves providing:
- Accurate and complete product information.
- Associated information such as delivery time and options, prices and more. And this is relevant for both B2C and B2B organizations.
- Powerful search options such as software configuration tools, filters and simple text searches that are optimized to provide the most accurate search results.
Opting for a flexible service-driven architecture will enable your digital commerce platform to completely integrate of all the required information and data to help you fight the cost-of-living crisis.
Getting the most out of Artificial Intelligence (AI) will help you to adjust your delivery and supply chains dynamically. This will give you product availability and delivery options that can be checked in real time as well as prices. And you will be able to adjust these prices dynamically.
Product availability, relevance and price is King for B2B and B2C online businesses right now. So, if you can connect the relevant product data sources and integrate them into your digital commerce platform seamlessly, your customers will benefit from the completeness of information.
Additionally, gathering data on your customers’ behavior will provide you with insights into what kind of goods, services and offerings they want the most in their personal customer journey, enabling you to focus on this.
Combining this with customer data related to consumers’ buying history will allow you to detect typical customer preference patterns. AI can make use of these patterns and help you learn more about your customers’ needs and what kind of offers they may be interested in right now.
The same principle can be applied if your digital commerce business cooperates with retailers. The brands in question can provide you with updated information on prices and availability, ideally via data services, enabling you to have access to the latest information on production availability and much more.
And by making use of aggregated data containing all the information users need to know about the various delivery services, you can provide your customers with the best and most efficient delivery options.
Flexible Software Architecture
However, this will only work if you choose appropriate software solutions within an integrated digital solution architecture. This will include:
- A Product Information Management (PIM) solution which provides you with all your product data across all channels
- An Order Management System (OMS) that optimizes the lifecycle of your orders
- Powerful search tools that focus on relevant search details - enabling you to learn from a user’s search behavior
- A Customer Relationship Management (CRM) system and Marketing Automation solution - allowing you to generate customer- centric offerings and campaigns
- A Customer Data (CDP) platform that brings together all your data sources and makes customer profiles available in a consolidated and structured way across all touchpoints and channels
What is important to bear in mind is that you need flexible software architecture that brings together the best solutions. And this involves opting for more than just a headless solution in which the front-end (head) has been decoupled from the back-end commerce functions via Application Programming Interfaces (APIs). What you should take into consideration is a MACH architecture approach. MACH stands for Microservices, API-first, Cloud-native and Headless. MACH architecture is an amalgamation of software solutions that follows a best-of-breed strategy. If planned and designed properly, according to your business model and strategy, MACH is a future proof approach for individual customer needs, without being restrictive.
As they say, Rome wasn't built in day. Setting up a solution for your digital commerce business during this cost-of-living crisis is a step-by-step process and should be based on the state of your existing solution, budget, and industry-specific requirements. What you should be aiming for needs to be based on a combination of UX and technology aspects. I recommend you start by looking at your users’ high priority needs in the current economic climate and use the results to guide you in your technological choices.
Our experts can help you with every step along the way, from strategy to UX to technology so that you can develop the right solution for your digital commerce business.
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