From e-commerce to digital commerce and digital transformation

May 9th, 2021
digital transformation propeller digitale transformatie
Table of contents

    The terms e-commerce and digital commerce are often used interchangeably. But there is in fact an important difference between these terms. And this can be important in the design of your platform.

    And then, people also keep talking about digital transformation. Do you need to take this into account as well, if you are faced with choosing whether to buy a new digital commerce platform? Or are these terms completely unconnected, and do they have no bearing on each other?

    In this article I explain the differences, but also show how it is possible, with the right choice of a digital platform, to achieve a number of goals.

    E-commerce versus digital commerce

    We use the term e-commerce if the commerce platform only has the task of serving the online channel. In other words, a webshop or a web portal. This is true in the case of both B2C and B2B organizations. This is an excellent solution if you only want to sell online.

    However, many organizations have a number of channels besides the webshop, which they use for digital marketing and wish to use to make sales. For instance, a retailer who, besides the online platform (webshop) markets via social media channels or has a physical shop. And in the B2B market, the inside sales division or account managers take orders telephonically or via email. In addition, products may be collected directly from your premises.  

    In that case, the thing that you want to avoid is that you end up with a variety of (data) silos containing customer orders and customer data. Certainly, if you want to give your customer digital insight into such matters as order history, outstanding invoices, backorders, etc. In the final analysis, this is a service that today’s customers expect from you. Besides this, of course, you too want to do smart things with the data that you have generated from your customers – consolidated over the various channels. 

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    Holistic overview

    These days, a pure e-commerce platform isn’t enough. You can no longer generate a holistic overview of your customer history. Not for yourself, but also not for your customers. Besides this, you can’t make intelligent use of your customer data for personalized and segmented marketing campaigns. As a result, you are missing out on cross- and upsell opportunities.

    So, if you are using a variety of sales channels and want to offer an optimal service to your customers, and also want to make intelligent use of your data, you need to set different requirements for your platform. Instead of an e-commerce platform, you need a digital commerce platform that has to bring together all the stated requirements. So, be critical in selecting a commerce platform. Even if you do not have all the stated needs at present, it is sometimes better to invest in a future-oriented digital commerce platform. After all, it is only a question of time before the market (i.e. your customers) expect this of you.

    Digital transformation

    And then, everyone is talking about digital transformation. What precisely is this, and how does it compare to digital commerce.

    According to Rik Maes, Professor Emeritus of information and communication management at the Faculty of Economics and Business administration of the University of Amsterdam, it is an umbrella term that has many definitions. Rik Maes himself uses the following definition:

    “… digital transformation relates to the fundamental change in customer interaction and customer experience, value propositions, and business models, operational processes and direction with/of information due to the impact of digitalization on organizations and society.”

    Upstream uses the following definition

    “…. digital transformation means that an organization has undergone an integrated business transformation, whereby the organization focuses 100% on the customer throughout the entire customer journey, is associated with a valuable network of employees, customers, partners, suppliers, stakeholders, and where digital technologies and data play a dominant role (‘digital first’).”

    If we compare these definitions to our explanation of digital commerce, then we can see that part of the definition is already covered by the possibilities offered by a digital commerce platform.

    Imagine that we – as already often happens – link the digital platform with a wholesaler/distributor and (indirectly) the manufacturers. Orders can now be passed on to the manufacturers without any administrative interventions, via the distributor/wholesaler. Invoicing and logistical processes can also be digitalized throughout the whole chain now. For instance, availability, optimization of inventory levels, etc. You make information that is important for yourself transparent for your customers as well.

    Besides the fact that this saves a lot of expense, a lot of data is generated, and this can then be used in an intelligent manner. Besides data for your marketing automation, you can also (for example) automatically select the distributor who has the best purchase conditions for your order.

    Focus on the customer

    But the other thing that clearly fits within the definition is that the customer is 100% at the heart of everything. What more could you do for your customer? The customer can already choose how to place an order (online or via the traditional method). Can easily make repeat purchases based on the order history, has an overview of outstanding invoices and backorders. In other words, a digital portal enables the customer to do much more than simply place orders.

    Why not expand the use of this portal? Because we now have the possibility – through the digital highway from customer to the manufacturer – of letting the end-customer communicate with the manufacturer, and vice versa. Information can be provided on how products work (handbook, video-instructions), how they are produced (sustainably or by applying socially responsible practices), how to prepare them (recipes), etc. From the other perspective, the customer can give feedback, enabling the manufacturer to further optimize his products. Besides this, producers can see where and with whom their products are selling well and/or where sales are stagnating.

    The platform could also form a basis to enable customers to communicate with each other. Or it could simply form a communication platform for all stakeholders.

    Summary

    In summary, it is important to think about your wishes and requirements for your future digital platform. Am I going to solely do online business, or do I have multiple sales channels which I want to land on one platform so that on the one hand I can build up intelligence from the accumulated data there, and on the other hand I can give my customers digital insight into their order history.

    Can I connect digitally in an intelligent way with my suppliers and producers, which I can benefit from but which will also enable communication between customer and manufacturer?

    The most important starting point should be to think about what the customer expects or maybe dictates. Now or in the future. So that my organization doesn’t become superfluous.

    So, make conscious choices when you build your digital platform or have one built. It has to be relevant today but mustn’t restrict you tomorrow in achieving your goals. 

    In order to achieve a strategically sound choice for the selection of the right digital platform, ask yourself these questions as a minimum:

    1. What sales channels do I use today, what will I use in the future, and how can I get these to land on one platform?
    2. What does focusing on the customer mean for my organization; do I even know what tomorrow’s customer will expect of me?
    3. Have I mapped out my front- and back-end processes sufficiently clearly to be able to fully digitalize them?

    We have also written an article about the new role of your sales team after a digital transformation.

    I would be delighted to talk with you about the possible impact of digital transformation on your organization. Send me an email and I will contact you: Jans Graver

    Jans foto
    Jans Co-Founder and CRO

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