Digital commerce: What’s right and what’s wrong
Over the past decade, there’s been a meteoric rise in the volume of commerce conducted on digital channels; in the US alone, holiday e-commerce sales increased 272%, from $19.6 billion in 2005 to $53.3 billion in 2014.
But behind the slick façades of many of the world’s most breathtaking Digital Commerce sites lies an ugly truth: the techniques used to drive revenues and measure success are hopelessly antiquated.
- Using cart abandonment as a key defining metric of commerce success. High levels of cart abandonment are accepted as inevitable—industry statistics indicate that 68.53% of online shopping carts are abandoned— and marketers are expected to spend dearly to woo abandoners back to the site to convert.
- An emphasis on digital advertising as the mainstay of an endless march to acquire new customers. Advertisers’ budgets appear to be limitless; by 2018, internet advertising will be poised to overtake TV as the largest US advertising segment, reaching $194.5 billion in 2018, just $20 billion behind TV advertising.
- The juggernaut that ad-blocking software promises to be. The number of people using it, globally, rose 41% during the first half of 2015 compared with the same period in 2014.
- Selling products in a discrete digital store that is walled off from the rest of the customer’s digital experience—the default arrangement for virtually every commerce site. The commerce system becomes yet another siloed system for marketers to contend with, in addition to the average 12 applications marketers use to manage campaigns and data.
The net effect of the estimated $600 billion that will be spent
on global digital advertising in 2015 is a projected $1.36 trillion in global online commerce sales.
In other words, every $1 spent on digital advertising will generate only an estimated $2.27 in gross commerce sales—acceptable to a digital goods company with virtually no cost of goods sold (COGS); but for any company carrying physical inventory, this represents an unprofitable equation.
Sitecore changes the commerce equation
Clearly, these financial dynamics are not sustainable, even for the largest, most established online retailers. Sitecore offers a fundamentally different approach to digital commerce. We call it context-driven commerce and it’s based on three key rules of conversion:
1. Prospects engage with content that’s totally relevant to them at that exact point
2. Engaged prospects convert into customers
3. If you keep them engaged (i.e., when customers feel they’re getting a personalized, custom experience
unique to them), companies and brands win customer loyalty
This white paper explains how context-driven commerce works, how the Sitecore solution delivers context-driven commerce capabilities today, and the important business benefits that can be gained.
It also includes an in-depth look at how a global beauty company shifted from a standalone web store to integrate commerce more organically into customers’ omnichannel experiences—a significant step toward the context-driven ideal.