With lockdowns and shelter-in-place restrictions, consumers couldn’t visit their favorite stores, and retailers had to find other ways of reaching their customers. People turned to their mobile phones and laptops to make purchases online that they could pick up at the store or have delivered. In light of this shift, it’s no surprise that retail e-commerce sales leaped from US$3.4 billion in 2019 to US$4.3 billion in 2020. That’s over 25% of growth.
That’s not to say that retailers weren’t already incorporating e-commerce into their business models. The last decade has shown an ongoing transition towards omnichannel shopping experiences, where customers have the option to either purchase products online or in-store. What the pandemic did was accelerate this phenomenon, pushing retailers that were on the fence to really invest in building a digital presence and allowing their customers to shop in ways that make sense to them.
Today, building a digital arm for the business model is a no-brainer for most retailers. Beyond being a necessity as we continue to deal with COVID-19, it’s also key for delivering better, more personalized customer experiences across multiple channels.
But, what does that look like in practice? Let’s take a look.
One of the key building blocks of an omnichannel presence is adopting a headless commerce model. In this approach, the user interface (UI) or front end is completely decoupled from the e-commerce back end. Instead of being tied together, information is transferred between both sides of the ecommerce platform via APIs.
The benefits are manifold. For one, this means that retailers can keep their UI current and equipped with the digital features that their customers are used to, without having to bring their back end into the equation.
This takes away a lot of the complexity from deployments and makes them faster – making it easier for brands to stay on top of any changes happening in the industry. In addition, this approach makes the front end much quicker from a load time perspective, reducing the risk of customers leaving their cart before completing a purchase.
Retailers that are adopting this approach are partnering with enterprise e-commerce platforms and digital solutions that can bring it to life. For enterprise retailers that have been operating with a traditional model for years, for instance, there will be a lot of work to do to decouple their existing systems and incorporate this more agile methodology.
And as the industry continues to evolve, we’re also seeing SaaS offerings that open the door for smaller retailers to make the same shift. With scalable models that allow businesses to pay by usage, these pre-built solutions are more accessible for small businesses with a limited digital transformation budget.
Setting up an omnichannel presence based on a headless commerce solution is a great first step, but there’s also more brands can do.
In parallel to these systems, you also need to make sure that your customers can find you online. Optimizing your content for search engine queries, building a strong social media presence, and investing in digital marketing campaigns will be key here.
It’s important to note that implementing these various digital solutions doesn’t have to happen all at once. For many retailers, the move to a robust ecommerce system takes a lot of time and money — and they can’t always afford to do it in a single big move. In these cases, we suggest a phased approach where you prioritize the headless commerce approach. Once you have a well-designed, seamless, and interactive UI that’s decoupled from your back-end, you’ll have a lot more room to deploy features that make life easier for your customers.
Follow this with step-by-step adoption of the digital features we’ve outlined above.
As the retail industry continues to evolve and adopt different ways of doing things, there are even more opportunities on the horizon. Particularly, we’re keeping our eye on loyalty management solutions and the role they play in sale attribution, engagement building, and organizational partnerships. We believe that there will be growth both in in-house development and third-party adoption of these platforms.
Other trends that are bound to shape the industry are a growth in microservices, an ongoing focus on user experience, and social commerce on networks like Instagram and Facebook. The growth of digital marketplaces may also spell a change for how small retailers engage with customers and sell their products. Interactional Commerce, As-a-Service Models, and Progressive Web Apps (PWA) are also poised to make an impact.
Operating purely in brick & mortar stores is no longer an option. The retailers that want to continue delivering optimized omnichannel experiences to their customers will need to be ready to adapt and evolve to incorporate these new features. And we’re looking forward to helping our customers do just that.
For more information on how Intwo partners with leading digital solutions to help you improve your online retail experience, get in touch.
Digital evolution has become essential for retail because operating purely in brick and mortar stores is no longer a viable option. The COVID-19 pandemic accelerated the shift, but the underlying trend has been building for a decade as customers expect omnichannel shopping experiences. Building a digital arm of the business model is now a no-brainer for most retailers, both for handling continued disruption and for delivering better, more personalized customer experiences across multiple channels. Retailers who refuse to evolve risk losing customers to competitors who already have.
