While 2023 was undoubtedly tough for many retailers, there are signs that consumer spending is set to increase once again in 2024, with EY data projecting a lift in consumer buying power. In order to nurture these green shoots, retailers of all sizes need to be proactively rethinking how they can optimise their businesses and encourage consumers back.
Far too many large retailers however are facing challenges with their current tech stacks, either restricted by platforms that no longer meet their needs, or custom-built, cumbersome internal efforts that are hampering innovation, and it is starting to impact their sales as more agile and fast-growing competitors take advantage. Enterprise retailers therefore need to explore how they can deploy strategies that will enable them to create faster, more cost-effective tech stacks that optimise the customer experience and deliver growth.
Now is the time to. In a recent survey conducted by IDC on Shopify’s behalf of 1,000 enterprise businesses, over two-thirds (67%) of respondents said they are at least considering changing their commerce platform in the next three years, while 94% say a timely implementation is important. This demonstrates that there is appetite for change to a model that offers enterprise retailers what they’re looking for.
Finding a sweet spot in the new commerce model
Omnichannel is everything in retail today. You need to meet consumers wherever they are, whether that’s in a store, on a mobile app or even in a live video on social media. But as companies embrace omnichannel, the commerce architecture they require must deliver greater speed, efficiency, and cost-effectiveness.
Migrating from legacy architectures to more composable modern commerce platforms reduces the total cost of ownership and helps to improve customer experience, increase revenue, and expand market reach. But when moving away from legacy architecture, 75% of businesses are concerned about time to market and 66% about cost-effectiveness, according to the IDC survey.
When looking to change their ecommerce platform, companies are exploring different models, from full stack to fully composable, depending on their requirements. As enterprise decision-makers have a low tolerance for cumbersome implementations, the common trend across these approaches is that the enterprise software they choose should be simple and fast. Companies should not be stuck using rigid off the shelf solutions or cumbersome bespoke builds if these no longer fit the requirements of the business.
Thankfully there’s now a solution: a blended model that creates a sweet spot for most businesses where they can choose only the components they want to meet their business’ needs. Instead of choosing one approach, they can take an adrenaline shot; combining an off-the-shelf component purpose-built for ecommerce, and injecting it into an otherwise homegrown tech stack to supercharge growth through higher conversion and better customer experience.
The blended model enables businesses to build for today and plan for the future. With flexibility at its heart, it can be easily adapted by swapping out the components retailers need as the business grows - all without solely relying on in-house expertise and the associated costs. And with 91% of enterprises in IDC’s research saying that total cost of ownership is important when changing to headless, full platform or modular models, there’s never been a better time to take this blended approach.
Enterprise can still learn from hyper-growth businesses to face scaling challenges
In searching for ways to drive growth, established enterprise retailers could take learnings from hyper-growth businesses which are iterating on their ecommerce platforms on a more regular basis to deliver results, fast.
This strategy has its merits, and could help larger organizations to stay ahead of any new potential competitors. This is likely particularly important to the 31% of respondents in our research who cited a lack of technology scalability as the second most common internal challenge they face, behind only a lack of digital skills (38%).
Even enterprise retailers aren’t too big to face scaling challenges. This is particularly true at the checkout, as preventing cart abandonment is crucial in driving business growth – a recent study of over 1 billion data points across 220,000+ ecommerce sites by Shopify in partnership with BCG found that improved speed at every stage of the checkout experience correlates with a higher conversion rate – but building and maintaining a fast and seamless checkout experience is highly labor intensive, no matter how big your brand.
Do you really have the resource to hire a team of hundreds of engineers to maintain and improve on your checkout experience, when accelerated payment platforms all do this already, and the same study found that offering an accelerated payment method increases lower funnel conversion rates by upward of 50%? Custom-made won’t win here: why compete with the best in class, especially when it’s easier than ever to integrate accelerated payment gateways into any tech stack?
For enterprise retailers, it’s all about options, which should include uniform, tried-and-true technology that is proven to convert, and that starts, but doesn’t end, with a smooth checkout experience.
Enterprise retailers are powered by the technology and strategies they incorporate, and often that can be the difference between success and failure. However, just because you have built it once, doesn’t mean your tech stack will seamlessly work forever. It needs to be regularly analyzed and optimized to ensure it is fit for purpose and future-proofed to meet consumers’ needs.
Bespoke no longer beats out platform; especially if it’s a platform that integrates with your own.
While there may be benefits to building an all-in-one solution or one that’s completely modular, the most effective option takes the best of both to ensure the business can continue iterating and innovation, helping it to secure the competitive advantage.
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