online commerce: plotting a course to personalization

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Online commerce: Plotting a course to personalizationVanson Bourne research reveals challenges brands face in delivering contextual commerce and the need for content and commerce to coexist in one digital marketing platform

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Contents

Introduction �� 2

Summary of key findings �� 2

The online commerce revolution �� 3

The continuous customer journey �� 5

Creating and managing customized content �� 6

The next evolution—getting the most out of commerce systems �� 8

Conclusion �� 9

Next steps �� 9

Research scope and methodology �� 10

About Sitecore and Vanson Bourne �� 11

Published 10/16� © 2001-2016 Sitecore Corporation A/S� All rights reserved� Sitecore® and Own the Experience® are registered trademarks of Sitecore Corporation A/S� All other brand and product names are the property of their respective owners� This document may not, in whole or in part, be photocopied, reproduced, translated, or reduced to any electronic medium or machine readable form without prior consent, in writing, from Sitecore� Information in this document is subject to change without notice and does not represent a commitment on the part of Sitecore�


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IntroductionWe are in the midst of a decade-long e-commerce revolution in which the entire commerce ecosystem is shifting, and not just for retailers� In years gone by, only the biggest and most powerful brands had an online presence, but in 2016 nearly all retailers sell to some extent online� Gone are the days when brands must sell through big-box retailers, as more and more are waking up to the realization that if they want to successfully manage customer experiences, they must collect commerce interaction data themselves� Aside from product revenues, the real gold lies with the purchase and customer data that online shopping delivers�

With online commerce now a firmly established part of the wider commerce landscape, the once prominent fight for market share between retailers has now moved online� As a result, businesses find themselves competing not just against the shop next door, but against sales outlets throughout the world� We have moved from “bricks and mortar” to “clicks and mortar�”

This shift means that sales can no longer be considered one individual department in an organization—instead, all departments must work together to drive online commerce success� Increasingly technologically advanced customers demand a customized and optimized digital experience� If a business cannot offer this, then it is likely that their competition will�

Sitecore commissioned independent market research company Vanson Bourne to explore the commerce experience that brands and their solution partners or suppliers want to deliver based on customer needs that they aren’t delivering today� We also researched the need for a platform that seamlessly combines catalog and content management�

To explore these areas in more detail, this study investigates:

■ The importance of online commerce to global brands

■ The challenges organizations are facing when expanding their e-commerce channels

■ Whether organizations are defining and optimizing a complete customer journey—one that incorporates pre-purchase and post-purchase—and whether they are using the technology at their disposal effectively

In addition, Sitecore also sought out the following opinions of those working at organizations that aid and support other businesses with e-commerce systems:

■ How are the implementers of digital marketing platforms coping with ever-changing technology and customer demands?

■ Can providers keep up with customer demands and provide their customers with the tools and features that they need?

With the findings of this study, Sitecore aims to lift the lid on organizations’ ability to manage a seamless digital experience that spans pre-purchase, purchase, and post-purchase phases, as told by the organizations themselves and their IT partners and suppliers�

Summary of key findingsOnline commerce continues to grow

■ 81% of respondents expect their organization’s online sales to increase in the next 12 months, compared to only 6% who expect it to decrease�

■ In the next 12 months, they expect this to continue growing at an increase of 5�59% in total sales on average�

Is investment going to the right place?

■ Total annual spend for the implementation and ongoing management of online commerce is $1�6 million on average for respondent organizations, but only 14% of this is being directed toward the digital user experience�

Single vendor use is desired but remains a distant dream

■ Around four in ten (42%) of decision makers’ organizations outsource or plan to outsource to one vendor to support commerce, but the vast majority (89%) of partners and suppliers report that their customers are stuck using multiple vendors�


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Many are still bogged down in the basics, struggling to move forward

■ Security (43%) and costs (36%) are reported as the most common online commerce challenges for marketing and IT respondent organizations�

■ This preoccupation with security and cost could be why four in ten (40%) find introducing customer-centric features too complex and labor intensive, nearly a third (32%) struggle to accommodate and integrate catalog data into the online sales process, and a quarter (25%) have not been able to implement the personalization features they would like when trying to manage and evolve their e-commerce channels�

Are organizations too narrowly focused?

