The Perfect Match: Building a Healthy, Meaningful Relationship between Content and Commerce

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  • Doug Heise Vice President, Global Marketing
  • Jul 31, 2014

As you may have gathered from the title of this post, you’re about to read a love story. But full appreciation of any great love story requires an understanding of both parties’ histories. To understand why content and commerce belong together, let’s go back a bit...      

Competitive differentiation for commerce in the early 1900s hundreds was based on radical enhancements in the way goods were manufactured — think of Henry Ford’s conveyor belt transforming automobile production.

Then in the 1960s, we saw increased efficiencies in distribution. Global networks and sophisticated logistical systems were set up that enabled us to build truly global companies, bringing the world together in ways that were impossible before.

In the 1990s, these global networks turned digital, giving everyone access to instant global communications and the benefits of thousands of people working together on a common platform.

This is when the first generation of e-commerce evolved, built on the generations of innovations that preceded it — manufacturing efficiency, supply chain enhancements, and high speed global networks. But now, we have moved to a new era, which Forrester has dubbed the Age of the Customer. Of course, the customer has always been at the heart of the commercial equation, but now, the power has shifted from the companies that provide goods and services to the people that buy them.

Consumers decide how, when, and where they want to interact with brands. This puts pressure on companies to respond quickly — often in real time — or risk losing a customer to a competitor who can.

How did we get to this point?

What has driven the e-commerce market from basic online sales to global, omni-channel customer experiences? I’ve identified three disruptive forces:

1. The explosion of consumer touch points. With smart mobile devices, tablets, and new digital in-store devices, consumers are increasingly using mobile devices at every stage in the shopping lifecycle. This has put a portable shopping device in everyone’s hands. It is no longer necessary to “go shopping” anymore; consumers are just a click away from anything they could possibly want.

2. The increasing importance of content and community on the digital shopping experience. Consumers are spending more time online researching products and services, and social communication plays a large part. On its own, social media isn’t likely to become an important retail channel anytime soon. But it’s becoming more popular every year, and it’s driving more shopping across all channels, not just online. This is a key point — multi-channel, social commerce is about more than just providing new ways for shoppers to purchase items – it’s about moving the traditional buying cycle online in unexpected ways.

Let’s take a break here. The two aforementioned factors have bred a smarter, more empowered consumer. This new generation is more informed, more self-reliant, and more connected to social peers when making shopping decisions. This changes behavior, especially regarding retail stores. Shoppers are increasingly treating stores as product “showrooms” — a place to try out the product before they look for a better price from an online discount retailer, which leads me to the third disruptive force:

3. The increasing popularity of global, online-only retailers, such as Amazon. Amazon’s prices are 16% lower, on average than its competitors. Traditional retailers do compete on price — leading to what some analysts have referred to as a “discount death match” and the end of “everyday low prices.” No matter how low retailers drop their in-store prices, and online stores will always have a lower price, but most consumers are willing to pay only a small premium for buying in-store (less than 10% more).

All of these disruptive forces place tremendous pressure on retailers, brands, and other online sellers. Companies are struggling to figure out the right way to speak to consumer. How do they want to buy? How do they want to discover and explore? How do they want to interact with brands online? Retailers are responding by experimenting, but there are few hard and fast rules and the ecosystem is constantly changing.

No relationship succeeds without experiencing its fair share of challenges, and in my next post, Separate Lives: Overcoming Multi-channel Disparity in e-Commerce, I’ll explore the challenges of multi-channel experiences and how they can be overcome.


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There is one comment on this article.

  • Arne König
    Hi Doug, thanks for sharing! I think a big challenge for manufacturers and retailers is the exchangeability of today's goods. That's why VW Germany created a whole theme park around picking up your new car: But how to transport this customer experience on the web...?
    Aug 8, 2014 9:15 AM