While 2023 was undoubtedly a tough year for many retailers, there are signs that consumer spending will pick up again in 2024, with EY data predicting that consumer purchasing power will rise. To nurture these green shoots, retailers of all sizes need to proactively rethink how they optimize their business and keep consumers coming back.
But too many large retailers face challenges with their current technology stacks, either due to limitations from platforms that no longer meet their needs, or bespoke, cumbersome internal efforts that inhibit innovation. As this increases, sales are starting to be affected. And fast-growing competitors will take advantage of it. Therefore, enterprise retailers must consider how to deploy strategies that allow them to build faster, more cost-effective technology stacks that optimize customer experience and enable growth.
Now is the time. In a recent survey of 1,000 companies conducted by IDC on behalf of Shopify, more than two-thirds (67%) of respondents said they are considering changing their commerce platform in at least the next three years. and 94% say timely implementation is important. . This shows that corporate retailers are willing to change their models to deliver what they want.
Find the sweet spot for your new commerce model
Today's retail industry is all about omnichannel. You need to meet consumers wherever they are: in-store, on mobile apps, and even on live video on social media. But as businesses embrace omnichannel, the commerce architecture they need must deliver greater speed, efficiency, and cost effectiveness.
Moving from a legacy architecture to a modern, more configurable commerce platform lowers your total cost of ownership and helps you improve customer experience, increase revenue, and expand your market reach. However, IDC research shows that 75% of companies are concerned about time to market and 66% are concerned about cost-effectiveness when migrating from legacy architectures.
Shopify EMEA Head of Enterprise
When looking to change their e-commerce platform, companies are considering different models, from full-stack to fully composable, depending on their requirements. A common trend across these approaches is that the enterprise software that enterprise decision makers choose must be simple and fast, as enterprise decision makers have a low tolerance for cumbersome implementations. Companies should not be stuck using rigid off-the-shelf solutions or cumbersome custom builds when they no longer suit business requirements.
Thankfully, there is now a solution. It's a blended model that creates a sweet spot for most companies, where they can choose only the components that meet their business needs. Instead of choosing one approach, you can also get an adrenaline rush. By combining off-the-shelf components built specifically for e-commerce and injecting them into our homegrown technology stack, we drive growth through higher conversions and a better customer experience.
Blended models allow companies to build for the present and plan for the future. Flexibility is at its core, allowing retailers to easily adapt by replacing the components they need as their business grows, without relying solely on in-house expertise or associated costs. Additionally, in the IDC study, he found that 91% of companies say total cost of ownership is important when changing to a headless, full platform, or modular model, and are choosing to take this mixed approach now. There is no better time than this.
Companies can learn from hyper-growth businesses to face scaling challenges
As they look for ways to drive growth, established enterprise retailers can learn from hyper-growth companies that iterate on their e-commerce platforms more regularly to deliver results faster.
This strategy has benefits and can help large organizations stay ahead of new potential competitors. This is particularly important for his 31% of respondents who cited lack of technology scalability as the second most common internal challenge they face, after a lack of digital skills (38%). It is considered.
Even enterprise retailers are not large enough to face the challenges of scaling. This is especially true at checkout, as cart abandonment prevention is critical to driving business growth. A recent study in which Shopify partnered with BCG across more than 1 billion data points across more than 220,000 e-commerce sites found speed improvements at every stage of the checkout experience. Although correlated with higher conversion rates, building and maintaining a fast and seamless checkout experience is very labor-intensive for brands of all sizes.
All accelerated payment platforms already do this, and the same research shows that offering accelerated payment methods increases lower-funnel conversion rates. Do you really have the resources to hire a team of hundreds of engineers to maintain and improve it? 50%? Custom made cannot be beat here. Especially when it's easier than ever to integrate accelerated payment gateways into any technology stack, so why compete with the best-in-class?
For corporate retailers, it's all about options. This should include unified, proven technology that is proven to convert, starting and ending with a frictionless checkout experience.
Enterprise retailers are powered by the technology and strategies they have built into themselves, which can often be the difference between success and failure. However, just because you build it once doesn't mean the technology stack will work seamlessly forever. It should be regularly analyzed and optimized to ensure it is fit for purpose and future proof to meet consumer needs.
Bespoke is no longer about platforms. Especially if it's a platform that integrates with its own platform.
While there may be benefits to building an all-in-one solution or a completely modular solution, the most effective option is one that gets the best of both worlds so your business can continue to iterate and innovate. and help you gain a competitive advantage.
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