eBook: Insights into the 2019 State of xCommerce Report
Who we are
Moltin provides the leading commerce innovation engine to help free brand-centric companies to pursue the future of retail. Our headless commerce APIs allow retailers to quickly and easily create new experiences for your consumers while maintaining your existing commerce and corporate technologies.
Chapter one: Survey Overview
This survey was taken in November to gauge consumer sentiment at a time in which consumer experiences shopping and engaging with retail and commerce experiences was most pronounced, when consumers were really busy trying to find the perfect gift for themselves, friends and family members. The types of questions asked targeted receiving insight into trends and preferences. What do consumers really care about? What are their expectations when shopping and when engaging with a retail experience?
This eBook will paint some more color around these insights. What do they mean for you? What can your business do to harness the changing consumer sentiment around what it means to have a positive retail experience?
Chapter Two: What is xCommerce?
The history of eCommerce
For the past couple of decades, retail has been all about eCommerce. In the late 90s, amazon.com and others paved the way in eCommerce. The ability to use a personal computer to log onto the Internet and buy goods and services, where you would previously have had to get in a car and drive to the store, was revolutionary in terms of how all of us as consumers were able to obtain the goods and services we needed in our everyday lives. And for 20 years, it has had a good run.
The inception of xCommerce
An inflection point in the market occurred during the last year or so. We've seen the shift where consumers are saying, "I no longer want commerce to be something I have to do or a process I have to go through. I want it to be an experience."
We are all consumers. We consistently need things to survive and thrive, such as food and clothing, as well as entertainment including movies, video games, etc. We no longer want to have to take action to obtain and consume these things. We expect an experience--and that's the foundational change on the horizon. What can we as brands and retailers do to harness into this kind of change in the consumer's sentiment?
The Definition of xCommerce
xCommerce is all about making commerce ubiquitous and frictionless. It's about embedding it seamlessly into the consumer’s workflow, every day in our daily lives. How does a brand or retailer make purchasing an experience, not a process? That's the key--meeting that transition point away from the traditional eCommerce with which we’re familiar.
To put this in more context, think about an average day in your life. You wake up, you get ready, and you go to work or school, or wherever it is you're going to be going that day. Think about all of the different experiences and all of the different touchpoints you have during an average day. xCommerce is about making commerce accessible through all those different touchpoints you already have every day. Again, it's about seamlessly embedding commerce into the workflow of your daily life. This isn't about consumerization or focusing on how to get people to consume more goods and services.
We all need things to sustain our lives--food, water and clothing. And there are also things we want in terms of entertainment and socialization. This isn't about more. This is about finding better ways to get access to the things we already want or need.
eCommerce: The Process Model
eCommerce is a process. For example, a consumer will grab their PC. Open their browser. Go to a specific website. Browse the inventory. Select an item they want to buy. They will add it to their cart. Click the checkout button. Take out their credit card. Put in their payment details. Click to complete the transaction.
Like, whew! It's a process.
There are currently organizations out there today that are working really hard to streamline this process AND make it more efficient. Amazon Prime and other services are doing an admirable job. But it's still a process.
xCommerce: The experience model
xCommerce comes in and makes shopping about an experience. Take Uber, for example. While it is not a cutting edge xCommerce use case, it was one of the first in this kind of transition to move to the next wave of commerce.
A consumer grabs his phone. Opens an app. Says where they want to go. Gets in a car and goes.
It's about making commerce frictionless. Eliminating resistance. Aligning commerce to my daily workflow. I always have my phone with me, which makes it super easy and frictionless to procure a cab to get me where I need to go. That’s not how it used to be.
As another example, I'm hanging out with some friends, and I see a pair of shoes or a shirt or a bag my friend has that I’d like to get. Traditionally, I then have to go home, go online, and search for the bag. What if I can't find it? What brand was it? It's really challenging. Or perhaps I go to the store, only to find they're out of stock.
Now, with a new, emerging xCommerce app, I take a picture of the bag I desire. The application is smart enough to identify what that good is, and not only that, but it links me to a merchant that sells that bag. I already have my payment details uploaded through an e-payment system. All I've got to do it take a picture and buy.
xCommerce is about the immediacy of embedding commerce into our daily workflow and make it more accessible.
Here’s an example of how xCommerce could work in a certain dynamic. I'm walking down the street and either walk by or into a store. There's a facial recognition system which recognizes I am a male of a certain age, weight and height. Maybe the clothes I have on say something about my style.
Instantly, there's a shopping experience curated just for me, with exactly the type of things that someone like me would want. Again, this makes it a much more personalized, approachable, and convenient experience customized to the experience I want to have.
"Alexa, buy more paper towels."
xCommerce is an experience, not a process.
Chapter Three: Integrating xCommerce
Taking commerce and embedding it into the workflow of our daily lives is key, and something we're going to see more of. Where are you in your journey to xCommerce? Are you doing this today?
Do you have multiple xCommerce use cases your organization is embracing? Is your organization working on it? Maybe you only have one, but you’re heading down the right path. Perhaps your organization has planning underway to try to launch some of these use cases. Or maybe you’re not there yet, but you’re excited to learn more.
