Being successful in business today often means evolving to keep pace with things happening in wider society. Smart commerce is a good example of something gaining momentum now that will soon affect consumers and the places where they shop. Keep reading to learn more about this emerging trend and how you could apply it.
What Is Smart Commerce?
Smart commerce may be an unfamiliar term to you, but you almost certainly understand its applications. A Deloitte report about the topic defined it as something that helps businesses “…to win customer confidence using the power of data, analytics, and technology.”
The Deloitte analysts also described a smart commerce strategy as having six distinctive elements. They are:
- A digital mindset
- New-age fulfillment and logistics
- Personalized marketing communications
- Digital sales and service effectiveness
- Smart pricing
- Effective portfolio management
Deloitte’s coverage of the topic also gives real-life examples of how some of those six priorities play out in real life. In one case, a global automotive company based in India built a digital showroom using augmented reality (AR) technology. The solution had remote sales capabilities that allowed the business to keep seamlessly communicating with customers, despite the challenges of the COVID-19 pandemic.
Moreover, a print media company used artificial intelligence (AI) and machine learning to set the optimal pricing for customers at a certain inventory level. Doing that led to an 8% increase in revenue for the business. Then, a footwear company got a 10x increase in click-through rates and a 4x increase in engagement with an AI-based predictive advertising tool that made the brand more relevant across social platforms.
Even if you don’t hear smart commerce referred to with its official name, you’ve almost certainly seen it in action. Perhaps you’ve even benefited from it during your recent visits to a store or website. Remember, it combines data, analytics, and technology to help businesses better serve customers and remain competitive.
Intelligent Commerce Has Similar Aims
Just as Deloitte had specific ideas about what constitutes smart commerce, IBM discussed what it terms “intelligent commerce.” The coverage explains, “Optimizing commerce through a great customer experience isn’t about turning on new technology or doing business through every possible channel. Instead, it’s about helping customers through their hundreds of microdecisions across their buyer journey and engaging, delighting, and motivating customers to convert.”
It continues, “This requires the thoughtful, orchestrated execution of technology across your entire business. We call this intelligent commerce — a human-centric, experience-led, insight-driven approach to designing digital commerce solutions on any cloud to activate new revenue streams, reduce inefficiencies and accelerate time-to-value for your commerce investments.
The coverage continues by explaining some of the various things people must do if they want to operate their businesses in the realm of intelligent commerce. For example, they must have the data, flexibility and insights to decrease the time-to-value ratio. Time-to-value, or TTV, represents how long it takes a customer to find value in a product or service. The goal is for companies to shorten the TTV metric over time.
Technology utilization is not the only way to do this, of course. Some companies surpass what customers expect, which increases their revenue. They do this by offering value-added services, such as free deliveries or limited-time promotions. Certain products and services naturally have very short TTV ratios. They include haircuts, meals out at restaurants, or taxi services. Even in those cases, competitors could still give customers better options if other brands have lower prices, for example.
What Are IBM’s Recommendations for Using Smart Commerce to Grow?
IBM’s discussion of intelligent commerce identified a few “growth levers” that will help people make the most of their efforts. The first involves tapping into orchestration so that people get consistently excellent experiences across all channels they use to engage with the business. Orchestration can extend to employees, too. The IBM coverage provided an example of how Frito-Lay improved front line workers’ processes so that they could work as normal in a virtual environment when needed.
Another growth lever involved using company data and insights to personalize customers’ interactions with the business. That’s not always as straightforward as it might seem, however. Challenges can arise due to privacy laws, customer preferences, economic shifts, and more. However, IBM recommends using data to cultivate the kind of relationship a company should ideally have with its customers and align with their expectations of the brand.
A flexible, modern architecture is another key ingredient for companies trying to enhance their commerce strategies. Company representatives must remain responsive to customers’ needs and ready to adapt. That often means being willing to try groundbreaking approaches to attract and retain the target audience. In one instance cited by IBM, TAG Heuer created a guided purchasing experience for its customers within weeks. Doing that enabled the company to experience triple-digit growth during the COVID-19 pandemic.
IBM’s experts stress that companies must investigate how to use technology to assist customers, not just boost profits. Succeeding in that aim may mean focusing on known pain points and using high-tech strategies to ease them. Also, when companies rely on data to support and improve customer experiences, they must do so with care and respect. Otherwise, people could get the impression that a company has overstepped its bounds and knows too much about them.
How Could You Use Smart Commerce?
Making smart commerce work for you requires a conscious, ongoing effort. Moreover, it may also mean you take significant steps to do things differently. Warby Parker is an eyewear retailer that initially only operated online. However, it’s stepping up its smart commerce investments by increasing its spending on physical stores.
People assisting the company with this transition say one of the goals is to cater to today’s connected consumers. That means blurring the line between in-store and online shopping. When individuals shop at a physical Warby Parker store, they might notice things like smart shelves, smart displays, or even smart packaging. That emphasis on connectivity enables the brand to enhance customization and personalization opportunities as people shop.
Your first attempts at using smart commerce might not be as elaborate, but there’s no issue with that. The idea is to make changes based on the tips above but to do so within your company’s means. Decision-makers may understandably balk at a request to overhaul almost everything about existing operations. However, a wise compromise is to start small and scale up as your resources allow.
Once leaders see the smart commerce strategies paying off, they’ll be more likely to approve further investments. Keep in mind that the best results may not happen immediately. You may need to make numerous tweaks to optimize the outcomes. However, committing to tracking data and metrics is an excellent way to confirm what’s working well and where room for improvement exists.
Try to narrow down a few initial ways to venture into smart commerce at your business. That might mean doing something such as building and deploying an AI algorithm to make product recommendations. It could also involve sending people personalized emails or text messages based on previous interactions with your company.
When Will You Make the Move Towards Smart Commerce?
Today’s world and the people in it are increasingly connected. Shoppers use their smartphones to browse and reserve products that they later pick up at local stores. Technologies such as AR and AI are no longer far-fetched ideas but widely used in various industries, including marketing.
It’s understandable if you’re not ready to go all-in with smart commerce right away. However, at least being open to the idea in the near future will help your company remain prepared for whatever’s on the horizon.
About The Author
Eleanor Hecks is the Editor-in-Chief of Designerly Magazine, an online publication dedicated to providing in-depth content from the design and marketing industries. When she's not designing or writing code, you can find her re-reading the Harry Potter series, burning calories at a local Zumba class, or hanging out with her dogs, Bear and Lucy.