■ Most rate the “during purchase” stage as their most successful stage of the online commerce process (this from 52% of marketing and 49% of IT decision makers)�

■ And almost half (45%) of the same respondents report that succeeding at this “during purchase” stage remains the most important area�

Struggles with making the most of web content management

■ Seven in ten (70%) already have a web content management (WCM) system but almost a quarter (23%) are looking to change it in the next 12 months�

■ Over a third (36%) of these respondents are unable to use their WCM to personalize the purchasing experience, and a similar number (33%) report having a lack of insight into the purchasing experience from within their WCM�

The true value of WCM and the quest to achieve it

■ Almost all (93%) marketing and IT decision maker respondents believe that a fully comprehensive digital marketing platform—one that enables managing the complete customer journey pre-, during, and post-purchase—would significantly improve their organization’s online commerce, and the majority (77%) believe that a single system would be greatly beneficial�

■ The majority of the same respondent group also believe that their organization could boost revenues (82%) or regain customer loyalty (73%) by using such a platform�

The online commerce revolutionOnline commerce is a key component of many organizations’ sales approach and will continue to be in the future� More than eight in ten (81%) marketing and IT respondents expect that their organization will increase their online sales over the next 12 months—on average this is expected to grow by 5�59% globally�

This expansion is hardly unexpected for organizations, as more and more products and services become available online, and the number of different digital channels through which consumers can purchase increases� The importance of online commerce channels for the success of organizations, therefore, cannot be underestimated�

How organizations expect their onlinesales to change in the next 12 months

Increase

Stay thesame

Decrease

81%

6%

14%

Figure 1: Analysis showing how respondents expect their organization’s online sales to change in the next 12 months, asked of all marketing and IT decision makers (826 respondents)�


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But is this predicted growth being reflected in the investments required to deliver and sustain it? The answer for many decision makers’ organizations is unfortunately not� While spending levels on online commerce are reported to be $1�6 million on average, only 14% of this is directed toward creating and managing the digital user experience—a vital and developing area for always-online customers with high expectations� This limited investment suggests a lack of attention is being given to all areas of the customer journey�

So are organizations selling online struggling to get the most out of their online commerce approach, and do they look externally for help and support? While around four in

ten (42%) outsource or plan to outsource to one vendor for support, the evidence from IT partners would suggest that this is easier said than done� The vast majority (89%) of partners report that their clients are stuck using multiple vendors—pointing toward a limited availability of suppliers that implement a comprehensive digital marketing platform� The desire to find a sole provider does not match the reality for many organizations and their decision makers�

The interest in outsourcing becomes clear when we consider the challenges organizations are facing when it comes to implementing and managing their online channels� Of those without the luxury of a 100% outsourced solution, nearly all (95%) decision makers report experiencing challenges—and a wide range at that� Perhaps a beacon of light to note, however, is that these challenges are not dampening the previously observed expectations about future online commerce growth� But it is a concern that many remain stuck worrying about the basics, with security (43%) and costs (36%) reported as common hurdles�

Among the other key challenges, many organizations (40%) see customer-centric features as too complex and labor intensive� Of more concern is that three in ten (30%) decision makers indicate their organization has difficulty engaging with potential customers pre- and post-sale, and a quarter (25%) have not been able to implement personalization

7%

3%

6%

5%

3%

4%

7%

6%

Average anticipated growth in onlinesales in the next 12 months

US and Canada

France

China

Netherlands

UK

Germany

UAE

Australia

4%Singapore

8%

8%

6%

Norway

Denmark

Sweden

2%Japan

Figure 2: The average expected percentage increase in respondent organizations’ online sales over the next 12 months, displayed by country, asked of all marketing and IT decision makers (826 respondents)�

For organizations to take the next leap forward and start to not just deliver, but develop, their online commerce experiences, they must resolve foundational-level challenges as a matter of urgency� To thrive and compete, it is no longer enough to offer a functional, operational, and transaction-based service—in a rapidly changing environment, those that don’t develop beyond basics risk being left behind�


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features when trying to manage and evolve their e-commerce channels� These are all hurdles that can be traced back to respondents’ narrow focus and the limited investment they are making in the holistic digital user experience�

