In this episode of our AnalystANGLE series, I’m joined by Kelly Goetsch, Chief Strategy Officer for commercetools, for a conversation centered on insights gained from a couple of research studies published by commercetools focused on the state of ecommerce, exploring the replatforming and migration trends for 2024, and honing in on investments that drive holiday sales.
Unpacking the State of eCommerce: Replatforming and Migration Trends (watch the full episode here):
The State of the eCommerce Industry: Key Trends
Goetsch shared that he’s seeing a rise in consumer sentiment, as folks are feeling slightly more optimistic about finances and looking more positively at the economy. Consumers are ramping up buying on mobile devices and TikTok shopping is very widely used.
Customer experience remains important, with brands tapping influencers for campaigns, soliciting user-generated content from buyers, and doing things to get closer to customers like offering up special access and/or behind-the-scenes tours that let them know they are valued. Goetsch believes that to differentiate in retail, retailers have got to compete on experience, since with the Amazons and Walmarts of the world, chances are good they’ll not be competing on price. That’s why the onus is on retailers to uplevel the ecommerce experiences they are serving up.
Why Replatforming and the Move to Flexible, Scalable Platforms
Goetsch and I talked a bit about replatforming and the move that customers are making today toward more flexible, scalable platforms. With the customer demand for hyper-personalization, flexible scalable platforms is the way that ecommerce vendors can enhance customer experiences, spur innovation, and stay competitive.
The State of eCommerce: Replatforming and Migration Trends for 2024
Goetsch and I walked through some of the highlights from commercetools’ newly published research report, The State of eCommerce: Replatforming and Migration Trends for 2024, which explored the replatforming strategies of leading retail, B2B manufacturing, and consumer packaged goods.
One thing that immediately jumped out of the State of eCommerce Report was that there is clearly some dissatisfaction in the industry — only 14% of respondents reported being satisfied with their current platforms. Tech limitations impact organizations in many ways. Goetsch and I discussed those limitations and how they impact an organization’s ability to both serve customers with best-in-class experiences and also help them stay competitive.
Other highlights from the report included the fact that there tended to be a split in pain points with survey respondents’ current ecommerce platform for potential migrators. These pain points included limited scalability (35%), delayed implementation (31%), low-quality customer support (31%), poor end-user experience (31%), and lack of advanced features (31%).
Technological limitations directly impact an organization’s ability to enhance customer experiences and maintain competitiveness in a demanding market. What we know to be true is this: the market is demanding and customers are not patiently waiting for you to get your act together. Customers know what best-in-class ecommerce experiences look like, and they want them – now.
Flexible, Scalable Platforms Drive Growth and Revenue
Competitiveness is something that Goetsch and I have touched on in numerous conversations, as well as in this podcast episode. The ability of an ecommerce platform to help an organization compete in today’s highly competitive retail environment is critically important. The ability to compete was the number one metric identified by both recent and potential migrators to assess the value of their investment — 67% of recent migrators cited this metric as the most important, as did 58% of potential migrators.
It was also interesting to see data points from commerce tools’ research show that
90% of migrators to flexible, scalable platforms reported they are seeing significant revenue and sales growth. In our conversation, Goetsch and I explored why adopting composable commerce solutions and leaning way into flexibility and scalability is leading to this ability to more effectively compete, and drive revenue and sales growth at such a rapid pace, and we also explored what other factors are at play here.
Unwrapping Success: Key Investments Driving Holiday Sales
Our conversation shifted to the holiday season and exploring some of the findings from commercetools holiday report: Unwrapping Success: Key Investments Driving Holiday Sales, and discussing that business outlook, along with why there’s an urgency in investing in tech upgrades that are centered on creating better customer experiences. The three main areas business leaders reported investing to mitigate risks and drive holiday sales in 2024 are: Modern ecommerce platforms and composable commerce, social commerce, and AI.
Modern ecommerce platforms and composable commerce. Embracing modern ecommerce platforms and composable commerce helps meet customer demands, drive sales, and business growth by enabling brands to quickly and easily create those personalized experiences that customers demand. The commercetools holiday report data indicated that 41% of brands and retailers are upgrading their ecommerce platforms and commerce platforms in order to compete against the Amazon, Walmarts, Sheins and Temus of the world.
Social commerce. The report showed that 77% of respondent companies are planning on boosting social media channel usage in the 2024 holiday season and beyond. Facebook Shop/Marketplace (which 71% of businesses plan to use for holiday sales) and Tik Tok (where 55% of companies plan on investing for the holiday campaigns), along with other platforms like Instagram Reels, are where customers are. If you want to reach them, you’ve got to be there with ecommerce solutions that are efficient and serve up great customer experiences. I will admit that there’s probably not a day that goes by that I don’t make a purchase of something I discovered in a social channel and I am definitely not alone on that front.
That’s why driving social commerce capabilities is critically important to retailers. An impressive 90% of survey respondents agree that composable commerce will enhance their customer experiences this holiday season. In addition, 7 out of 10 retailers report investing in diversified payments channels, and 88% see composable commerce as the key to their ability to be flexible, launching more capabilities faster and easier, and delivering better customer experiences.
Artificial intelligence. For today’s consumers, personalized experiences are not a trend but an expectation. The commercetools Driving Holiday Sales report showed that 62% of businesses are already leveraging AI, with another 32% reporting they are planning to implement it. But it’s not just about using AI, it’s about using the right kind of AI to drive measurable results and Goetsch and I discussed that a bit in our conversation.
On a final note, the Driving Holiday Sales survey respondents indicated that site performance and customization was a key success factor for them, with 94% reporting their migration significantly improved their site performance, and 86% reporting that their new platform offered more customization.
Wrapping Up
As I mentioned at the start of the conversation with commercetools Kelly Goetsch, I love the ecommerce space because I not only get to experience it from an analyst’s perspective, but also because I live deeply immersed in it daily — from a customer perspective. I can’t tell you how many transactions I abandon because the experience served up is less than ideal, and that’s why retailers feel a sense of urgency in making the transition to composable commerce, replatforming sooner rather than later, and delivering the kind of best-in-class ecommerce experiences that customers demand.
That’s a wrap for this episode, thanks for joining Kelly and me and be sure and check out these reports in greater detail if you’re thinking about your own ecommerce replatformization and transformation journey. There’s no better time to get started than right now.
Resources mentioned here:
State of eCommerce: Replatforming and Migration Trends for 202
Unwrapping Success: Key Investments Driving Holiday Sales
See more of my work here:
Open Banking’s Watershed Moment: A New Chapter in Digital Payments
Corcentric CEO Matt Clark on Removing Friction from B2B Commerce and the Evolution of the CFO Role
