E-commerce, as we knew it, is dead – how to survive the change

Remember when someone needing new running shoes would visit the brick-and-mortar store or browse the selection of their favourite brand’s online shop? The social aspect of shopping came from the opportunity of running into a friend while visiting the store. Back then, the thought of people shopping through social media platforms based on product recommendations from influencers would have felt absurd.  

Nitor’s Business Strategists Satu Koivulehto and Eveliina Lakka have witnessed the rapid development of digital commerce closely over the years.

“Of course, when we say “back then” we refer to something that could have happened only ten years ago. In digital commerce, that is more than enough time for drastic consumer behaviour and technology shifts,” they point out.

As for the next ten years, digital commerce is expected to evolve significantly – with a strong emphasis on unified solutions that enable seamless customer experience across all channels. Businesses relying on online stores and brick-and-mortar may find themselves surprised by the changes in consumer behavior. 

“Consumers shop increasingly through social media, online marketplaces, and price comparison sites. They make purchase decisions more and more based on social media and peer recommendations and prioritize finding the best deal instead of brand loyalty,” adds Mika Majakorpi, Nitor’s Chief Technologist. 

Wherever consumers prefer to shop, one thing is for sure. Succeeding without consistent customer experience on all platforms is nearly impossible.  

Social shopping brings a massive shift to digital commerce

The rise of social media has shattered the traditional online shopping experience. Social media users browse through entertainment, get the latest news, interact with friends – and shop while at it. The social commerce market size is expected to reach $1.6 trillion U.S. dollars in 2024.  It has a compound growth rate of 32% from 2023 to 2030 with social commerce sales reaching $6.2 trillion by 2030.

“Social commerce could become so powerful that it can threaten the current stance of search giants and traditional e-commerce platforms. Whether it is in-app purchases on Facebook, shopping directly via influencer profiles on Instagram, or livestream shopping channels, digital commerce retailers and platform vendors can’t afford to ignore social media,” Lakka points out. 

Social giants like Instagram and Pinterest are increasingly investing in making digital shopping a seamless part of their platform. According to Hootsuite, Pinners are seven times more likely to buy things they Pin. By developing new advertising and sales features, Pinterest is on its way to making every Pin shoppable. 

“The future of digital commerce is shifting towards social commerce networks over traditional value chains. With new and existing channels, success now depends on re-evaluating key players and re-designing channel strategies — who to collaborate with, how and where to integrate, and how to stay agile,” Koivulehto says. 

The burning question is how businesses can succeed in the ever-changing landscape. 

From AI to customer experience – The future of digital commerce is composable

A crucial lesson for businesses to understand is that the change in consumer behaviour represents a shift in power from retailers and brands to consumers. Not only does this apply to social commerce that serves customers’ need to buy based on recommendations and inspiration from people we trust. If customer experience is lacking, they will move on. 

“Consumers expect seamless and personalised customer experience across channels. They want safe and effortless shopping on their terms. For businesses, this means taking the omnichannel thinking much further and adopting the unified approach,” Majakorpi says.  

Composable commerce and unified solutions allow businesses to create a seamless ecosystem for product distribution across all platforms. If we use the same running shoes analogy, a unified digital commerce  system would allow sales associates to use the same system in-store and on all online sales channels.

The sales associate can see which products a customer, who has come to the store to purchase a computer, has previously browsed or added to their shopping basket online. Using this information, the associate can recommend compatible accessories, such as a monitor, keyboard, or additional memory, that suit the customer’s needs. As this information is also available online, the customer receives consistent and accurate details across all of the company’s sales channels.

“Digital businesses must build technological capabilities to stay on top of the game. Moving on from monolithic platforms and embracing unified, composable solutions allows businesses to leverage social commerce, efficient use of data, and innovations such as artificial intelligence,” Majakorpi explains.  

A great example of utilising AI efficiently is concierge commerce, which caters to consumers’ need for personalised shopping experiences. Whether it’s about improving the in-store experience or bridging the gap between in-store and online, AI has the power to boost customer satisfaction greatly.

“AI could aid sales associates by offering tailored recommendations or assisting online customers by providing live commerce features. Traditional multi-step processes often lead to drop-offs at various stages. Composable solutions create an ideal foundation for building AI capabilities, making the sales process more agile and enhancing the customer experience,” Koivulehto adds.

“With a flexible technology stack, businesses can react to changing needs and requirements. We don’t know the future, but we can prepare for it. To build an agile, future-proof business, retailers must adopt the composable commerce – or be ready to abandon ship,” Majakorpi concludes.