The 5 Stages of the Digital Commerce Journey and Their Impact on the Supply Chain

Moving forward, retailers will need to source products through supply chains that are transparent and give consumers insight into where their products are coming from.

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Consumer preferences are becoming increasingly digital-first, forcing retailers to focus more closely on their mobile and ecommerce capabilities. The days of simply having an ecommerce site and being able to capture customer attention are long gone. Modern digital shopping experiences are defined by transparency, accuracy, and personalization from start to finish. As retailers work to deliver exceptional digital customer experience at scale, they are having to invest more in the digital infrastructure and smart supply chains needed to seamlessly match real-time demands and rapidly changing consumer preferences.

Trends driving digital customer experience in 2020

Online retail has evolved from simply “online shopping” to an “omnichannel experience” where consumers can have seamless shopping experiences regardless of the channel or device they are shopping through. As a result, convenience has become king for consumers when shopping online and retailers are having to put in more work to ensure that friction is reduced across channels to make the shopping experience as convenient as possible. Unfortunately, only 10% of consumers agree that most brands meet their expectations of a “good experience.”

In addition to the experience itself, consumers also want more transparency throughout their shopping journey. The need for transparency has placed added pressure on retailers to understand and intentionally source their supply chains. Likely exacerbated by the COVID-19 pandemic, according to Nielson, more shoppers want complete transparency throughout the entire supply chain from origination to distribution.

Trends, like convenience, have driven up the need for flexible supply chains that enable retailers to customize every step of the customer journey. Likewise, customers expect that inventory is current and available across all channels and that their purchases be delivered quickly and responsibly, regardless of how complex a retailer’s supply chain is. At the end of the day, retailers are moving beyond optimizing the customer-facing aspects of digital commerce and are looking closely at the digital transformation of back-end processes and the supply chain.

According to Avalara and PSFK’s Digital Commerce Playbook, there are five main stages in the digital commerce journey, including:

1. Shopper marketing and discovery

2. “Store” experience and design

3. Shopper education and experience

4. Transactions, payments and tax

5. Fulfillment and post-purchase support

The first three stages of the digital commerce journey focus on acquiring, supporting and retaining customers throughout their shopping experience. In order to meet customer expectations throughout their time shopping, businesses need to be able to anticipate what the customer is looking for in order to provide the personalized experience they are looking for. This requires retailers to enable features like augmented retail for virtually created product interactions and social shopping experiences that allow customers to browse while scrolling through social media. While these stages aren’t directly tied to the supply chain, being able to provide personalized experiences requires a thoughtful approach to supply chain management that ensures customers have access to the products they want when they want to purchase them.

Once a customer reaches the transactions, payments and tax stage of the digital commerce journey is where the impact on and importance of the supply chain becomes readily apparent. Modern retailers are enlisting the help of digital tools to streamline and secure the checkout and payment experience for customers. Because consumers expect their payment information to be automatically provided across all channels, retailers are updating their back-end processes including everything from point of sale systems to supply chain management. Likewise, it’s imperative that retailers have the technology in place to accurately calculate taxes to avoid surprise costs for customers and optimize conversion, while also mitigating compliance risk. Retailers need resilient payment and supply chain systems to provide the flexibility and security needed to facilitate a streamlined checkout process and mitigate interruptions during delivery. From asset-tracking artificial intelligence to delivery route optimization, retailers are leveraging intelligent tools to streamline end-to-end operations and supply chain management to improve the efficiency of delivery.

When we look at delivery and fulfillment, frictionless logistics has become a key focal point for retailers who are looking to not only provide products but make sure that they are delivered quickly and conveniently. As a result, consumers have more control over how, when, and where they can receive purchases and initiate returns. To enable this “have it your way” approach to delivery and fulfillment, retailers must rely on agile supply chains and flexible operating optionality that can centralize customer’s needs to align with their preferences. For example, Kroger has reconfigured its supply chain in a pilot program with Walgreens to enable shoppers to order their groceries online and pick them up at Walgreens locations near them. 

The modern digital commerce journey is all about consistency and convenience across channels to meet the wants and needs of customers. Consumers have more options than ever before when it comes to where they shop and how they do it, which has put the onus on retailers to adapt in order to capture their attention and create customer loyalty. As a result, the impact of a customer-centric approach to digital commerce on supply chains is far-reaching. 

Moving forward, retailers will need to source products through supply chains that are transparent and give consumers insight into where their products are coming from. The current global pandemic has put the safety of products top of mind for consumers and many want to know that their products are coming from sustainable, values-driven sources. Supply chains will also need to become more agile to enable a flexible approach to customer service where consumers can customize everything about their products. Lastly, regardless of complexity, supply chains will need to support responsive operations that enable consumers to make purchases on any channel and receive or pickup their orders in a timely fashion.