But technology challenges are not the only type of hurdle respondents face� For many decision makers, cultural or structural barriers are apparent, in particular relating to how departments in the organization are working seamlessly together to better facilitate and grow online commerce� Less than a third (32%) report that there are clear lines of communication in place between senior management and involved departments, and a similar minority (33%) say that information is shared freely� These blocked lines of communication are affecting successful collaboration for many organizations, with only a quarter (25%) agreeing that their departments avoid “siloing�”

This array of challenges threatens to derail organizations on a journey toward greater levels of online commerce� It is clear that many need help to achieve success and need to pay proper attention to better aligning organizational functions and resources� With a lack of sufficient attention on the digital experience and barriers engaging with customers and personalizing content, where does this leave the customer journey?

The continuous customer journeyWith three in ten (30%) marketing and IT decision maker respondents admitting challenges with customer engagement before and after the sale, it is no surprise to learn that most organizations rate the “during purchase” stage as their most successful stage of the online commerce process [similar proportions of marketers (52%) and IT decision makers (49%) report this]�

This lack of attention on (or even neglect of) the entire customer journey, from pre-purchase (advertising, driving traffic) right through to post-purchase (contextual engagement and nurture, personalized follow-ups) becomes even more apparent when we discover that almost half (45%) of surveyed decision makers report that the most important area for success is the “during purchase” stage�

32%

33%

30%

28%

27%

25%

Communication challenges

Di�erent departments collaborate well together

Departments avoid “siloing” that preventsopen communication and collaboration

All departments are driving development andimprovement in online sales at an equal level

All departments involved are given the opportunityto suggest improvements/changes

There are clear lines of communication between seniormanagement and all departments involved in online sales

Information is shared freely between departments

Figure 3: Percent of marketing and IT decision makers who completely agree with the above statements (826 respondents)�

Only the minority (28%) of marketing decision makers say that pre-purchase is their organization’s most successful stage, and just 17% say the same for post-purchase� Given a marketer’s job responsibilities, we can only wonder if this is a revealing admission of failure or a cry for help�

For organizations to grow and manage real customer experiences as opposed to functional transactions, they must shift focus from dollars to differentiation and stand out in an increasingly crowded marketplace�


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An intriguing counterpoint to this narrow focus is that the majority (98%) of decision makers in respondent organizations are actively attempting to drive traffic to their online commerce channels and spending on average $1�2 million in 2016 to do so� But the lack of success with and importance placed on the pre-purchase experience suggests that many organizations are not getting the expected return on investment from this area of the customer journey, or that they recognize changes are needed and are heavily investing as a result� While this is an encouraging sign of improvement, without the right direction and focus, it risks becoming a wasted investment�

It is clear that many organizations could stand to get help with their approach to online commerce and the customer experience they’re managing� As already observed, many hold a desire to outsource in order to harness new systems and technologies� But what of those that are using web content management systems already to manage customer engagement—how have WCM systems helped them manage an end-to-end experience, one that includes commerce?

Creating and managing customized contentSeven in ten (70%) decision maker respondent organizations already have a web content management system in place, but almost a quarter (23%) reveal that they are looking to change their system in the next 12 months� This could point to a lack of satisfaction with the results they perceive they’re getting from it�

Of those from organizations using a WCM system, around two thirds (67%) report that they are able to manage the customer experience both during and after the sale—

30%

46%

Most important part of the sales process

Marketing decision makers

Pre-purchase

22%Post purchase

During purchase

29%

45%

IT decision makers

Pre-purchase

24%Post purchase

During purchase

Figure 5: “Which part of the online sales process do you feel is the most important to be successful at?” asked of all marketing and IT decision maker respondents (826 respondents)�

28%

52%

Most successful part of the sales process


Pre-purchase

17%Post purchase

During purchase

25%

49%

IT decision makers

Pre-purchase

23%Post purchase

During purchase

Figure 4: “Which part of the online sales process is your organization most successful at?” asked of all marketing and IT decision makers (826 respondents)�

Managing the customer experience and making a successful customer experience may be two completely different things�


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but are they really as successful as they think when many indicate they struggle to engage with customers or successfully personalize content? This potential disconnect is reinforced by the fact that a greater number (74%) of IT partners and suppliers believe that organizations are able to manage customer experiences both during and after purchase than organizations themselves do�

