The 7 dictums of a Unified Commerce strategy

Srjana Balraj, Global Head, TCS OmniStore, Tata Consultancy Services UK, outlines seven key technical rules that retailers need to understand when developing a successful unified digital ecommerce strategy.

Introduction

Unified Commerce continues to be a holy grail for most retailers. The pandemic propelled retailers to innovate, with several innovations like kerbside pickup, scan & pay, and appointment-based shopping introduced in record time. However, many were beyond capacity, with prolonged waiting times for entering online sites and obtaining delivery slots. Today, newer channels, subscriptions and rentals, and emerging payment types are helping retailers to become increasingly agile in the face of adversity.

Enabling omnichannel retail by default

The biggest challenge retailers face in providing a seamless omnichannel experience is the existence of disparate checkout systems for offline and online channels. It calls for complex point-to-point integrations between all systems, making the application landscape complex and expensive to maintain. Most checkout platforms are built on common domains such as product, cart, payment and pricing, resulting in 70-80% duplication of features or capabilities. Retailers must find a way to de-duplicate these elements and enable omnichannel by default (see Figure 1).

The top seven dictums that retailers must adopt to get their commerce strategy right:

1. Bind associated data with APIs to create a single source of truth

The reference data used by commerce applications is scattered across retail enterprise systems—master data management, product information management, content management, and multiple third-party data sources. Today, creating a single source of truth does not necessarily mean merging all the data sources into one large database.

Data APIs are enabling the convergence of data by unifying traditional reference data with AI-enriched data to provide contextual, relevant, and personalised information for various scenarios. Apart from storing core and rich product attributes, product APIs can also combine them with external data, such as product reviews, ratings, seller ratings, and even sustainability scores to fetch the right product for the right user.

2. De-duplicate commerce platforms to design unified commerce capability

The lack of industry-approved common standards for data models makes it challenging to augment older monolithic applications with channel context and attributes. By breaking them into domain-driven capabilities, enterprises can shift to a microservices and API-based architecture, allowing greater interoperability with other enterprise APIs (see Figure 2). These APIs can also be individually upgraded to cater to future business needs.

For instance, the ‘Apply Pricing API’ may be designed to cater to B2C but it can be adapted to additional aspects of B2B pricing or marketplace. This enables an incremental approach to transformation, rather than replacing legacy applications in their entirety. A key aspect is to cater to offline channels as well as newer business models.

3. Adopt composable commerce for rapid and modularised innovation

Gartner[1] advises application leaders to prepare for a composable approach using packaged business capabilities to future-proof their digital experience. Composable commerce offers the flexibility to buy only what enterprises need and build what they can on their own, with the added flexibility of interchanging their approach as they move along the journey.

Composable commerce frees businesses from the dreaded vendor lock-in scenario, enabling them to replace the capabilities of one vendor with another, without impacting other components in their enterprise.

4. Create a continuum of mission-based journeys

The ability to cater to evolving touchpoints quickly is a key competitive differentiator. It is imperative that the underlying commerce and fulfilment capabilities are designed as open, granular, flexible, and scalable capability APIs that can be assembled to create a mix of customer journeys. New capabilities can also be introduced incrementally to the API library for new business models (see Figure 3).

5. Introduce intelligence at every stage of the commerce journey for unique experiences

Despite the huge volumes of data now available, retailers are still far from providing the best shopping experience to their customers, be it online or in stores. Intelligent algorithms are adept at connecting the dots when used appropriately and retailers should not shy away from introducing AI/ML technologies across their landscape.

Another foundational element for this is to unify data at the transactional level. Unified transactions will contain all the elements of a customer’s interaction, including items that are part of the purchase or return; fulfilment method and associated details; customer details, tax information, payments, channel and location information; as well as the proof of purchase details. This becomes an invaluable asset, not just from the perspective of managing internal financials and easing business operations, but by allowing retailers to run powerful algorithms that can provide valuable insights on shopper behaviour.

6. Define new metrics aligned with unified strategies

As online and offline channels sync and customer journeys become non-linear, many questions arise to understand the impact of one channel on the other. For example:

• How to measure the impact of online offers in store sales and vice versa?
• How to measure the additional sales in store through Buy Online, Pickup in Store (BOPIS)/ click and collect journey?
• How to measure online browsing leading to in-store conversion?
  

Although there are new omnichannel KPIs, the metrics are not fine-tuned to the future of shopping and offer little help in crafting future strategies for customer engagement. There are many more scenarios that require retailers to understand the impact of one channel on the other:  

• Abandoned or idle carts online converted through an in-store purchase
• Online recommendations resulting in in-store purchase
• Conversion on categories in-store based on dwell time online
• Online sales generated from in-store owing to out of stock or price disparity
• Online sales from associate clienteling

7. Build new operating models to forge new business models

With the goals of each channel being different, defining channel strategies in silos presents a huge risk. Omnichannel teams interweaving business and IT goals are crucial for a successful transformation to unified commerce. Many tier-one retailers are reorganising their teams to achieve a unified vision and new roles are constantly emerging (such as API Manager). This is a key role to ensure that all APIs adhere to standards and security protocols.

Several new business models are emerging that appeal to both customers and organisations, such as service subscription models and cryptocurrency, which is another technology expected to see worldwide adoption. This completely decentralised, cross-border medium of exchange is likely to replace traditional tokens and settlement, and will enable commerce to be more versatile by driving innovative and disruptive business strategies.

READ MORE:

• Monoliths vs microservices: why e-commerce brands have a decision to make
• Is your e-commerce business’ growth attracting fraud?
• RedCloud launches B2B open commerce platform in Mexico
• Why you should be thinking about scalable commerce now

Conclusion

Digital transformation is often misunderstood as completely removing older systems and replacing them with modern platforms, involving multi-year commitments manned by massive teams. While this was true decades ago, new technologies like microservices, API, cloud, AI/ML, IoT, edge computing, and blockchain have made it possible for enterprises to realise their vision on a continuous, incremental basis, while calibrating to the advancements in their transaction journey.

The future will be driven by a circular economy and the collective goal will be about becoming purpose-led and sustainable. Unified Commerce is no exception, as retailers will increasingly embrace the latest digital solutions that deliver a satisfying customer experience across both physical and digital touchpoints to secure long-term business growth.

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[1] Gartner Research, “Future of Applications: Delivering the Composable Enterprise”, accessed May 2021, https://www.gartner.com/en/doc/465932-future-of-applications-delivering-the-composable-enterprise

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