Study Shows Digital Commerce Maturity Among Consumer Brand Manufacturers Leads To Revenue Growth
May 20, 2020
As of this writing, half of the world is in lockdown due to COVID-19. Digital-only consumer shopping has become the new normal, and it will forever change the retail experience.
To remain relevant in the eyes of customers, as well as to remain in business, merchants across the globe are turning to a variety of digital commerce channels, including direct-to-consumer . This requires the implementation of new processes, technologies, and infrastructure – in effect, accelerating digital transformation. Understanding digital commerce maturity – namely the key processes, technologies, and strategies needed to deliver next-generation, optimized customer experiences – is essential for brands and businesses to grow revenue and remain competitive in this rapidly evolving global landscape.
To better understand the role digital commerce maturity plays in delivering differentiated customer experiences, Adobe, in partnership with 451 Research, commissioned a custom study of consumer brand manufacturers that sell their branded products digitally via a mix of direct-to-consumer and retail channels across key global markets: the U.S., the U.K., Germany, Spain, Australia, Brazil, France, and the Netherlands. A total of 356 decision-makers and influencers in small to midsize businesses were surveyed.
It’s important to note here that this study was completed in February, before widespread lockdowns due to COVID-19. Ongoing monitoring by 451 Research shows that the pandemic and its economic impact have accelerated the adoption of commerce technologies not only to support the changing needs of consumers, but also to support businesses’ fundamental shift toward online experiences, whether the merchant offers essential or nonessential goods or services.
Today, we’re unveiling the results of this study, called “Digital Commerce Maturity Leaders Deliver Revenue Growth.” This report focuses on the high-level IT trends, digital transformation pain points and opportunities, and technologies exerting influence over the digital commerce experience. It also offers a road map to achieving global digital commerce excellence.
Are You A Digital Commerce Leader Or Laggard?
Consumer brand manufacturers’ maturity in digital transformation directly correlates to their attitudes toward new technology adoption, leading to the emergence of three distinct digital commerce personas and philosophies:
1. Leaders are actively digitizing their businesses using formal digital transformation strategies and are early adopters of technology.
2. Learners are in the planning stages of digital transformation, actively researching a formal strategy and taking a pragmatic approach to new technology adoption.
3. Laggards have no formal digital transformation plans. These businesses are at a crossroads as they try to carry on with some digital capabilities in place or face closing their doors.
With the exception of a few industries, digital commerce leaders were best-placed to pivot to an all-digital approach after reporting an 80%-plus improvement on key performance metrics, along with healthier revenue growth, coordinated management of digital initiatives, and improved omnichannel engagement and operations. Being twice as likely to have a dedicated digital strategy leadership, and with 84% tracking and measuring the customer journey across all touch points, allows them to more readily adjust to the channel disruption associated with this pandemic.
The three personas reveal significantly different philosophies on how to approach digital commerce transformation strategy and execution, leading to an innovation gap separating leaders from laggards, as shown in this chart:
Digital Commerce Maturity Framework: From Unstructured To Optimized
Before implementing a strategy to become a leader through digital commerce maturity, businesses should assess where they are along the path. The goal is to align your brand strategy with the processes and investments in modern commerce technologies that will provide the best opportunities for growth and competitive differentiation.
The top-level results of the maturity model analysis from the study show that, on average, the maturity curve for businesses roughly resembles a bell curve:
1. Early-stage organizations: Only 7% of survey respondents said their companies are providing primarily unstructured and siloed experiences.
2. Midstage organizations: The majority of businesses fall somewhere between defined (34%) and managed maturity (39%). These companies provide standardized processes with some personalization techniques but are either somewhat reactive or operational.
3. Advanced-stage organizations: Only 19% of businesses provide optimized experiences through investments in new technologies that meet rising customer expectations in the experience economy.
With 69% of digital laggards having limited or basic digital commerce enablement focused on transactions in one channel, it’s important to develop a deeper understanding of all the aspects of providing optimized customer experiences across multiple channels. Understanding the business value of digital commerce maturity requires businesses to assess where they are with respect to several key areas: strategy and brand focus, commerce platform, omnichannel capabilities, data and analytics, and customer experience. Companies will also be at different stages within these key areas as they move up the maturity curve from unstructured experiences toward optimized experiences.
Magento Can Help You Become A Digital Commerce Leader
Now more than ever, the time to move higher up the digital commerce maturity curve is vitally important for long-term business success. Regardless of where you are in your digital commerce journey, you may already be aware that it can be challenging to catch up to digital commerce leaders – but it’s certainly achievable if you begin the digital transformation journey now.