Most (85%) IT partners and suppliers also indicate their customers face challenges when using WCM systems� Among the most common are the inability to personalize the purchasing experience (40%)—also recognized as a key challenge for organizations’ online commerce in general—and a lack of insight into the purchasing experience (36%)�

And these challenges are echoed by organizations, with over a third (36%) of decision maker respondents saying they are unable to personalize the purchasing experience and a similar number (33%) reporting a lack of insight into it�

The good news is that all (100%) of the respondents whose organization is using a WCM system find them of value� Personalized purchasing may still be a hurdle that many organizations struggle to overcome, but it is encouraging that the main reported benefit of WCM systems is a more personalized web experience (67%)� The benefits of personalizing and engaging in context of customer interactions on the web could help to steer more organizations to the importance of personalizing commerce interactions�

However, these benefits may be diluted when considering half (50%) are having to use more than one application to monitor behavior and personalize customer experiences on their company website in addition to external websites (51%) and email (48%)� The cause of this? Only around four in ten (39%) IT partners and suppliers see their customers as using a platform that enables them to completely personalize

40%

41%

37%

36%

33%

27%

WCM challenges that IT partners claimtheir customers face

Lack of insight into purchasing experience

2%Don’t know

Built in e-commerce features are too basicand don’t support personalization

13%Customers will not see any drawbacks tousing our web CMS

Disconnect in data from WCM andcommerce system

Incompatibility between their digitalmarketing systems and commerce systems

Inability to personalize thepurchasing experience

Implementing the desiredmarketing features

Figure 6: “What challenges do you believe your customers face when using a web content management system to manage the experience of their customers during and after the sale?” asked of IT partner and supplier respondents from organizations that implement WCM systems for customers (208 respondents)�

60%

67%

57%

54%

50%

48%

Bene�ts of using a WCM system duringand after the sale

0%

Improved security features

Mobile optimization of the web viewing andcommerce experiences

32%Less site crashing, with customers losing theirpreferences and saved items

There have been no bene�ts from using CMSto manage the customer experience

More integrated visitor analytics, to evaluatetra�c and trends

Integrated e-commerce features make it easierto manage the experience from one platform

Site navigation between web content andcommerce experience is more user friendly

More personalized experience fororganizations customers

Figure 7: “What benefits has your organization seen from using a web content management system to manage the customer experience during and after the sale?” asked of marketing and IT decision maker respondents who use a WCM to manage the customer experience during and after the sale (565 respondents)�


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experiences and—incredibly—a fifth (20%) admit they do no personalization at all� Clearly, organizations must significantly improve their use of WCM technology to get in front of a constantly evolving online commerce environment�

The next evolution—getting the most out of commerce systemsThe desire for better solutions is clear� Almost all (93%) decision makers believe that a fully comprehensive digital marketing platform would significantly improve their organization’s online commerce experience, and the majority (77%) believe that a single system would be greatly beneficial�

But the perceived benefits extend beyond technological features—the majority of decision makers also believe that their organization could boost revenues (82%) or regain customer loyalty (73%) by using a fully comprehensive system� What is more, respondents indicate that web traffic, the fuel that drives the online commerce engine, would improve, with

over six in 10 marketing and IT respondents anticipating an increase in new website visitors (67%), total website visits (61%), and returning visits (61%)�

A digital marketing platform that integrates content management with commerce can help address the collaborative and integration challenges that prevent organizations from effectively managing an end-to-end customer experience, while also improving personalization and insight�

Decision makers who agree that a fully comprehensivedigital marketing system would signi�cantly improvetheir organization’s online sales e�ciency

Agree

Neither agreeor disagree

1% Disagree

93%

6%

Figure 8: Responses to the statement, “A fully comprehensive digital marketing system would significantly improve our organization’s online sales efficiency” asked of all marketing and IT decision makers (826 respondents)�

Decision makers who agree that using a single digitalmarketing system would be greatly benecial

Agree

Neither agreeor disagree

Disagree

77%

8%

15%

Figure 9: Responses to the statement, “It would be greatly beneficial to only require one digital marketing system rather than multiple tools” asked of all marketing and IT decision makers (826 respondents)�


