Ecommerce Digital Transformation: Why It’s Important and How to Exploit It



Ecommerce has taken center stage in the business world for decades now and it seems to be waxing stronger every day. Many experts believe that we’re yet to witness the best of times for eCommerce, as the industry continues to reach new heights through digital transformation. As a heavily data-driven industry, eCommerce is one of the frontline industries that are ripe for exploiting the benefits of digital transformation. “The eCommerce industry will experience dramatic changes in the coming few years, and digital transformation is going to be the major driving force behind that,” said Bill Borrelle, CMO of Pitney Bowes during an interview.

Digital transformation is key to the industry’s ability to thrive under harsh economic conditions that have taken a toll on many other industries. With digital transformation, eCommerce will continue to woo more customers from the traditional commerce world with online shopping experiences providing unparalleled levels of comfort, convenience, and competitive pricing.   

In this piece, we’ll look at how the industry is gearing up for explosive growth in the future. But first, we need to clear the air on what digital transformation is and how it’s fueling unprecedented growth rates in the eCommerce industry.

What is Digital Transformation?

Gartner, one of the most reputable online research and advisory companies in the world, defines digital transformation as a term referring to “Anything from IT modernization (for example, cloud computing), to digital optimization, to the invention of new digital business models.”

For an industry that’s inherently digital such as eCommerce, digital transformation – in the light of the definition above – simply implies opting for more digitally-powered solutions rather than otherwise. For instance, it could imply integrating technologies like A.I. and machine learning rather than hiring human agents to process data or handle certain tasks.

Future trends in the eCommerce space will revolve around the adoption of these technologies. They’re what most experts are looking out for in the space, with many expecting the technologies to bring about disruptive changes.

However, many experts also believe that it may not be a joy ride all the way. Let’s take a look at some of the most critical challenges currently hampering digital transformation eCommerce growth.

The Major Challenges in eCommerce Digital Transformation

Growing Concerns About Online Data Privacy

Now and then, there’s news of a tech giant getting embroiled in a data privacy scandal. If the company isn’t accused of fraudulently collecting and selling customers’ data to third parties, then there’s a serious data breach and hackers have access to customers’ databases. 

Statistics from Pew highlight growing public concerns about these data privacy breaches. According to the Pew Research report,

  • Some 59% of people don’t trust online databases, and about 70% believe they lack credibility.
  • 72% of people believe that companies exploit their personal data behind their backs.

Non-Technological Requirements of Digital Transformation

Technology is only but one pillar of digital transformation. Successful digital transformation involves initiatives in other areas of an eCommerce store, including leadership, employee training and development, financial planning, etc.

Many people focus only on the technologies, failing to realize that optimizing machines and automation but not the humans interacting with them and the environment in which they’re used will lead to less desirable outcomes.

Uncertainties Shrouding Technologies Like A.I.

Technologies like A.I. invoke both optimism and fear in people. The mixed reaction from people is hampering the development and adoption of A.I. across the board. Results from a study by Pegasystems show that:

  • 60% of people are extremely skeptical about giving A.I. free rein over the decision-making processes of a business. 
  • 52% distrust A.I. completely and believe it’s biased.

Now that we’ve clearly articulated what digital transformation in eCommerce means and the challenges currently limiting its potentials, let’s see how the industry is dealing with these challenges and leveraging on the benefits of digital transformation.

ECommerce Digital Transformation Trends to Watch for

Ecommerce strategies focused on digital business models, cost management, and customer experience

One of the major appeals of eCommerce is the availability of an unparalleled array of options and alternatives for users to choose from. As such, customers have come to expect the best customer experience and to be able to find exactly what they need whenever they shop online.

This makes customer experience a crucial factor that store owners need to focus on. Most companies are now looking to adopt a ‘flywheel approach’ with customer experience as the focal point of their business operations. 

Businesses can edge competition by cutting costs in various areas, automating various processes, etc., in order to redirect more resources towards enhancing their customer experience.

The 5G Revolution 

One of the main reasons behind the incredible growth of eCommerce is the rapidly growing number of smartphone users. The rollout of 5G networks has picked up steam across the globe o expand connectivity infrastructures to gear up for a boom in mobile connectivity subscriptions. 

5G promises larger bandwidth capacities to power mobile connectivity on a much larger scale with unprecedented connectivity speeds. According to some estimates, the transition to 5G will add more than 2 billion shoppers to eCommerce markets.

The rush for analytics and virtualization

Virtual reality and augmented reality are also technologies that are hot on the digital transformation agendas of many leading eCommerce stores. Many eCommerce businesses are also coming to appreciate the value of analytics that produce insights on cost reduction, marketing, and innovation.

Process automation is all the rage

From help desks to logistics, inventory management, order tracking, and data syncing, a host of business processes are increasingly becoming automated in leading eCommerce stores.

Adopting cross-platform support

Businesses are looking to give customers access to all the support and information they need on just about any type of smart device, social media platform, and other media platforms that their customers may use. One of the most important aspects of an omnichannel customer experience strategy is cross-platform support.   

Order fulfillment

Another important aspect of customer experience that most stores are paying more attention to these days is order fulfillment. Many eCommerce stores are looking to use technological strategies to accelerate delivery times, reduce delivery costs, and scale their operational costs on-demand. A product fulfillment company can reduce overhead and improve distribution.

The push for greater privacy

Companies – including industry heavyweights can no longer afford to ignore the growing public sentiments towards data privacy issues. More efforts will be made by companies in this area to ensure that such concerns do not prevent excellent customer experience. 

The rise of B2B eCommerce

B2B eCommerce refers to companies selling goods and services to wholesalers, manufacturers, distributors, and other types of businesses. Reports show that growth in this sector of eCommerce is outpacing that of the B2C sector, which deals with products and services for end consumers.