The survey data may lend us some insights into implementing xCommerce in the future.
What drove consumers to generate record sales in 2018? What do consumers expect? What are they telling us? What did 1,500 folks say they expected when participating in a retail experience? What keeps them engaged? What trends do consumers say they are interested and care about coming into their retail experiences in 2019?
The 2018 shopping process
As mentioned previously, 2018 reported record sales. It was a huge year. Not just during the holiday season, but all year long. The chart showing distribution channels answers the question of how consumers engaged. What were the channels they interacted with, with which they actually transacted commerce?"
What's interesting here is the retail store is not dead. As much as folks want to talk about retailpocalypse and the death of the brick and mortar store, it's simply not true. Brick and mortar was number one, immediately followed by traditional eCommerce. So those two are clearly still the leaders when it comes to how people buy goods and services.
The introduction to xCommerce
The survey also indicates some of the nascent, more xCommerce type use cases here, including in-store kiosks, voice-activated commerce, chat bots, IOT, etc. They're in the early days of consumer adoption. Again, this is looking back at 2018. This is going to be fun and fascinating as we continue moving forward. This is our First Annual State of xCommerce Report, and as Moltin continues to do this year after year, it's going to be fun to see how the distribution of these cases change, because I expect, as I believe you do, as well, this is the direction the market is heading, more towards these xCommerce use cases. So it will be interesting to watch as that transition takes place in the years to come.
What do consumers expect?
What do consumers expect out of this new era of retail? Number one, convenience. It's huge, right? Making the experience convenient. Not a process to have to go through, but something they can experience as part of their daily workflows. Secondly, price is always going to be a priority, a major component of any consumer experience. Third is speed.
These are the things that consumers expect. If you're not able to deliver an experience that's fast and convenient, it's going to be really difficult to maintain the engagement and repeat business we all strive for with consumers.
Chapter Four: Moving Forward with xCommerce
Keep the consumer engaged
Consider consumer experience as a sandwich. Speed and convenience are table stakes, the two pieces of bread. Those are the things people routinely expect from their retail engagement. Experience is the meat between the two pieces of bread. That's the core of what is going to keep consumers engaged.
How do you make the experience fun, engaging, and personalized? All of those factors are critical to pulling customers in and being one of the retail winners of 2019.
What are consumers going to do and try, and how will they want to participate in a commerce experience in 2019? So these two charts play together to tell a story. The first chart asks how many channels a consumer engages with before making a purchase.
What's fascinating is only 12%, 12.2% of people said only one channel. So the myth that people just go straight onto an eCommerce website and make a purchase, or that they go straight to a brick-and-mortar store and make a purchase isn’t correct.
Almost 30% of people are using at least two channels. 40% of people use at least three channels. So combined, you've got 70% of consumers saying, "I use either two or three channels before making a purchasing decision."
Transitioning to the chart here on the right, we see what channels consumers are most interested in experiencing next year. This poll was taken in late November 2018, so it was talking about 2019, where we are right now. What do customers want to experience as they transact commerce in 2019?
Omnichannel is critical
Not surprisingly, retail stores and traditional eCommerce websites did not come back in the lead. Instead, consumers indicated experiences, such as being able to go into a store with their own phones and making their own purchases--mobile self-checkout. They want to be able to use a kiosk in the store. They want to be able to transact commerce via social media, chat bots and IoT buttons, all of these emerging xCommerce use cases.
70% of consumers are going to use two or three channels, so for us as brands and retailers, we must offer our consumers multiple channels to engage with us in a consistent and unified fashion. This is critical to success moving forward.
Brick and mortar is not dead. Boring commerce experiences are. It's all about the experience. That's what these 1,500 consumers are telling us. Now we need to discover the key actions we must follow to take to be a retail winner in 2019.
Chapter Five: Adapting to xCommerce
Only 11% of companies are actively working on building xCommerce use cases right now. Why is that? Why isn't xCommerce more ubiquitous already? As retailers and brands, we all look at the types of xCommerce use cases and say, "That sounds awesome. That's how I want to transact commerce. Why isn't it mainstream?"
The truth is, it's really hard to implement. So instead, the eCommerce experiences which have prevailed for the last two decades, where it's a browser-based experience primarily on a desktop or laptop PC, has slowly moved toward the mobile browser, but it’s still browser-based. Those are built on your traditional commerce platforms. They do a great job with traditional eCommerce use cases, but they can't support xCommerce. They weren't designed for that type of architecture.
It’s for organizations that are trying to make the xCommerce platform work in that way. What comes of it is a lackluster experience often rejected by consumers. That's one of the reasons why we're not seeing as much prevalence of these types of use cases as we might expect.
The second issue is it's expensive. The reason it's expensive is because people look at the traditional commerce platform running their eCommerce website, and don’t believe they do what they want to do with the traditional commerce platform. The only way they can get to these more emerging xCommerce use cases the consumers are expressing their need for is to go build it themselves. This is super expensive and very time-consuming. That's a barrier for a lot of organizations, and that's why we don't see more of it.