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ConclusionSimply selling online is no longer enough to stand out from the competition in 2016—retailers have to excel at it� With further growth forecast, businesses now face the dual challenge of keeping up with the expanding online marketplace, and evolving their digital offering to provide customers with a personalized and effortless digital experience�

Are businesses making the right investments in the right places? And focusing attention on the right stages of the customer experience? Evidence would suggest not� The narrow focus that many organizations have adopted on the “during purchase” stage leaves many at risk of falling short in creating a more coherent, aligned, and complete customer journey, from pre-purchase through to post-purchase� Many

face challenges in engaging with customers, doing so in a contextual, personalized way, or getting the customer insights they need� Siloed mentalities, departments, and data don’t help� The overriding concern around security and cost is excess baggage that organizations must shed quickly to develop the contextual commerce experience that customers demand�

The benefits of using WCM systems are widely accepted by organizations that sell online, but are they getting as much out of them as they could? Many decision makers would like to change their current system while others are stuck having to use multiple apps and platforms at once�

As the online commerce market continues to evolve, the next wave of digital marketing systems should place customer experience at the forefront, providing the seamless journey and personalized service they deserve at every stage of the process�

Next stepsInterested in exploring more about how your customer—and your bottom line—can benefit when you market in context of customer interactions that occur before, during and after the commerce transaction? Take a look at our ebook, “The new power couple: Content and commerce take center stage�”

80%

84%

Respondents who agree with thefollowing statements

Our revenues would increase through the use of amore fully comprehensive digital marketing system


IT decision makers

66%

72%

We are missing out on opportunities by not having afully comprehensive digital marketing system


IT decision makers

71%

75%

Customer loyalty is lost through not having a focusedbrand experience for consumers


IT decision makers

Figure 10: Breakdown of marketing and IT respondents who agree with statements, asked of all decision maker respondents (826 respondents)�

http://www.sitecore.net/resources/ebooks/the-new-power-couple




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Research scope and methodology

The research on which this report is based was conducted in July and August 2016 and incorporates 1,240 interviews with marketing and IT decision makers as well as partners and suppliers across a range of countries, sectors, and organization sizes:

Countries and respondent type

Country Total interviews


IT decision makers

Partners and suppliers

US 200 66 67 67

Canada 50 17 17 16

UK 150 50 50 50

Germany 100 33 33 34

France 60 20 20 20

Netherlands 60 20 20 20

Sweden 60 20 20 20

Norway 60 20 20 20

Denmark 60 20 20 20

UAE 60 20 20 20

China 200 67 66 67

Singapore 60 20 20 20

Japan 60 20 20 20

Australia 60 20 20 20

Total 1,240 413 413 414


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■ Marketing decision makers (MDMs) from organizations that sell online, with an involvement in online sales strategy

■ IT decision makers (ITDMs) from organizations that sell online, with an involvement in the management of online sales channels

■ IT partner and supplier decision makers who work for organizations that supply digital marketing platforms to other businesses

Marketing and IT respondents came from organizations with more than 500 employees in the manufacturing/construction, retail, financial services, wholesale and distribution, transportation, hospitality and leisure, consumer packaged goods, and media/digital subscriptions sector� IT partners and suppliers came from IT organizations of any size�

Interviews were conducted via a mixture of online and telephone calls using a rigorous multi-level screening process to ensure that only suitable candidates were given the opportunity to participate� Unless otherwise indicated, the results discussed are based on the total sample�

About Sitecore and Vanson Bourne Sitecore is the global leader in experience management software that enables context marketing� The Sitecore® Experience Platform™ manages content, supplies contextual intelligence, and automates communications, at scale� It empowers marketers to deliver content in context of how customers have engaged with their brand, across every channel, in real time� More than 4,600 customers—including American Express, Carnival Cruise Lines, easyJet, and L’Oréal—trust Sitecore for context marketing to deliver the personalized interactions that delight audiences, build loyalty, and drive revenue� For more information, follow us at @sitecore or visit sitecore�net�

The research was conducted by Vanson Bourne:

Vanson Bourne is an independent specialist in market research for the technology sector� Its reputation for robust and credible research-based analysis is founded upon rigorous research principles and its ability to seek the opinions of senior decision makers across technical and business functions, in all business sectors and all major markets� For more information, visit www�vansonbourne�com�

http://sitecore.net

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online commerce: plotting a course to personalization

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