Apple, Amazon, Google. These are household names and companies that derive significant direct and indirect revenue and profits from their thriving online presence. The world’s most profitable companies all share a common strand of DNA: they have chosen a Web-first strategy, and are dominating the e-commerce arena. When people are able to do commerce 24/7/365, and as easily online as they would do business across the street, the world becomes a much smaller place. That is exactly what these e-commerce giants have enabled. However, providing access to the right digital content at the right time, with a user experience that delights customers as they purchase products and services by the trillions is no easy task. Clearly, these giants have figured it out, but what is preventing other companies from taking their lead, and building e-commerce sites that streamline the business life cycle?
According to MasterCard’s Merchant Scope, 90% of all small and mid-sized businesses can be found online. Clearly, businesses have come to realize the importance of being able to be discovered online. Some companies are even attempting to follow in the footsteps of the Goliaths, and have built successful digital storefronts. However, many businesses are failing spectacularly when it comes to e-commerce. In fact, only 20% are actually profiting off of the Internet, and still depend primarily on traditional analog commerce channels for profits. What’s worse, according to the study, is that only 25% of companies even recognize they have a problem, and are trying to do something about it
The digital era is well underway, and as a result, more and more of us are increasingly communicating, interacting, and transacting online. As such, the e-commerce segment of business continues to grow in size and importance literally every day. Despite this undeniable trend, many companies have still not put focus on moving their online presence up the maturity curve. As the chart below outlines, the majority of companies remain far behind what would be considered best in class:
Source: Maturity levels of E-Commerce, T-Systems Multimedia Solutions 2010
Furthermore, MasterCard found that these technology stragglers and average companies tend to rely more on traditional advertising and word of mouth, rather than the social media and location-based offerings available that target an audience specifically for their products.
Companies around in the pre-Internet era are struggling to shift from the 20th Century analog storefront to the digital storefront of today. In many cases, these businesses don’t know where to start. They are frozen due to lack of knowledge and fear of change – and of course, a lack of adoption of automated processes like order administration, online checkout, and electronic payments. Surprisingly, MasterCard’s survey found that nearly one-third of all businesses have no idea where to turn when it comes to automating these processes. Even more surprising, even in the fastest-growing e-commerce region of Europe, Germany, only 42% of German merchants believe that technology is or will be a vital tool to the day-to-day operations of their business. Companies are losing revenue and profits, are blindsided by ignorance, and are fearful to invest in staying current.
The future of commerce is online. E-commerce has clearly survived the hype-cycle and is rapidly becoming the preferred method of purchasing – growing at approximately 35% year over year. With these trends, it is no longer enough for a company to just be online anymore with an electronic brochure. They will need to adopt a Web-first digital strategy in their back-offices and in their online storefronts that focuses on delighting customers with an engaging communication, interaction, and transaction experience as a means of survival. In contrast to Germany, 92% of Brazilian companies have declared e-commerce technology as critical to be connected and competitive in the global market. The connected economy of today has leveled the playing field, and new winners will emerge in the global economy.
The Internet has forever changed the way we communicate, interact, and transact, and has made doing business around the globe as easy as it is to do across the street. Shockingly, many businesses still choose to operate manually, and are unable to participate in the new era of our connected economy. Thankfully, some companies chose to be first-movers, embraced the Internet, e-commerce, and cloud-based technologies, and have put them to work to become the household names we’ve come to love. There’s obviously money to be made online: Amazon deals exclusively in web-based transactions is today worth $90 billion. E-commerce can be extremely lucrative, and it’s time for B2B companies to embrace a digital strategy for commerce in order to level the playing field and get their slice of the $7 trillion B2B e-commerce pie.