Challenges in e-commerce: Tackle buzzwords, but get basics right
E-commerce and digital experience managers are faced with an onslaught of buzzwords: personalization, omnichannel, headless, artificial intelligence (AI), virtual reality (VR), the Internet of Things (IoT). Everyone’s pushing to get faster and better, to win big bucks from customers who are spoilt for choice and can switch across brands easily.
Online retail is growing across Europe, as a recent Magnolia inquiry with Forrester analysts showed:
-The UK chalked up a 23% rise (interestingly, higher than in the US this time).
-Germany and France registered about 18% growth.
-Spain and Italy lead the mature segments where consumers shop via mobile and desktop readily.
-The US leads the way in omnichannel, although the UK is catching up.
-Retailers face different pressures. In the US, Amazon dominates and shipping processes are a concern. In Europe, companies are focused on operational efficiencies and overhauling business models.
The inquiry with Forrester also revealed that companies are still caught up with the nuts and bolts in e-commerce:
-Back-end systems: how to incrementally add and remove these systems
-Orders and payments: how to coordinate what your recommendation engine is suggesting with your stock levels in the inventory system
-Personalization: how to tap into consumer insights and behavior
The challenges in e-commerce are much more real and practical, a view confirmed by Magnolia solutions architect Jan Schulte, who has worked on numerous DX projects in retail and consumer goods.
“The top challenge that enterprises consistently name is, how to place product content,” said Schulte. Many businesses still struggle with managing thousands of product descriptions in their product information management (PIM) systems and extending this to their digital presence. The complexity is multiplied when global enterprises factor in national, regional and language differences. Imagine how a manufacturer of agriculture equipment and gardening products would do this across diverse markets - you get the picture.
You need to be able to break product content into structured, reusable pieces that can be plugged and played across different systems and channels. An API-driven approach gives more flexibility and enables a seamless integration of content to drive commerce.
Businesses also struggle with how to produce high-value content, added Schulte. Getting your product information in order is one thing. You also want to be able to balance between producing more engaging content for complex, high-value products and basic descriptions for lower-value products, and tease them out using personalization. The next step is to spin great stories around your products, touch customers at various points in their journeys, and ideally, inspire them enough to share those stories in social channels and beyond.
“You can’t write once and publish everywhere,” noted Schulte. Content has to be well-tailored. Even when it’s versatile and reusable, the pieces still have to be adapted and modified, however slight, for the appropriate channels. Magnolia partner Tinext for instance has created a social media hub that pushes content to channels such as Facebook and Twitter.
On top of that, businesses want the flexibility to change their act fast. “That increasingly points them to the front-end where they can quickly adjust the design and presentation to fit changing demands,” said Schulte. “Many clients who use the SAP Hybris commerce system also turn to Magnolia CMS for added speed and agility. They almost always want to be able to set up campaign pages and teasers super-fast.”
Personalization remains the holy grail in e-commerce. Most retailers start by using explicit personalization, e.g. where the user is known, has a login account and gets a purchase recommendation (“customers also bought”) at the checkout point. Some have upped the game by using implicit personalization, e.g. where the user is anonymous, and gets purchase recommendations based on click rates on product news or personalized content based on behavior (“likes luxury items”). Personalization in B2C settings tends to be less complex than in B2B settings, where rule engines and agreements have to be factored in. Read more about ecommerce personalization.
Buzzwords are signposts, but successful e-commerce really boils down to good old, solid, plain vanilla content management. “AI is still in its early stages,” said Schulte. “Most are still struggling with content management. Next on their priorities are personalization and A/B testing. A typical e-commerce site has a myriad of at least 15 different systems working in parallel. This often calls for integration at various levels of complexity. For example, there is currently no single line of code to fix that in the cloud.”
Enterprises should think about their digital maturity when deciding to go for a big suite or a best-of-breed approach, he advised. “An outdoor clothing retailer chose a monolithic suite, but then realized that they had bought a Ferrari when they really just needed a bicycle. Businesses need to think through the features that they truly need and can use effectively.”
A leading German retailer uses Magnolia as a traditional front-facing CMS. A couple of major UK retailers use Magnolia as a headless CMS, for instance, using a fragment of its functionality for personalization, or using it to decouple teams and allow them to tap into different content systems and work independently. As Schulte put it, “Magnolia is not a turn-key solution, but more of a platform that many retailers use to integrate with adjacent technologies and to provide consistent experiences. You could see Magnolia as the glue that holds things together.”
This is the first in a series of four blog posts on “Content commerce: Behind and beyond the buzzwords”. The next posts will take a closer look at personalization, omnichannel and headless.
Find out about Magnolia for Ecommerce
Read the blog article about Headless Commerce
Read the blog article about ecommerce personalization