Retail e-commerce growth accelerated sharply during the pandemic. According to Statista, e-commerce sales leaped from 3.4 billion US dollars in 2019 to 4.3 billion in 2020, which represents over 25 percent growth in a single year. The shift was driven by lockdowns and shelter-in-place restrictions that pushed consumers onto mobile phones and laptops to make purchases they would normally have made in store. Many retailers were already moving toward e-commerce, but the pandemic pushed those on the fence into serious investment in digital presence.
Omnichannel retail gives customers the option to purchase products either online or in-store, with a seamless experience across every touchpoint. The last decade has shown an ongoing transition toward omnichannel shopping experiences, where customers can move between channels without friction. The pandemic accelerated the trend significantly. Beyond pure necessity, omnichannel is now key for delivering better, more personalized customer experiences and meeting customers wherever they prefer to shop. Implementing it well requires the right technology foundation and a clear strategy for connecting online and offline.
Headless commerce is one of the key building blocks of an omnichannel presence. In this approach, the user interface or front end is completely decoupled from the e-commerce back end. Instead of being tied together, information is transferred between both sides of the platform via APIs. The benefits are significant. Retailers can keep their UI current with the digital features customers expect without having to touch the back end. Deployments become less complex and faster, while front end load times improve and reduce the risk of cart abandonment.
AI and machine learning capabilities play an important role in delivering personalized offerings to customers, particularly when paired with analytics solutions. With the right technology, retailers get a better sense of how customers engage with brands, what products appeal to them, and how they progress through the customer journey. That information can then be used to automatically offer promotions and product suggestions aligned with each customer’s needs and behaviors. The result is more relevant experiences that lift conversion rates, basket size, and overall customer loyalty over time.
Loyalty programs are an important tool for capturing customer activity both online and in-store. A loyalty card or customer number linked to the customer’s online account lets retailers know when shoppers are visiting physical stores and when they are browsing online. This connects the dots between online and offline interactions, creating a clearer picture of each customer across every touchpoint. The resulting unified customer view supports better personalization, smarter merchandising decisions, and more accurate marketing investment. It also informs the kind of organizational partnerships that will increasingly drive retail growth.
Big data analytics is one of the major forces driving the retail industry forward. Many retailers operate with big data warehouse platforms that extract data from the digital solutions running across the business. By collecting a robust set of customer data and analyzing it with the right tools, retailers can feed marketing and campaign automation platforms to make them as effective as possible. The approach uses data from lower in the marketing funnel to improve performance at the top of the funnel, which lifts overall return on marketing spend significantly.
For many retailers, moving to a robust e-commerce system takes a lot of time and money, and the investment cannot always be made in a single big move. A phased approach helps. The recommendation is to prioritise the headless commerce approach first. Once a well-designed, seamless, and interactive UI is decoupled from the back end, there is significantly more room to deploy features that make life easier for customers. From there, step-by-step adoption of AI personalization, loyalty programs, and big data analytics builds the full digital arm of the business.
Several trends are poised to shape retail’s next evolution. Loyalty management solutions will play a growing role in sales attribution, engagement building, and organizational partnerships, with growth both in in-house development and third-party adoption. Other trends include microservices architectures, a continued focus on user experience, and social commerce on networks like Instagram and Facebook. The growth of digital marketplaces may also change how small retailers engage with customers. Interactional Commerce, As-a-Service Models, and Progressive Web Apps are likewise poised to make a significant impact.
Intwo partners with leading digital solutions to help retailers improve their online experience and embrace digital evolution. As a Microsoft Solutions Partner and Azure Expert MSP with more than 20 years of experience and over 1,000 enterprise customers across 40 countries, our team handles everything from e-commerce platform setup and headless commerce architecture to AI and analytics integration. We offer domain experts who cover retail alongside manufacturing, distribution, real estate, and professional services. The goal is an omnichannel retail platform that grows with customer expectations rather than lagging behind them.
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