In 2020, consumers spent $861.12 billion online with U.S. retailers—an incredible 44% increase from 2019.
Before the pandemic, this $861 billion in e-commerce sales wasn’t expected until 2022. Essentially, digital commerce’s growth trajectory skipped forward a year, even with millions filing for unemployment.
At the same time, retailers moved en masse toward technology that enabled them to deliver radically new product experiences. That move, along with new customer expectations and growing revenue potential, has shaped – and will continue to shape – product experiences.
But how exactly? And what can you do to capture that growth?
To answer that question, let’s dive deep into five digital commerce trends and their evolving effect on product experience management (PXM).
1. Strong Consumer Preference for Touchless Interactions
Government regulations and consumer demand for improved hygiene have turned touchless interactions into a linchpin of the product experience. Effective product experience management (PXM) can’t ignore this growing need for touchless interactions.
Ulta, a beauty retailer, provides a case in point. At the outset of the pandemic, Ulta overhauled the experience of searching for, purchasing, acquiring, and consuming the products they sell. A key part of this effort was enabling touchless interactions throughout the product experience by:
- Expanding buy online pickup in-store (BOPIS) and buy online for curbside pickup (BOPAC).
- Creating a new notification process to enable a seamless digital experience.
- Adding virtual try-on capabilities through their GLAMlab beauty tool.
In the end, Ulta achieved a record high e-commerce growth of 200% in 2020. Twenty percent of that growth came from BOPIS and BOPAC. Also, product views in the GLAMlab, where consumers try on thousands of beauty products virtually before they shop increased more than 150% from the first to the second quarter.
As Ulta’s case shows, buyers are clamoring for touchless experiences. As you shape your product experience, think about where your organization’s cross-channel processes require touchless experiences. In Ulta’s case, it was BOPIS and virtual product try-on experience.
During this digital redesign, you can also revisit the process itself to ensure it seamlessly integrates your sales channels.
2. AI and AR Streamlining the Back Office
Inventory is generally a retailer’s largest expense. As such, reducing inventory costs can free up a significant amount of cash for reinvestment. To accomplish this, Gartner’s 2021 CIO Survey shows 35% of retailers are expecting to spend more on artificial intelligence.
Customers might not see back-office functions such as retail space planning, but they’re also essential to PXM. And technology like artificial intelligence is making these functions increasingly efficient and effective.
Pets at Home, a British pet supply retailer with more than 400 stores, provides an example. Pets at Home faced two distinct complications. First, their smallest store is six times smaller than their largest. Second, the stores provide both in-store pet services and a broad assortment of products.
Displaying the most relevant SKUs and providing the requisite space for pet services was a challenge. To meet this challenge, Pets at Home used AI-powered technology that provided two key benefits:
- AI-powered merchandising optimization to determine SKUs to stock and display.
- AR-powered intelligent virtual store design (IVSD) to optimize space planning.
Another retailer called Knix, which sells intimate apparel, also used AR to great success. When COVID-19 hit, they launched a virtual fitting room. In one of its virtual warehouse sales, Knix had 35,000 people shopping simultaneously within 10 minutes of going live.
As Knix’s founder and CEO, Joanna Griffiths, explains, “The world’s next legacy brands are being built in real-time.”
Of course, building brands in real-time requires robust integration of the back office and the product experience.
3. Shifting to Transparent and Value-Driven Consumption
In 2019, Gartner asked U.S. and U.K. consumers for their top five basic expectations of a good shopping experience. 27% of Americans and 29% of Britons included being authentic by being honest and genuine in their top five.
Moreover, in an Accenture survey, 63% of consumers said they refuse to buy from companies they don’t trust.
In short, consumers are prioritizing transparent corporate governance, fair work conditions, health, and sustainable, ethical business practices.
Meanwhile, retailers are already acting to ensure these values are reflected in their product content via PXM solutions. Home Depot, for example, promotes awareness of its sustainability initiatives with a corporate sustainability page.
Similarly, the French retailer Carrefour tracks its products from farm to store to provide customers information about harvesting and packaging. This enables Carrefour’s customers to decide which items to purchase or avoid, depending on sustainability factors.
4. Rising Need for Trusted and Rich Product Content
In-store or online, retailers must ensure their shoppers have the information they need. Without physical interactions with the product, though, retailers have to get creative. This is where product information management (PIM) meets PXM.
Think back to Ulta’s GLAMlab or Knix’s virtual fitting rooms. The power of these digital experiences is that they provide the information customers need to make purchasing decisions.
Of course, Ulta’s and Knix’s product experience spans many more channels. Retailers have to feed information via text, websites, marketplaces, mobile apps, and more. Managing this information—ensuring it is current, consistent, optimized, and automated—is key to a seamless product experience.
PXM systems like Riversand’s Product Experience 360 (PX 360) solves this product information management challenge. Among other benefits, PX 360 improves the PIM experience by:
- Streamlining product content updates by delivering relevant product data across all touchpoints.
- Empowering management of new content channels and markets.
- Increasing productivity by housing supplier data, managing content governance and automating conversion optimization.
By simplifying product data management, you can build new digital experiences that capitalize on other e-commerce trends. For example, think back to Carrefour. PIM systems allowed them to track their products from farms to stores and deliver that information to their customers.
In this way, PIM software enables you to manage the content that lives in each stage of your product experience.
5. Personalization (at Scale) is More Important than Ever
Half of the global e-commerce sales occur on marketplaces. Pioneered by Amazon and adopted by Target, Walmart, and Google, these marketplaces help smaller retailers scale up. But they also cut into margins and take control of the customer relationship from individual brands.
This creates a need for brands to differentiate themselves with personalization. The challenge with personalization, of course, is scale. How do you provide personalized recommendations to different types of customers in various channels at different times?
The answer is PXM that leverages PIM to unify product and customer data to drive contextual commerce. By reducing the resources required to manage product data and combining insights, PXM solutions help you turn product data into better customer experiences and also help navigate the social distancing challenges of 2021 and beyond.
Global and iconic retail brands turn to Riversand, a visionary master data management leader, to power their data flows to keep the engines of their commerce running. Serving a global customer base, learn the amazing things people are doing using our PX 360 solution – both online and through their hundreds of stores.