The Evolution of Commerce From Retail to Digital
As recent events have hammered home, customers are increasingly interested in the overall experience that brands provide for them. If the ability to shop in one location gets taken away, how can brands adapt their offerings to compete in the digital age?
In a recent podcast episode of Global Commerce People, Chris Baldrey-Chourio sat down with Darren Hitchcock, General Manager UK & Nordics at Magnolia. They discussed how data drives the customer journey and how we translate the in-store sales process into selling online in the digital age.
Here are a few key takeaways from the discussion.
The Evolution of Search
“You’ve worked with some of the world’s leading authorities in data-driven digital experience over the years, and been enshrined in this evolution of ad tech in retail for eCommerce in particular over the years. Tell us a bit more about that journey,” Baldrey-Chourio asked.
According to Darren, “Search has been a huge driver over the last ten years.”
Just like the categories of a digital shop, a retail store is divided into sections. When he first started as a salesperson, the best way to begin a sales conversation in a retail store was by approaching a family, for example, one buying a microwave, and helping them get over the vast paradox of choices they had before them.
Darren took these families on a customer journey to help solve their pain points. He explained the various types of microwaves and found the one that addressed their problem. He essentially became his own API, an algorithm working in the background, helping people find products most relevant to them.
Over time search began to improve. Visual, voice and text search combine together today, but in the early days, Hitchcock was at the forefront of contextually sensitive automated marketing with a company called Mercado.
Physical products were slowly switched over to digital for showcasing, and detailed search indexes were being created. Brand, descriptions, title and several other fields were analysed to discover relevance.
“This whole searchandising thing kicked off,” Hitchcock remarked.
The search experience began to move from merely being about relevance to actually matching merchandise around that relevance, with everything driven by data. Metrics, reviews and ratings were slowly influencing purchases as we began moving into the digital world of today.
Moving Towards an Omnichannel Experience
In the latter part of the first decade of the millennium, retailers began to embrace digital transformation. The first pillar of a website is already up and running, and they move towards trading across multiple channels. As brands came to grips with the customer experience, that evolution was now driven by data.
“The key phrase was customer intent. Personalisation is really the evolution of all of these. We’re trying to get the right products in front of the right people, but it all comes down to the customer intent,” Hitchcock highlighted.
Personalisation evolved as recommendations made to customers changed. For instance, in grocery stores, people don’t always start with their favourites, but instead will try to find the best prices or look for specific offers.
People make choices based on specific attributes, but shopping is also based on behaviour. Things that happen in real life, and other factors we can’t account for.
“There are so many dynamics that change what personalisation means to retail,” Darren pointed out.
One thing to remember is not to make things overly complicated. Data is meant to be helpful, but overreliance on algorithms and machine learning can be dangerous. There is a massive element of trusting your gut that goes into effective personalisation as well.
Standing Out in a Competitive Landscape
Once you begin on a journey of innovation, eventually competition will start to appear. As time progresses, many SaaS vendors attempt to add more features to their offering.
The problem with this is that as you add more features for content recommendations and email recommendations, for instance, you cross over into other competitive battlegrounds and move away from your core offering. You go from being a recommended vendor to a vendor of things.
The ideal scenario can be seen in smaller technologies that are very good at what they do. The goal is to create an architecture rather than be the architecture so that there are fewer dependencies within the tech stack. This is one of the reasons why Darren loves being at Magnolia.
So, how does content play a role in all of the digital experience scenarios to enable a merchant to trade online effectively?
The primary focus is on the customer experience.
Hitchcock has created his own reference point, the business user experience (BUX) instead of merely focusing on the customer experience.
The business user can be very siloed in different organisations. Analytics, marketing, merchandising, trading and more are all working with different technologies and their dashboards.
Each department can’t all work from the same suite because they have their own unique jobs to do, but they are all critical to the customer experience.
The business user journey isn’t smooth or linear. Still, by decoupling the customer experience front end, the business users can then more easily manage things on the back end, essentially going headless.
These users also need the ability to visualise content and preview experiences that are being built for different campaigns and audiences, whether that be mobile, desktop or something else. They need to see and visualise the personalisation experience they’re building, drag and drop around it before publishing to the market.
With a headless CMS, it’s possible to curate once and publish everywhere. But also, if you need to make one change, it can happen quickly instead of having to interrupt the product roadmap for the rest of the team and have these changes take weeks or months.
Baldrey-Chourio continued to probe for answers around the idea of one flexible architecture capable of letting business users unite their entire digital presence.
According to Hitchcock, “The Digital Experience (DX) is the new sort of frame but is a best of breed architecture; It has the right components that help unify departments.”
This is something Magnolia does well. It helps easily bring assets together to visualise and create the experiences and helps keep the business moving at pace. This allows you to test and make changes, review performance and create relevant outputs that adapt to the context of the shopper - the most important part of the conversation - their mindframe.
The Future of Commerce and Multichannel
Events around the world have shown that uncertainty can be prevalent. But what do recent occurrences mean for the future of digital businesses and multichannel?
Darren believes the answer will be in “speed of change”. Retailers will need to be digitally agile to react to changes with new ideas and new levels of demand. There will still be a huge part to play when it comes to personalisation and testing as we continue forward.