* This article was originally posted on Forbes.com *
The future of commerce is consumer driven, and consumers want convenient, personalized, technology-enabled shopping experiences. As Willy Kruh, KPMG’s global chair of consumer markets, said, “Today’s consumer no longer goes shopping, but is shopping, all the time and everywhere.” Studies and surveys support that assertion:
• Eighty-nine percent of millennials, on average, said having access to real-time product information would influence their choices.
• Forty-three percent of consumers are receptive to the idea of retailers personalizing prices based on their shopping patterns and demographics.
• Seventy percent of consumers say technology has made it easier than ever to take their business elsewhere.
The manner in which goods and services exchange hands will be different in the next five to ten years. Things will be purchased electronically more than physically. Delivery vs. pickup will be the norm. Devices will place more orders online than will people in the near future (dash buttons or internet of things-enabled devices like refrigerators that order themselves a new light bulb, or a medical device that orders itself a new sensor, etc.). In summary, commerce will be redefined by the following four pillars:
1. Individualized Shopping Experiences
Commerce companies deal with hundreds of thousands of customer identities. Increasingly, consumers expect brands to know what they want and to be offered individualized experiences based on their interests. While intelligent ads based on a user’s search history seemed imposing not too long ago, it’s now expected that our browsing data will be used to populate options that fit our taste. And of course, commerce companies have to consider the delivery experience. Shoppers want orders to arrive on their terms: two-day delivery, same-day delivery, orders from different retailers shipped together, assembly in home … the options will only grow.
2. Customized Products And Delivery
In 2015, Gartner suggested that organizations that invest in personalization would soon outsell companies that do not — by 20%. Years ago, Nike made waves with the introduction of NikeID capabilities. Shoppers could customize everything from color to inscriptions, and competitors responded by offering similar options, even in their brick-and-mortar locations. Salomon Shoes, for instance, developed a customized mesh shoe with a top runner, and now you can walk into a Salomon store and have a shoe fitted directly to your foot.
3. A Blend Of Physical And Digital Experiences
Companies are delivering more value through the physical devices they sell by tying them to a digital ecosystem. Tesla is not your average consumer brand, but they make for a good example nonetheless. New features can be deployed to vehicles via software updates. In the past, drivers waited three years for leases to expire before receiving an upgrade.
In another physical/digital crossover, wearables like the Fitbit offer users a website to view their exercise and sleep patterns via data visualizations. Business intelligence and data analytics allow companies to offer hyperconnected consumers more than just a physical product, and we’re just seeing the beginning.
4. Implementation Of A Data Management Platform.
Constant ingesting and analysis of data from multiple sources is necessary to support everything in the future of commerce. Companies need data from customer purchases, second-party sources like partners and wholesalers and third parties such as Google Analytics — ideally in a single platform. Similarly, they need to connect the components of their physical networks: warehouses, supply-chain partners, transportation and so on. Many brands already use data management platforms and the rest must follow suit.
Consumers are loyal to brands and will take their business to their favorites before shopping elsewhere. Leaders that embrace the four pillars of consumer-driven commerce will improve their customer loyalty and be rewarded with increased market share. The companies that stick to their old ways? They’ll likely be obsolete in 10 years, destined to the same fate as Blockbuster, Circuit City and Sports Authority.