The final challenge is the time horizon, which is related to the fact that companies for the most part have to flounder around and do this themselves. It takes too long. Organizations consider the business case around this and realize it takes nine-to-twelve months to invest in a project that's new, without uncertain ROI. That's a difficult proposition for companies to make. So they decide to play it safe, and stick with the traditional eCommerce experiences they have. That's a challenge. These are all challenges brands and retailers face. They are the headwinds that prevent more ubiquitous adoption of xCommerce.
Chapter Six: How to be a retail winner in 2019
Based on the insights from the survey, there are four issues which are really critical in successfully transitioning to xCommerce.
The first issue is, it's critical to strive in your strategy to break down the barriers and blur the lines between the physical and the digital. Consumers indicate that they use two or three channels before they make a purchase. So you need to have two or three, if not more, channels by which a consumer can engage with you. And the key here is to make that a unified experience, to truly embrace the spirit of the omnichannel. Blur the lines between the physical and the digital by bringing digital into the store. Consider ways consumers can transact more traditionally into the digital realm. Make commerce accessible where the consumer already is.
The second is to prioritize quick-win projects. A nine-to-twelve month build and launch is a massive amount of time. And the reality is that in 12 months, new xCommerce use cases are going to emerge. These can't be multiple-month-long projects. So, as you're prioritizing, list the potential things you can do. Build the business case by rapid innovation. Choose the low-hanging fruit. Experiment, deliver some kind of isolated value, prove out the use case and then expand the usage of those projects over time.
The third issue is to invest in technology that provides optionality. xCommerce use cases continue to evolve and there are new ways consumers want to transact and experience commerce. If you make a bet on a specific platform that pigeonholes you into a certain type of use case, what happens when you want to change and adapt? Optionality will be critical here, the extensibility to be able to leverage a technology that's going to give you the ability to build new and different use cases as the business demands them. Consider a future proofing strategy which gives you the ability to go and experiment quickly and gives you the optionality to try different things as new xCommerce use cases present themselves.
Fourth, xCommerce is really about moving away from commerce being a process and embedding commerce into the daily workflow of all of our lives. This will look different for every brand and every retailer, because your consumers are different. The key is in understanding where your consumers want to be met and prioritizing those needs. What channels are going to be the most interesting to your target user base? And of those opportunities, which do you think are the most realistic projects to go knock out to experiment with to add some value to your users, prove the ROI, and then continue down your xCommerce path over time?
Chapter Seven: How Moltin can help
Moltin, the sponsor of this survey, is a headless commerce platform. We are focused on commerce builders who require flexibility, speed, and control. Headless means we are a cloud-based microservices platform powered by APIs. That's what it's all about. And what that means for you is we provide all of the backend business logic that will power any of your eCommerce or xCommerce use cases. We already do traditional eCommerce use cases better than anybody. What's unique is we're also powering xCommerce use cases.
You can customize your front end to deliver the awesome experience that's going to wow your consumers. That's what Moltin is all about.
For example, go on YouTube and search for Stance Self-Checkout. Stance is currently one of the hottest digital native vertical brands going into retail stores. They started with socks, and now they're doing T-shirts and undergarments, etc. They run on Demandware (Commerce Cloud). So they're a Salesforce, Commerce Cloud customer. They couldn't do the xCommerce use cases to which they aspired. In just a couple of weeks, they were able to seamlessly integrate Moltin on top of their Demandware and build this mobile self-checkout use case. Check out the video. It's only a little over one minute. You'll see this experience in action. It's a great example of how you can quickly build and deliver these xCommerce use cases.
There are different ways for you to partner with Moltin. First, you can use your existing eCommerce platform. Stance seamlessly integrated Moltin because it's a cloud-based microservices platform. Likewise, you can seamlessly integrate Moltin with your existing commerce platform, whether that's Demandware, Hybris, Shopify, ATG, Magento, and the list goes on.
The second way is if you are looking to migrate away from your legacy eCommerce platform to a more modern architecture. You can run Moltin as your standalone commerce platform. We'll power your eCommerce and xCommerce use cases.
The third way is as an orchestration engine. We're seeing this emerge much more commonly now, where businesses are building a best-of-breed architecture. We're going to go pick a specific point solution. What they need is an engine to orchestrate all of those different point solutions. That's what Moltin can do.
So you have multiple ways you can consume and take advantage of this headless commerce platform.
The full report is available on our website. If you Google Moltin state of xCommerce report, you’ll discover a lot more color. You now have a really good sense of what consumers care about, the things they are thinking about, and then more importantly, what you need to be considering as a brand. What do you need to be investing in from a technology standpoint to be able to embrace xCommerce in your organization? How can you can do it fast? How can you do it in a way that's going to target the right use cases that matter to your specific consumers?
Whatever your needs… Moltin is here to help.
If you want to learn more about Moltin and their mobile self-checkout and xCommerce solutions, feel free to contact Moltin here.