The Outburst of Digital Commerce

Sneha GautamRetail & E-commerce

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The year 2020 has been a point of inflexion, triggering an irreversible shift in how businesses and their customers interact and how value is perceived. Salesforce portrays the switch, reporting that 60% of interactions are currently taking place online, and 83% of customers expect flexible shipping and fulfillment options. Consequently, digital commerce, which was already in a solid stride before the COVID-19 landfall, has been thrown into top gear by the pandemic-induced changes, creating massive opportunities for growth and leaving businesses clamoring to keep pace. For instance, according to ‘DigitalCommerce360’, online retail sales surged 39% in Q1 2021. In response, enterprises must rapidly adapt by reinventing their organizations, culture, and technology landscapes to deliver agility and relevance.

Businesses are indeed alive to the demands of the New Normal and are not shy of joining the Digital Commerce bandwagon. Hampleton Partners observed accelerated M&A activities in the space, recording a phenomenal $117 billion in disclosed transactions. For example, a study using the EY Embryonic Platform found that May to July 2020 pulled in over $10 billion worth of investment into the retail vertical covering diverse initiatives including expanded logistics capabilities, asset-lite facilities, dark-stores established exclusively for online shopping, and digital leverages like AI and Blockchain.

Digital commerce and online buying behavior steering the shift in retail

In a closely contested space like retail, now twice as many insiders identify digital commerce as a long-term strategic priority compared to the pre-pandemic era. The trend is reflected by the fact that despite rising vaccination rates, collapsing daily average infections, and economies across the states consistently opening up, Americans are still bullish on online shopping channels, accounting for at least 20% of all retail purchases. Clearly, the businesses are in for a long haul, and HBR notes that retailers need to look beyond just investments and find out the enabling customer experience (CX) that can differentiate them against the competition.

With the decade’s worth of projected growth materializing within a quarter in 2020, the ground realities are, of course, lucid and remain primed for disruption. Here retailers looking to recalibrate their digital commerce roadmaps and elevate revenue stands to benefit from integrated solutions that can constantly contextualize and deliver customer-centric experiences with the evolving focus of the buying behaviors and market dynamics like:

Ease of payment: With more than 77% of the Gen Z-ers looking for new ways to consume existing products and services, purchase decisions are made by much more than just affordability. Price is no longer the only deciding factor in how an online retail customer perceives a brand. The ease of payment, integration with the customer’s preferred banking channels and wallets are also emerging as significant determinants for customer stickiness. In fact, ‘’ found that nearly 50% of consumers who can’t use their preferred payment method are likely to abandon a purchase. Further, 70% of the online shoppers confessed that the checkout experience is their most persisting pain point.

Here investments in integrating with multiple payment gateways at a lower per dollar spent commission can improve the checkout experience for the customers, keeping them engaged and loyal. Also, Gartner reveals that seamless digital payment methods, discount vouchers, and hassle-free refunds to the actual source of payment can instill higher confidence in online shopping for at least 36% of the customers.

Last-mile fulfillment: The New Normal has indeed raised the bar higher on the door-step delivery of products and services, and consumers today are equally focused on accessibility and convenience as they are on affordability, if not more. Fitness equipment, streaming devices, white goods, etc., were traditionally purchased offline after a thorough comparison of their price and features. But at present, there has been a pronounced spike in the purchase of these products through digital commerce and online delivery channels.

A study found that 79% of the US consumers are not ready to compromise on the delivery of their purchases due to COVID-related disruptions, indicating that it is no longer a reasonable excuse for service outages and unavailability. To stay competitive, retailers can no longer consider fulfillment in isolation and must imagine it as the cornerstone of high-quality customer experience. It calls for integrated logistics support and WMS availability across geographies that can be leveraged on-demand to ensure end-to-end coverage of the fulfillment workloads with high reliability.

Omnichannel engagement: In the pre-pandemic years, consumers preferred to speak with a customer support agent for clarifications. But in the New Normal, since there are fewer support agents accessible due to the inherent change in the nature of work, most of the queries are being serviced by websites/mobile apps and chatbots. However, this has also made the customer extremely aspirational. Now they expect to engage with the brands of their choice via mobile or web, online marketplaces, or even via social platforms.

Today, 83% of customers want to interact immediately with a service agent while connecting with a brand, up from 78% in 2019. Also, 68% of the customers expect businesses to demonstrate empathy. In fact, now, customers turn to an average of nine channels to browse product listings, get educated and make purchases. Therefore, the retailers must resolutely invest in an omnichannel CX strategy. Digital solutions that can successfully establish a single source of truth for engagement across all channels and make the personalized and contextual delivery of experience possible can improve customer satisfaction and improve churn rate.

The contemporary omnichannel world promises exponential growth in businesses’ opportunities to engage, sell, and improve revenue realizations. Nevertheless, retailers must understand that each digital commerce channel will present its unique challenges in improving customer experience. Website designs may allow only so much content to drive informative conservations among consumers for high-consideration purchases. Mobile commerce might limit the branding elements necessary to build ongoing affinity. A lack of tech maturity might undermine efforts to deliver a good experience via social marketing.

The challenges can be further aggravated by the choices and preferences of the customers who are likely to engage with businesses in multiple formats and across multiple touchpoints, making the pursuit of an excellent customer experience one that needs to weave together information from disparate sources. Here a business can pull ahead of the competition with the right digital engineering acumen and impactful experience delivery capabilities that strikes a chord with the customers, evoking positive brand sentiments, compelling them to revisit, and of course, repurchase!


The happenings of the last 18 months have driven one of the sharpest growth in the digital commerce vertical. They have projected broad-based and observable shifts, from payment methods, supply chains, and distribution networks to consumption behaviors. For example, several manufacturers turned to Direct-to-Consumer platforms with uncertainty in the supply and distribution operations. Likewise, as more and more brick-and-mortar stores went online, even consumers adapted by opting for curbside pick-up trends across different categories. But regardless of how consumer behavior and preferences continue to evolve, to stay competitive, the retailers must attempt to use the current tailwind brought by the new digital commerce dynamics to foster enduring customer relationships that can stand the test of a disruptive future.


Sources: Salesforce, DigitalCommerce360, Hampleton Partners, Harvard Business Review, CustomerThink, Shopify, Gartner.